Pakistan cites US military co-operation to convince IMF of relaxing reform conditions: FT report

Finance Minister Shaukat Tarin has said that Pakistan will leverage military co-operation with the US over America’s withdrawal from Afghanistan in a bid to convince the International Monetary Fund (IMF) for extending the deadline to implement reforms as the country anticipates the next tranche of funding as part of a $6 billion loan programme, according to a report by the Financial Times. 

According to the report, officials are seeking US support in the form of financial backing from the Washington-based international financial institution in exchange for helping President Joe Biden withdraw all US troops by September 11 and bringing the Taliban to the negotiating table.

It may be mentioned here that the international financial institution has shown leniency over holding off raising power tariffs and sales taxes that have hit Pakistan’s poor, who are suffering double-digit inflation, during the ongoing Covid-19 pandemic.

“What we do not need is more burden on our poor people,” said Tarin. “We have been talking to the American officials and they’re willing to help.”

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The report also quoted business columnist, Khurram Husain, saying: “Pakistan will have to leverage some kind of geopolitical muscle to get the IMF to back down. They’ve done it before.”

Furthermore, the report mentions Fitch Ratings’ statement earlier in May, which held its outlook on Pakistan stable at B-, citing the country’s progress in addressing its financial challenges but the fallout from the pandemic and political turmoil risks derailing the reform agenda.

It is pertinent to mention here that intelligence, military and diplomatic leadership of the United States and Pakistan are holding talks over the possible establishment of an American base for counterterror purposes after the withdrawal of forces from Afghanistan.

Media reports state that Jake Sullivan, the US national security adviser, did not mention bases, but confirmed that talks are underway on “the future of America’s capabilities” for the above stated reason.

 

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