ISLAMABAD: Patience is a virtue lesser known to Pakistanis, be it in ques at the bank or a traffic signal. However the IMF has taken it upon itself, to give Pakistanis a crash course in patience. The staff level agreement (SLA) of the IMF, has been further delayed as Islamabad was unable to satisfy the Fund with regard to maintaining $ 10 billion foreign exchange reserves or equivalent to two months of imports.
The agenda of IMF Executive Board meetings was uploaded on the Fund website on Monday but the Pakistan’s Staff Level Agreement (SLA) was not included in its Executive Board meetings up until May 17 2023 .
Sources privy to the developments on the deal, said that the government economic team has failed in securing assurances on external financing from friendly nations.
The IMF wanted the government to improve its import cover to at least 2 months (equivalent to $6 billion), after the repayment of $3.7 billion worth of debt, maturing in May-June 2023.
Sources also said that Pakistan presented a new plan for the financing of $1 billion in additional aid, which the lender deemed insufficient due to which the IMF in its schedule of executive board meetings has not included the Pakistan case in any agenda until May 17, 2023.
Sources also said that the budget-making process will be affected if transactions with the IMF are not concluded.
On the other hand, the Ministry of Finance said Pakistan has completed almost all of the prior actions for completion of the 9th review. They said the present government imposed Rs 170 billion in additional taxes to complete the lender’s program and receive over $1.1 billion in the bailout.
It is noteworthy that the highly-awaited SLA was scheduled for February 9 but has faced many delays since then. The fund has been adamant on imposing strict prior conditions on Pakistan, which Pakistan seems to have failed to comply with.
It is also to be kept in mind that a number of foreign aid assurances that Pakistan has are also contingent upon the IMF staff level agreement. Therefore further delays in the staff level agreement not only mean economic uncertainty but also open up the window of the possibility of defaulting on its debt obligations for Pakistan.
So the lies about KSA giving us $2b and the UAE giving us $1b were just that, lies.