IMF says it received PTI letter, looks forward to engaging with new govt

ISLAMABAD: The International Monetary Fund (IMF) Friday made it clear in response to a letter written by incarcerated PTI founder Imran Khan that domestic political developments were not its cup of tea, and its mandate was limited to only economic issues of Pakistan.

“The IMF received a letter from a PTI spokesperson on February 28 regarding the Fund’s engagement with Pakistan under the programme,” an IMF spokesperson said in a statement on Friday in response to the PTI demand for undertaking probe into alleged rigging in the general election, held on February 8 in Pakistan.

“The IMF, as an international institution with a narrow mandate on economic issues, does not comment on domestic political developments,” the spokesperson made it clear in the statement. “However, given the importance of the institutional environment for economic stability and growth, we do encourage fair and peaceful resolution of all electoral disputes,” it further stated.

“In terms of its engagement with Pakistan, the IMF said “our aim is to support the implementation of strong policies to deepen financial stability, address longstanding economic and underlying balance of payments challenges, and restore sustained and inclusive growth for the benefit of all Pakistani citizens.”

To further explain its viewpoint, the IMF spokesperson said that included stronger public finances, through high quality revenue measures to broaden the tax base, while scaling up the support for the most vulnerable, restoring energy sector viability, improving institutional governance and anti-corruption effectiveness, SOE reform, building climate resilience, and creating a level playing field for private businesses to promote investment and job creation.

While rejecting the PTI demand to probe alleged rigging, the IMF stated that they were looking forward to engaging with the new government to complete the second review and could formulate new medium-term bailout package if the government made a request for it.

“On the basis of set objectives, we look forward to engaging with the new government to complete the second review under the current Stand-by Arrangement and, should the government request, support the formulation of a new medium-term economic program” added the statement.

After receiving crystal clear response from the IMF, Pakistani authorities are now exploring options to augment the upcoming bailout package request with climate finance. One of the options could be explored through the IMF’s Resilience and Sustainability Trust (RST), which helps low-income and vulnerable middle-income countries build resilience to external shocks and ensure sustainable growth, contributing to their longer-term balance of payments stability.

“It complements the IMF’s existing lending toolkit by providing longer-term, affordable financing to address longer-term challenges, including climate change and pandemic preparedness,” one top official said while quoting the RST facility, which is being explored by Pakistani authorities before arrival of the IMF review mission here in Islamabad next Friday.

The IMF team is expected to reach Pakistan next week and then both sides might explore all possibilities for augmenting the size of the Extended Fund Facility (EFF) up to maximum levels.