After Pakistan clinched the staff-level agreement (SLA) with the International Monetary Fund (IMF) on a stand-by arrangement (SBY), Prime Minister Shehbaz Sharif termed his meeting with Managing Director Kristalina Georgieva in Paris as the “turning point” for Pakistan.
PM Shehbaz shared the hurdles of securing the long awaited IMF deal with the nation in a press conference after he oversaw the signing of the SLA in Lahore. The PM spoke to the media wile being flanked by Finance Minister Ishaq Dar, Information Minister Marriyum Aurangzeb and Punjab Governor Baligh Ur Rehman.
PM Shehbaz said that he held two meetings with the IMF chief on the sidelines of the Summit for a New Global Financial Pact in Paris. He added that the IMF chief told him that the lender does not want Pakistan to default.
“The IMF MD said we will move forward you also move ahead,” said the PM. He added that Pakistan will receive the first tranche of the SBA after the July meeting of the IMF Executive Board.
The premier also shared that the Sri Lankan president went to the IMF MD and helped him during the Paris summit.
“The Sri Lankan president told IMF MD to save Pakistan [and then] these people say that Pakistan is turning into Sri Lanka,” said the PM.
The premier said that everyone in the coalition government lost their political capital to ensure that Pakistan does not default. He also lauded his finance minister for his hard work and shared that Foreign Minister Bilawal Bhutto-Zardari also asked the IMF chief to help Pakistan.
"No one man can settle things, it was team effort," said the PM.
The PM also urged the nation to pray that the SBY is the last IMF programme that the country is taking.
“Countries do not succeed by taking loans, we are forced to take loans,” said The PM. He added that the common man has been sacrificing since the last 75 years.
The premier also thanked Chief of Army Staff (COAS) Asim Munir for helping secure loans from Saudi Arabia and United Arab Emirates (UAE). He also stated that he was out of words to thank China as it helped country avert default in the last three months.
Lamenting the country’s dire situation, the PM said that when he meets leader of Pakistan’s friendly countries they know that the he would ask for loans. He explained that to get out of this loan taking cycle the country will have to work day and night.
The PM also shared that there will be austerity in the coming months but assured the people that it will be on the elite. He also vowed to bring investments from the Gulf in agriculture, minerals, IT and small enterprises.
Speaking to the media after the PM, Finance Minister Ishaq Dar shared that in the last 10 days they worked on convincing the IMF, adding that Pakistan wanted the SBY to be of nine-months.
“The IMF agreement has been signed and PM took a lot of interest in it,” said Dar. He added that it was his belief that Pakistan is not a country that defaults.
“Even if IMF was not there then we had a second plan. We have to recover from the destruction that took place crying will not help,” said Finance Minister Dar.
The finance czar urged that Pakistan must live within its means.
"We spent more than our resources in the last five years. Like democracy, fiscal discipline is also necessary," said Dar.
Earlier today, Pakistan and the IMF reached a long-awaited SLA on $3 billion SBA, the global lender announced.
“I am pleased to announce that the IMF team has reached a staff-level agreement with the Pakistani authorities on a nine-month Stand-by Arrangement (SBA) in the amount of SDR2,250 million (about $3 billion or 111 percent of Pakistan’s IMF quota),” Nathan Porter, the IMF’s Mission Chief to Pakistan, said in a statement.
“The new SBA builds on the authorities’ efforts under Pakistan’s 2019 EFF-supported programme which expires end-June. This agreement is subject to approval by the IMF’s Executive Board, which is expected to consider this request by mid-July,” the statement added.
The $3 billion funding, spread over nine months, is higher than expected for Pakistan. The country was awaiting the release of the remaining $2.5 billion from a $6.5 billion bailout package agreed in 2019, which expires on Friday (today).
With sky-high inflation and foreign exchange reserves barely enough to cover one month of controlled imports, Pakistan has been facing its worst economic crisis in decades, which analysts say could have spiralled into a debt default in the absence of the IMF deal.
The deal comes after an eight-month delay and offers some respite to Pakistan, which is battling an acute balance of payments crisis and falling foreign exchange reserves.
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