Assurances from other donors ‘must to complete’ IMF deal

[HAIDER]

Assurances from other donors ‘must to complete’ IMF deal​

Anwar Iqbal Published March 25, 2023 Updated about an hour ago

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WASHINGTON: For the first time since in its months-long negotiations with Pakistan, the International Monetary Fund (IMF) on Friday tied assurances from the country’s external partners with the renewal of its package deal.
Julie Kozack, the Fund’s Director for Strategic Communications, underlined this at a virtual news briefing here, where she also referred to the talks the IMF has been holding with Pakistan.
“Discussions are ongoing between IMF staff and the Pakistani authorities towards a Staff-Level Agreement on policies to complete the ninth review of Pakistan’s extended Fund Facility. Timely financial assistance from external partners will be critical to support the authorities’ policy efforts and ensure the successful completion of the review,” she said.
This could be a major disappointment for Pakistani officials, who hope that an agreement with the Fund on the completion of the ninth review of a $7bn loan programme would come first and would not only lead to a disbursement of $1.2bn, but also unlock inflows from friendly countries.



The IMF official acknowledged that Pakistan’s economy faced multiple challenges, including slowing growth, high inflation, and large financing needs. “And of course, this is all coming on the back of devastating floods, she added.
Ms Kozack also acknowledged that Pakistani authorities were committed to implementing the necessary reforms and had started to implement decisive actions to stabilize the economy and restore confidence.
The talks with Pakistan, she said, also focused on providing space to accommodate the needs related to the floods, including through an increase in social assistance through the Benazir Income Support Program, which aimed at the most vulnerable.
When asked what assurances Pakistan needed from its external partners, the official said: “At this point, ensuring that there is sufficient financing to support the authorities is the paramount priority.”
Explaining the link between these assurances and the IMF deal, Ms Kozack said: “A Staff Level Agreement will follow once the few remaining points are closed. I can also say that financing assurances, right, what we’re looking for here, are a standard feature of all IMF programmes.”
She pointed out that besides IMF’s support, Pakistan’s external fund facility (EFF) supported program receives financing from other multilateral institutions, including the World Bank, the ADB, and the AIIB and bilateral partners, notably China, Saudi Arabia, and the UAE.



“So, we do need to ensure that we have those financing assurances in place in order for us to be able to take the next step with Pakistan,” said the IMF official, making it abundantly clear that Pakistan will need to have those assurances to finalise the deal.
The IMF’s resident representative in Pakistan, Esther Perez Ruiz, has already pointed out that a few remaining points, including a recently introduced fuel subsidy scheme, needed to be settled before a staff-level agreement could be signed.
Talking to Reuters, she said the Fund would ask the government for more details, including how the subsidy would be implemented and what protections would be put in place to prevent abuse.
Since last week, the IMF has been unusually candid in its statements about Pakistan. On Thursday the Fund clarified that the ninth tranche of its EFF programme with Pakistan was not linked to elections.
Decisions regarding the constitutionality, feasibility and timing of the provincial and general elections rest solely with Pakistani institutions,“ IMF’s Resident Chief in Pakistan Esther Perez Ruiz said in her statement.
Her statement came after the Finance Ministry informed the Election Commission of Pakistan (ECP) earlier this week that the country was facing a severe economic crisis and financing the elections at this stage could cause the government to miss IMF targets.
Last week, the IMF also clarified that the IMF does not discuss defence issues with the borrower and that it never raised the nuclear issue in its discussions with Pakistani officials.
Published in Dawn, March 25th, 2023

 

[maithil]

Poking IMF with Nuclear blackmail and election funding issue was not a good idea after all.

 

[epebble]

Poking IMF with Nuclear blackmail and election funding issue was not a good idea after all.

That was no poke, he was just playing for the domestic gallery. I think IMF is just making excuses anyway. First because they don't want to sign a deal with a non-government government that may be thrashcanned in a few months and second, they don't want to send funds that will promptly go to other creditors.

 

[Dalit]

Wasn't Dar promising a deal every other week?

 

[epebble]

Wasn't Dar promising a deal every other week?

It looks like the deal may be a mirage. The funds may appear after the elections bring a stable government and default so that money won't be immediately sent over to creditors. This is how Debtor-in-possession financing works in Chapter 11.

Elusive deal​

Elusive deal

The cost of ineptitude in dealing with the IMF will be brutal.

www.dawn.com

 

[TheDarkKnight]

Dont worry Ishaq Dar will sort them out soon.

 

[Crimson Blue]

So following seems to be plan outlined by Phooj to keep Pakistan afloat:

Apparently COAS has told some of close compatriots that Diko Diq investment (brokered in 2021) would start coming in after September 2023 which would help improve fiscal situation.

I am not sure if this is the plan of Phooj or if this is what Ishaq Dar has fed them. But if incumbents are counting on Riko Diq money, then it makes sense for them to delay elections till those billions of dollars start pouring in.

https://twitter.com/x/status/1640964707510018048

 

[epebble]

So following seems to be plan lined out by Phooj to keep Pakistan afloat:

Apparently COAS has told some of close compatriots that Diko Diq investment (brokered in 2021) would start coming in after September 2023 which would help improve fiscal situation.

I am not sure if this is the plan of Phooj or if this is what Ishaq Dar has fed them. But if incumbents are counting on Riko Diq money, then it makes sense for them to delay elections till those billions of dollars start pouring in.

https://twitter.com/x/status/1640964707510018048

This is the money line (Web translation)

Reko Diq will bring $70 billion in investment in September.

Most absurd statement. No investment agreement starts with placing $70 Billion Cash on the Barrel before even breaking the ground.

This is the real financial picture:

Barrick plans to deliver production from Phase 1 in 2028 at a cost of around $4 billion, with Phase 2 to follow in five years at a cost of roughly $3 billion. The gold miner owns 50% of Reko Diq, with the rest divided 25% by three federal state-owned enterprises, 15% by the Province of Balochistan on a fully funded basis and 10% by the Province of Balochistan on a free carried basis.

A simple reading of the above leads to Pakistan (federal) getting about $1 billion by 2028 and $750 million by 2033. Similarly, Province of Baluchistan will get $1 Billion by 2028 and $750 million by 2033.

https://www.mining.com/barrick-gold-to-go-ahead-with-7bn-reko-diq-project/

 

[Crimson Blue]

This is the real financial picture:

Now you understand why this country is in shithole while everyone else in our neighborhood is making some sort of progress. These Generals who thinks of themselves as the most competent specimens of humankind, could not even comprehend basic economic concepts.

So Dar & co. can feed them anything to buy more time. Or may be his compatriots are telling him this so that he can continue to rule confidently thinking that things would start getting better in September 2023.

Read this development together with this and you would get some idea that Dar & co are just buying time by delaying IMF deal and telling army that Riko Diq money would start pouring in September.

 

[epebble]

Now you understand why this country is in shithole while everyone else in our neighborhood is making some sort of progress. These Generals who thinks of themselves as the most competent specimens of humankind, could not even comprehend basic economic concepts.

So Dar & co. can feed them anything to buy more time. Or may be his compatriots are telling him this so that he can continue to rule confidently thinking that things would start getting better in September 2023.

What is stupid and sad is this public information is available with 30 seconds of search and someone decides to write a news article with 10 times the figure in an utterly impossible style (of transaction).

 

[HAIDER]