IMF may decline to club sixth and seventh reviews

ISLAMABAD: The IMF may decline to club the sixth and seventh reviews under the $6 billion Extended Fund Facility (EFF) as requested by Islamabad as currently, both sides are making efforts for accomplishing only the sixth review.

Top official sources confirmed to The News that the IMF staff was considering only evolving a consensus on standalone sixth review during the ongoing parleys being held in Washington, DC, with Pakistani authorities.

On the other hand, Minister for Finance Shaukat Tarin’s tenure has already expired without being elected as member of the Parliament and the government had not yet issued a formal notification for appointing him as Adviser to PM on Finance and Revenues as yet. It is creating an embarrassing situation for Tarin, who is currently in New York after holding policy level talks with the IMF in Washington, DC, last week.

When the completion of the sixth review was delayed in July, then Minister for Finance Shaukat Tarin had confirmed that Islamabad would make a request to combine the sixth and seventh reviews and release of $1 billion tranches under the EFF arrangement. Now the IMF is distancing itself from the completion of 6th and 7th reviews simultaneously, so the completion of sixth review was only under consideration.

This scribe sent out questions to both the IMF’s Resident Chief in Pakistan, Teresa Daban Sanchez, and Ministry of Finance for getting version on this development. When contacted, IMF’s Resident Chief replied, “The IMF team remains engaged with Pakistani counterparts on moving forward our work agenda. We are looking forward to our continued discussions with the Pakistani authorities on set of policies and reforms that could form the basis for the completion of sixth review under the EFF."

When this scribe asked her again for explaining whether the clubbing of sixth and seventh reviews under the EFF was under consideration but got only a brief reply: “Same response as above”.

The same question was sent to the Ministry of Finance for seeking official response but no response was received.

However, the IMF in its last review staff report had stated that the IMF Staff agrees with the authorities’ request to modify the schedule of reviews and retain the quarterly schedule of reviews until end-2021 to closely guide policy implementation (including critical tax policy reforms) in the face of persisting macroeconomic vulnerabilities and heightened uncertainty arising from the ongoing Covid-19 pandemic. The Fund Staff also concurs with the authorities’ request to rephase the remaining access under the program from this review onwards with the disbursement for the combined second, third, fourth, and fifth reviews adjusted to the temporarily lower-than-expected BOP need.

Meanwhile, the Ministry of Finance in its statement issued on Sunday night stated that “Negotiations between Pakistan and IMF are moving forward positively. Secretary Finance Division is leading the talks in Washington DC while the technical teams of both sides are continuing detailed discussions in virtual format after exchange of relevant data sets. No time-frame was set at any stage for conclusion of talks," the official statement concluded.