No additional US conditions on $6billion IMF package for Pakistan

  • US placed no specific conditions on the $6billion International Monetary Fund (IMF) package.
  • The United States has withdrawn $130 million in assistance to Pakistan has as a result of Dr. Afridi’s incarceration.
  • IMF package is Pakistan’s 13th package in the last 30 years and has been approved after carrying out a professional evaluation, based on the country’s liquidity status.
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No additional US conditions on $6billion IMF package for Pakistan

The United States has not put any specific conditions on a $6 billion the International Monetary Fund (IMF) package for Pakistan.

This was revealed by the country’s envoy Asad Majeed Khan. At a Washington think-tank this week, Ambassador Khan said:

“I haven’t heard of any specific conditions that the United States has particularly pushed for,” adding that “It is so far a technical process that the IMF personnel are leading and steering.”

When a cong­ressman advised linking the package to Dr. Afridi’s release, Alice G. Wells, who looks after South and Central Asian affairs at the State Department, said:

“$130 million in assistance to Pakistan has been withdrawn already as a result of his incarceration.”

At a recent congressional hearing when pressed by lawmakers to slap additional conditions on the loan package, Ms. Wells reminded them that the US had already expressed its views on this issue even before the IMF and Pakistan reached an agreement.

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“We have shared our strong views and Secretary (Mike) Pompeo has also done so publicly on the need for any package to include a real structural reform to reinforce,” she said.

Discussing the economy of Pakistan this week, US scholar George Perkovich asked Ambassador Khan if the US is putting additional conditions on the IMF package and if those are different from the ones suggested previously.

“The IMF has its own board, technicalities and missions that go across to a country and engage with the people and decide the elements of the package,” said the Ambassador.

He agreed with Mr. Perkovich that this is going to Pakistan’s 13th package in the last 30 years. The IMF had approved the loan after carrying out a professional and technical evaluation, based on the country’s liquidity status, he reminded.

He also said that Pakistan has never defaulted on its debt payments. Our debt to GDP ratio is still good as compared to other countries at similar levels of development.

Last year in an interview with CNBC television, Secretary Pompeo said that the United States did not want Pakistan to use IMF loans to pay off Chinese lenders.

After that, both Chinese and Pakistani officials have clarified that when repayments to China start, Islamabad would have used the funds it’s receiving for structural reforms.

“Topping the bleeding of state-owned enterprises, expanding the domestic tax-base, generating resources, expanding exports, rationalizing tariffs, enhancing our competitiveness, these are tough decisions,” he said.

However, the government is determined to take these measures independent of what the IMF conditions might be, he added.

During the congressional hearing, Congressman Brad Sherman noted that America is the Fund’s largest contributor and the IMF could not have approved Pakistan’s request for the loan without Washington’s endorsement.

 

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