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The International Monetary Fund makes “rare” contacts with political stakeholders – Business

The International Monetary Fund makes “rare” contacts with political stakeholders – Business

• The Fund seeks assurances from PTI and PPP leaders. The two parties agree to an agreement worth $3 billion
• Hammad says PTI supports “overarching goals and key policies” for macroeconomic stability

ISLAMABAD: In a “rare” move that appears to be seeking assurances from political parties for a new lender-backed program, a team from the International Monetary Fund has held meetings with the leadership of PTI and PPP to seek support for the implementation of the $3 billion standby arrangement.

The meetings come about a week before the IMF’s executive board meets to review the $3 billion arrangement for Pakistan on July 12, after finalizing a staff-level agreement.

Pakistan was absent from an earlier schedule released in June, prompting speculation that the IMF would not release funds from an earlier program that ended on June 30.

On Friday, IMF Resident Representative Esther Perez Ruiz met the economic teams of the Pakistan Peoples Party and the opposition PTI party.

However, it is not yet known if the IMF team will meet other members of the coalition government – including the JUI-F led by Maulana Fazlur Rahman who also heads the PDM ruling coalition.

Ahead of the meetings, Ms. Ruiz said IMF staff were on their way to meet with representatives of Pakistan’s major political parties — including the PML-N, PPP and PTI — to get assurances of their support for key goals and policies under the regime. new. An IMF-supported program ahead of the impending national elections.

said economist Dr. Ashfaq Hassan Khan, who has advised the government in the past dawn The IMF team’s meetings with political parties were somewhat out of the ordinary.

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He explained that before any programme, IMF officials would usually meet with stakeholders, such as representatives of chambers, banks and trade unions. “I don’t remember this [political] meetings.”

However, others have speculated that since the SBA agreed with the International Monetary Fund’s perceptions of holding elections this year, the fund appears to be counting on negotiating a new program with the next government, whatever its formation.

In recent months, the IMF has done its best to make it clear that it does not favor any particular party over another, and will negotiate with whichever party forms the next government. Some observers feel that these meetings should be seen in the same vein.

Meet with PPP

As part of the move, the IMF representative consulted with the economic team of the Pakistan Peoples Party, an important member of the coalition government, to gain their support.

Trade Minister Naveed Qamar said dawn that the meeting “only discussed the standby agreement, and nothing else”. He added that the IMF wanted comprehensive support, but there was no discussion about the future.

According to the PPP leader, the IMF wanted political input on the matter and the party informed him that the PPP, as part of the government, supports the agreement and the need for an IMF programme.

He explained that without the program, there would be serious repercussions on the economy. Mr. Qamar also mentioned that this is the first time that they are having discussions with political parties.

During the last program of the International Monetary Fund, the Fund interacted with members of the Finance Committee in the National Assembly. He clarified that there were no talks about the elections because they are not within the competence of the IMF team.

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This development is taking place at a time when many analysts warn that the uncertain political climate in Pakistan may derail the IMF programme. The coalition government’s term is set to expire within a month, with a caretaker government taking charge for three months to oversee the upcoming general elections.

PTI welcomes the agreement

Later in the day, Ms. Ruiz called former Prime Minister Imran Khan at his residence in Zaman Park in Lahore. The meeting was attended by the IMF’s mission chief in Pakistan, Nathan Porter, who joined the discussion virtually from Washington.

The PTI team included Party Chief Imran Khan, Shah Mehmood Qureshi, Hammad Azhar, Shaukat Tareen, Umar Ayub Khan, Dr. The meeting lasted more than an hour.

PTI Chairman Hammad Azhar said discussions took place on a staff-level agreement reached by the IMF with the government to arrange a nine-month reserve worth $3 billion. “We support the general goals and the main policies,” Azhar said.

“We welcome the SBA agreement to maintain macroeconomic stability by anchoring external financing and sound policies ahead of national elections scheduled for this fall and until the formation of a new government,” the statement said.

“We want to stress the importance of the program to protect low-income segments of the population from high inflation,” she said.

The PTI leader said that after free, fair and timely elections, a new government mandated by the people will begin to undertake reforms and engage on a longer-term basis with multilateral institutions to promote economic transformation and higher and more inclusive growth, the statement said. .

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Azhar stated that the head of the authority stressed the importance of the program to protect low-income segments of the population from inflation. He stated that PTI considers political stability and rule of law as an integral part of Pakistan’s economic stability.

No comments from the government

The government kept silent about the meeting between the IMF team and PTI chief Imran Khan and his team. It is also unclear whether the government knew about the IMF’s meetings with PPP and PTI.

The government had previously responded to a statement from the International Monetary Fund regarding political stability, describing it as interference in the country’s internal affairs.

The prime minister’s coordinator for economic and energy affairs, Bilal Azhar Kayani, was the only one to respond, criticizing the opposition party for celebrating their meeting with the IMF after violating the agreement during their tenure.

Mr. Kayani stated that Imran Khan and his team should not be plotting any new conspiracies against the New Deal, as the IMF team was meeting with all political parties, not just them.

Mansoor Malik in Lahore also contributed to this report

Published in Dawn, July 8, 2023