Pak finance minister says technical reasons behind delay in deal

The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.

Islamabad: Pakistan’s Finance Minister Ishaq Dar said on Monday that certain technical reasons were behind the delay in an agreement with the IMF as he clarified that his recent remarks about the country’s nuclear and missile programme were being used out of context.

His clarification hours after the International Monetary Fund (IMF) rubbished claims that it has attached nuclear-programme-related strings for the revival of Pakistan’s much-anticipated bailout programme that has been stalled for months.

Dar last week said in the Senate that there would be no compromise on the country’s nuclear and missile programme. He made the comment in response to Senator Raza Rabbani’s questions about the delay in signing the agreement with the IMF.

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In a press statement, Dar said that his comments with regards to Pakistan’s nuclear programme were in response to a colleague Senator’s specific question, wherein, “I emphasised that Pakistan has the sovereign right to develop its nuclear programme, as it best suits our national interests. Without any external dictation, which, by no means should in any way whatsoever be linked with the ongoing negotiations with the IMF.”

“It is clarified that neither the IMF nor any country has attached any conditionality or made any demand from Pakistan with regard to our nuclear capability and the delay in IMF staff-level agreement is purely due to technical reasons, for which we are continuously engaged with the IMF in order to conclude it at the earliest,” he said.

Cash-strapped Pakistan is awaiting a much-needed USD 1.1 billion tranche of funding from the Washington-based global money lender, which was originally due to be disbursed in November last year.

The funds are part of a USD 6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.

Pakistan, currently in the throes of a major economic crisis, is grappling with high external debt, a weak local currency and dwindling foreign exchange reserves enough to shore up for barely one month’s imports.

Esther Perez Ruiz, IMF’s resident representative in Islamabad, has denied attaching any strings to the External Fund Facility (EFF), according to Geo TV.

“Regarding recent speculation that programme discussions with the authorities for the ninth review under the IMF-supported programme may have covered Pakistan’s nuclear weapons programme, I want to be categorical that there is absolutely no truth to this or any insinuated link between the past or current IMF supported programme and decision by any Pakistani government over its nuclear programme,” the report said, quoting the official.

The IMF chief said discussions have exclusively focused on economic policies to solve Pakistan’s economy and balance of payments problems, in line with the Fund’s mandate for promoting macroeconomic and financial stability.

Apart from the IMF, Pakistan Tehreek-e-Insaf party’s Shah Mahmood Qureshi assailed Dar and demanded that Prime Minister Shehbaz Sharif issue a policy statement on remarks of Dar.

“No one has the right to tell us what kind of nuclear programme we should have and missiles of which range we should have. We have our atomic arsenal South Asia-specific and to ensure our defence,” he said.

The controversy erupted after Dar assured Parliament that the federal government would not make any compromise on the country’s nuclear and missile programme despite tough economic conditions and hurdles to secure a loan from the IMF.

“Let me assure you that nobody is going to compromise anything on the nuclear or the missile programme of Pakistan no way,” Dar told Parliament last week.

Dar also indirectly held Pakistan Tehreek-e-Insaf (PTI) party and its chief Imran Khan responsible for the delay in the IMF funding as he blamed the then government of Imran Khan for agreeing on tough conditions to get the funding.

Separately, Prime Minister Shehbaz Sharif said that Pakistan’s nuclear programme was being “jealously guarded by the state”.

Pakistan has been hosting the IMF mission since early February to negotiate the terms of the deal, including the adoption of policy measures to manage its fiscal deficit ahead of the annual budget due around June.

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