‘Global Institutions Want Us to Default Like Lanka’: Pak Govt Cries Foul as Crisis Bites – News18

Pakistan finance minister Ishaq Dar claimed that global institutions wanted Pakistan to default like Sri Lanka and then enter negotiations, Pakistan-based newspaper the Dawn said in a report.

Dar’s comments came while he was testifying before the Pakistan senate’s standing committee on finance. He also appeared to contradict himself as he insisted negotiations with the International Monetary Fund (IMF) were ongoing and the ninth review would be done within June.

READ: Pakistan’s New Budget is a Dud as Political Instability Repels IMF, Saudi, UAE

Dar said the IMF is not giving any reason for “unnecessary delay” behind the ninth review. “IMF or no IMF, Pakistan will not default,” Dar said and later telling the press that everything is arranged and in order.

He accused the IMF for demanding a $6bn guarantee on external resour­ces and accused the lender of pushing a political agenda. He claimed that guarantees for $3bn from friendly bilateral partners, Saudi Arabia and the United Arab Emirates, were met and the World Bank and the Asian Development Bank have assured disbursement of the remaining $3billion.

However, this week people familiar with the developments told the Dawn that bilateral donors, such as Saudi Arabia and the United Arab Emirates (UAE), are reluctant to help Pakistan, despite claims made by cabinet ministers of Pakistan Prime Minister Shehbaz Sharif.

They also said that the government’s claims on the budget being in line with the expectations of the International Monetary Fund (IMF) could be misplaced.

Dar said China realised the political agenda due to which its commercial banks agreed to roll over loans to Pakistan. He argued that Pakistan’s financing gap was projected at $6 billion when the staff-level talks were concluded earlier this year based on a $7 billion current account deficit, as per IMF estimates.

Dar claimed that the assurance of $3 billion was given by the Saudi Arabia and UAE to the IMF and the lender is also aware of the $400 million World Bank RISE project and $250 million by the Asian Infrastructure Investment Bank.

A Pakistani official this week said that “economic stability is linked to political stability” and another official said that focus should lie on “long-term reforms” which will help Pakistan get more funds from the IMF in the future. The person mentioned above also mentioned IMF and World Bank officials share the same sentiments but they are silent given the sensitivity of the issue.