Friendly countries: IMF outcome thus hinges on debt rollover
Friendly countries: IMF outcome thus hinges on debt rollover

ISLAMABAD: An International Monetary Fund (IMF) condition for the successful conclusion of the ongoing sixth review talks with Pakistan authorities is the rollover of debt from friendly countries, including $1 billion from Saudi Arabia.

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This was stated by an official of finance ministry on strict condition of anonymity who further clarified that the presence of Shaukat Tarin in Riyadh with the Prime Minister at a time when the IMF talks on the sixth review have not yet concluded in Washington DC may be seen in the context of securing the rollover of the $1 billion debt and exploring the possibility of oil on deferred payment which would reduce the pressure on the balance of payment position.

Soon after Tarin was appointed as Finance Minister in April 2021, he had publicly stated that negotiations on the deferred oil facility, which would help Pakistan contain the flow of circular debt, are in the final stages and Saudi Arabia may be ready to sign on the dotted line now, the source added.

The official pointed to Tarin's meeting with the Saudi Ambassador prior to his departure for the US on 12th October 2021 and his meeting with Saudi Finance Minister while he was in the US to attend the IMF/World Bank annual meeting.

Pakistan-IMF talks have not failed, says Tarin

Pakistan's economic situation is 'not very good owing to increase in debt, and pressure on balance of payment position', the official told Business Recorder, adding that the country requires continuation of the IMF programme because it will ensure inflows that are in the pipeline from bilateral and multilaterals.

While talking to Business Recorder, security analyst Lieutenant General (retd) Talat Masood expressed optimism about Saudi Arabia's agreeing to roll over the loan. He added that Saudi Arabia and the UAE had always helped Pakistan in the past during an economic crisis.

When asked about the significance of the US Special Presidential Envoy John Kerry calling on Prime Minister Imran Khan in Riyadh, on the side-lines of the "Middle East Green Initiative (MGI)" summit, he added the US has good relations with Saudi Arabia and Saudi mediation may help relax the strained relation between the US and Pakistan which, in turn, may help ease the politically challenging conditions that the IMF is insisting on as a prelude to declaring the sixth review talks successful.

Pakistan accepts most of IMF conditionalities?

According to Prime Minister's Office, John Kerry stated that the US shared a longstanding relationship, which should be further reinforced in areas of mutual convergence, including climate and environment.

He acknowledged various initiatives undertaken by Pakistan to fight climate change. Emphasizing the priority attached by the US Administration towards the issue of climate change, Special Envoy Kerry briefed the Prime Minister on various measures undertaken by the Biden Administration for developing a broad global consensus on climate action in the run-up to the UNFCCC Conference of Parties (COP-26), later this month.

The Special Envoy acknowledged the huge potential of cooperation in these areas and expressed the desire to further explore opportunities of bilateral cooperation including in power generation projects from renewable sources.

The two sides agreed to work in close coordination to determine next steps in building an effective framework of cooperation in this regard. In the regional context, the Prime Minister underscored the importance of a peaceful and stable Afghanistan for Pakistan and the region.

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