COAS appeals US to help expedite Pakistan-IMF deal

COAS appeals US to help expedite Pakistan-IMF deal

RAWALPINDI (Dunya News) - Chief of Army Staff General Qamar Javed Bajwa has appealed to the United States to help Islamabad secure an early dispersal of $1.2 billion in funds under an International Monetary Fund loan programme.

According to a foreign media outlet report, General Qamar Javed Bajwa telephoned US Deputy Secretary of State Wendy Sherman and appealed to her to expedite the $1.2bn dispersal by the IMF.

It is pertinent to mention that Pakistan and the IMF reached a staff-level agreement over the release of the funds to support the country’s fragile economy. The staff-level agreement will pave way for a $1.2 billion disbursement, which is expected in August.

The IMF already granted Pakistan “staff-level approval” for the loan in question on July 13. But the transaction — part of the IMF’s $6 billion Extended Fund Facility for Pakistan — will only be processed after the multilateral lender’s executive board grants final approval. The IMF is going into recess for the next three weeks and its board will not convene until late August. No firm date has been set for announcing the loan approval for Pakistan, according to an IMF official who also spoke on condition of anonymity. For Islamabad, time is of the essence as the rupee has been plummeting against the dollar, and the country has less than $9 billion in foreign reserves left, covering under two months of import bills. According to the IMF official, there is a major difference between staff-level approval and board approval. “Our stakeholders, the countries that take the vote as to whether they are supporting this or not, make the final decision,” said the official. “This is a difference. So the legally binding step is a board approval, not the staff level agreement.” The U.S. is the largest shareholder in the fund, founded in 1945. The army chief’s appeal comes in the wake of separate meetings between senior civilian Pakistani and American officials in July, none of which managed to negotiate an early disbursement of funds. “Several senior Pakistani officials have met with U.S. and other key stakeholder nations in the IMF and World Bank in the past week to register concerns about the timing of IMF Executive Board decisions, pressing to expedite review of Pakistan’s progress on prior actions,” said an official familiar with the proceedings. According to sources, the lack of progress in those meetings spurred the army chief to get Washington’s attention when other emissaries could not deliver. Since 1958, Pakistan has embarked on 22 separate IMF programs but completed just one. However, while officials familiar with the exchange admitted that the currency and foreign reserves situations were worrisome, they also reported progress on the IMF finance facility. “If the government can get through this tough month, there are good opportunities to stabilize the economy, but August will not be easy,” the sources said. Meanwhile, State Bank Acting Governor Murtaza Syes, in a media interaction said that the fear of Pakistan’s default is overblown. He said the financing needs for the next 12 months will be met. He has admitted that Pakistan would rather get the IMF funding sooner rather than later, but also detailed that Islamabad is negotiating with Saudi Arabia and China — two countries that the army chief visited recently — to score supplemental financing.