On the sidelines of the upcoming Geneva conference, the Finance Minister Ishaq Dar will be met by a delegation from the International Monetary Fund (IMF) to “discuss outstanding issues,” according to a spokesperson for the lender on Sunday.
On January 9 (Monday), the International Conference on Climate Resilient Pakistan will be held in Geneva. The United Nations and Pakistan’s government will co-host the event.
In order to support the people and the government following the devastating floods of 2022, it aims to bring together representatives of the government, leaders from the public and private sectors, and members of civil society.
An IMF spokesperson confirmed to Dawn.com on Sunday that the global lender’s managing director had a “constructive call” on January 6 with Prime Minister Shehbaz Sharif.
“The MD once more expressed her sympathy to those who were directly impacted by the floods and supported Pakistan’s efforts to build a recovery that is more resilient,” reads the statement.
An IMF delegation is expected to meet with Dar on the sidelines of the Geneva conference to discuss “outstanding issues and the path forward,” according to the spokesperson.
The occurrence occurs just two days after PM Shehbaz stated that an IMF delegation would arrive in Pakistan in “two to three days” to complete the ninth review of Pakistan’s $7 billion Extended Fund Facility (EFF).
In 2019, Pakistan joined an IMF program for $6 billion, which was raised to $7 billion last year. The ninth review of the program, which would bring in $1.18 billion, is still pending. Due to the PML-N-led government’s refusal to accept certain Fund conditions, it had been delayed for two months earlier, and disagreements have not been resolved.
Following the premier’s telephone conversation with the IMF managing director on January 6, the Prime Minister’s Office issued a press release stating that PM Shehbaz invited Georgieva to the Climate Resilient Pakistan Conference in Geneva.
She said, “She thanked the prime minister for the invitation but explained that she will only be able to join the conference virtually” because the IMF board meetings were scheduled for January 9 and 10.
According to the statement, the prime minister also assured the managing director that Pakistan was committed to successfully completing the ongoing program and thanked her for comprehending the difficulties the nation has encountered.
Geneva moot
The premier announced in a tweet today that he would be departing for Geneva today.
Will make the most of the opportunity to tell the world about the flood victims’ story. He added, “I will also shed light on the steps my government has taken for relief and rehabilitation.”
The prime minister added, “Millions of Pakistanis affected by unprecedented devastation seek compassion and solidarity to rebuild better.”
At the conference, where United Nations Secretary General Antonio Guterres and French President Emmanuel Macron are also scheduled to speak, the delegation led by PM Shehbaz will present a recovery “framework.”
Knut Ostby, Pakistan Representative for the United Nations Development Program, stated, “This is a pivotal moment for the global community to stand with Pakistan and to commit to a resilient and inclusive recovery from these devastating floods.”
Khalil Hashmi, Pakistan’s ambassador to the United Nations in Geneva, stated that Islamabad was willing to pay approximately half of the bill and hoped donors would support the remainder.
He stated, “We will be mobilizing international support through a variety of means.” We are eager to collaborate with our partners.
Cash crunch
Foreign exchange reserves in the State Bank of Pakistan (SBP) depleted to an eight-year low of $5.576 billion during the week ending on December 30, 2022, indicating that the nation is currently experiencing a severe cash crunch. This amounts to imports for three weeks.
Due to this decline, the government was unable to repay its foreign debts without further borrowing from friendly nations.
Dar is still optimistic about reversing the situation with the anticipated financial assistance promised by friendly nations, despite rapidly decreasing SBP reserves; however, nothing has been accomplished as of yet.
During the week the SBP unfamiliar trade saves saw a surge of $245 million for outer obligation reimbursements.
The most troubling question for the PMLN-led coalition government, which is in serious danger of default, is how to service its foreign debt. There have been several unsuccessful attempts to restart negotiations with the IMF for the release of the next tranche.
The local currency has already suffered a significant depreciation in relation to the US dollar and other major currencies as a result of the falling reserves. From $16.6 billion in January 2022, the SBP’s foreign exchange reserves decreased $11 billion to $5.6 billion.
