ISLAMABAD: Finance Minister Ishaq Dar on Sat­urday said he had cance­lled his trip to Washington for the spring meetings of the International Monet­ary Fund and World Bank on the prime minister’s orders, due to the political turmoil in Pakistan.

However, he assured the nation that the IMF deal was on track and the government had already done all that was required from it to conclude the ninth review of the loan programme.

“These are routine rituals. However, a constitutional crisis has been created in Pakistan,” Mr Dar said in a televised address.

He said the crisis had been compounded by the April 4 Supreme Court order striking down the government’s plans to delay elections to Punjab and Khyber Pakhtunkhwa assemblies.

Rejected reports linking the cancelled trip to a holdup in Pakistan’s IMF bailout programme, he said that a “constitutional crisis” was created by the Supreme Court, which has demanded that the government provide Rs21 billion to the Election Commission by April 10 to conduct the polls.

“Of course, the finance ministry and the cabinet have an important responsibility in this regard, and I am a part of it,” he said. “Due to these circumstances and on the prime minister’s directives, I have dropped my plan to visit Washington [physically].”

However, Mr Dar said he would attend important bilateral and multilateral meetings virtually and a Pakistani delegation would be present in the United States.

Apparently, Mr Dar was not comfortable with the election schedule. “I can speak at length over the details of the entire process,” he said without elaborating.

Elections had been postponed in the country in the past, he said, citing the assassination of former prime minister Benazir Bhutto, floods and earthquakes. He wondered why the same couldn’t be done this time, keeping in view the current economic situation of the country.

The Supreme Court’s order has created a standoff as the coalition government has already passed a resolution in the National Assembly to not obey the apex court’s orders to conduct polls in Punjab on May 14. A similar rejection was earlier issued after a cabinet meeting headed by Prime Minister Shehbaz Sharif.

The federal cabinet is again meeting on Sunday (today) to review the situation, especially the release of funds to the ECP as directed by the Supreme Court.

Responding to speculations on social media that the IMF had told Mr Dar not to attend the meetings, he said: “The IMF can’t tell me not to attend. Pakistan is a member of the World Bank and the IMF. It is not a beggar,” he said.

He reminded that the IMF only suspended Pakistan’s loan programme after the nuclear tests while talks were held despite global sanctions.

On sovereign payments, Mr Dar said that the country did not even delay it for a minute. Pakistan had paid $11bn in the last few months, he said, adding that there was no chance of default over sovereign payments.

IMF talks

Mr Dar said the government, on its part, had completed all requirements of the IMF’s programme review for the release of a $1.1bn tranche.

“We are now only awaiting the confirmation of a $1bn commitment from one friendly country,” he said. After that, all their requirements to conclude the staff-level agreement with the IMF would be complete, he said. “We have completed all prior actions required for the staff-level agreement,” he added.

Mr Dar said another country had already confirmed it would provide $2bn. While he did not name the two countries, Minister of State for Finance Dr Aisha Ghaus Pasha on Thursday said Saudi Arabia had conveyed to the IMF its commitment to provide financing to Pakistan.

It has been widely reported that $2bn has been committed by Saudi Arabia, while confirmation of $1bn was awaited by the United Arab Emirates.

Mr Dar said once the $1bn was confirmed, a staff-level agreement would be reached. He denied that there were any other pending issues.

Pakistan is in danger of defaulting on its debt, with an IMF bailout programme stalled since November, while a bruising political battle is raging between the government and former prime minister Imran Khan.

The country’s foreign exchange reserves have already dipped to around $4.2bn, which can barely cover one month of controlled imports.

The government has been trying to secure a tranche of $1.1bn of the IMF programme since February.

The finance minister acknowledged that there was a new development with the IMF deal over the past few weeks due to the “cross-subsidy” on fuel prices. He said several rounds of communication were held with the Fund on this issue. “We gave them a satisfying answer because that subsidy is not a part of the budget,” he said.

Published in Dawn, April 9th, 2023