ISLAMABAD: The International Monetary Fund (IMF) said on Sunday its delegation was expected to meet Finance Minister Ishaq Dar on the sidelines of the Geneva conference to “discuss outstanding issues and the path forward”.

The conference begins on Monday (today).

An IMF spokesperson confirmed that its managing director ‘had a constructive call” with Prime Minister Shehbaz Sharif in the context of the international conference on Resilient Pakistan and “expressed her sympathy to those directly affected by floods and supported Pakistan’s efforts to build a more resilient recovery”.

The statement came on the heels of figures released by the State Bank that the country’s foreign exchange reserves stood at $5.576 billion on Dec 30 — equivalent of three weeks of controlled, essential imports.

The reserves held by private banks stood at $5.846bn, taking the total to $11.42bn. Since then Islamabad has repaid about $1.2bn to a couple of UAE-based commercial banks, bringing down official reserves to $4.5bn.

Prime Minister Shehbaz Sharif had disclosed at a ceremony on Friday that IMF Managing Director Kristalina Georgieva, during a telephonic conversation, had assured him that her team would visit Pakistan for a review during the week beginning on Jan 9.

He had assured the lender of last resort that Pakistan was “committed to successfully completing the Fund’s ongoing programme”, adding the government had already taxed the rich but could not burden the poor.

The IMF statement said the MD had ‘expressed her sympathy to those directly affected by floods’.

However, there appeared to be some confusion about the IMF team’s visit because a meeting in Geneva between the Fund and Pakistan’s economic managers, led by Finance Minister Ishaq Dar, had been planned weeks ago.

Deputy Finance Minister Dr Aisha Ghaus Pasha had announced on Dec 29 in parliament that Ishaq Dar would have meetings with IMF officials during the donors conference.

Sources in the finance ministry, on the other hand, did not confirm dates for the IMF visit to Islamabad. The two sides had repeatedly been saying before Christmas holidays that they remain virtually engaged.

Led by Prime Minister Sharif, a large entourage of cabinet members, bureaucrats and diplomats would be attending the Resilient Pakistan Conference, co-hosted and organised by United Nations Secretary General Antonio Guterres.

Economic Affairs Ministers Sardar Ayaz Sadiq, Planning Minister Ahsan Iqbal and Climate Change Minister Sherry Rehman will hold separate sessions to sensitise international aid agencies and development partners to the devastation caused by floods, brief them about the country’s development needs and challenges to ‘build back better’ and the catastrophic effects of climate change on Pakistan.

Besides a briefing session, the finance minister will engage with lenders, particularly the IMF team. On return, the minister is expected to stay back in UAE for a similar support, along with discussions on divestment of shares of public sector entities on G2G basis.

The finance minister had said last week that the government would be shortly imposing a flood levy on the affluent and a gains tax on banks’ foreign exchange earnings.

The IMF and the authorities had not been able to agree upon the power sector’s circular debt management plan and gas price adjustments.

Under the combined seventh and eighth review leading to a disbursement of $1.18bn in the first week of September, Pakistan had given an undertaking to ‘trigger committed contingency measures at the earliest signs of fiscal programme underperformance’.

The fund now already wants an end of fiscal-year roadmap given that the last and 11th review will be very close in May next year based on end-March performance.

Pakistan committed that “as soon as monthly data show signs of underperformance against programme revenue targets (eg if data for an early month within a quarter suggest risks to quarterly performance), the government has committed to activating contingency measures as needed.

Published in Dawn, January 9th, 2023