Pakistan “engaged” with IMF for bailout package: Ministry of Finance

Pakistan has been negotiating a deal with the IMF since November last year to shore up the country’s dwindling foreign exchange reserves and avert the possibility of a balance-of-payments crisis. (Reuters/photo)
Updated 04 March 2019
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Pakistan “engaged” with IMF for bailout package: Ministry of Finance

  • IMF program expected to be signed in April, says an EAC member
  • Pakistan’s urgency for IMF loan was somewhat reduced by $6 billion cash assistance from Saudi Arabia, UAE

ISLAMABAD: Pakistan’s Ministry of Finance said on Sunday that negotiations with the International Monetary Fund (IMF) for a bailout package have been in progress and the deal may mature in the coming week.

“We are still engaged with the IMF,” Saeed Javed, Media Director at the Finance Ministry, told Arab News without revealing further details.

Pakistan and the IMF will reach an agreement over a bailout soon, with a potential bailout size of about $12 billion, said FitchSolutions, a statistical rating organization headquartered in New York, in a statement issued last week.

However, Javed neither confirmed nor denied the report, saying “the volume of the loan from the IMF will become clear in the next few days.”

Pakistan has been negotiating a deal with the IMF since November last year to shore up the country’s dwindling foreign exchange reserves and avert the possibility of a balance-of-payments crisis. But the agreement is yet to be reached due to “tough economic conditions” the Fund may impose before it offers financial assistance.

“We expect to see a bailout package that focuses on fiscal consolidation, a review of monetary and exchange rate policy, financial reforms, and structural reforms, similar to measures implemented in the previous loan agreement,” the FitchSolutions said.

Hopes for the expected bailout package soared in the second week of February, when Prime Minister Imran Khan called on IMF Managing Director Christine Lagarde in Dubai and they both agreed to “work together” on policy priorities and reforms to fix the country’s fledgling economy. But Finance Minister Asad Umar has repeatedly said that Pakistan would sign the financial deal with the IMF only if it “gets the loan on favorable conditions.”

Dr. Ashfaque Hasan Khan, senior economist and a member of the Economic Advisory Council of the government, said the prime minister and his team have been looking for a “good deal,” thinking that this is the way forward to “steer the economy out of crisis.”

“I personally feel the deal with the IMF will be signed in April this year and it will be applicable from July,” he told Arab News.

This will be the country’s 13th loan program since the late 1980, though the government claims that this will be the last one to support the economy. Until now, Islamabad has managed to successfully complete only one IMF program – meaning that it received all the disbursements as planned – that ended in 2016.

Muzamil Aslam, senior economist and former CEO of EFG-Hermes Pakistan, said the government’s urgency for the IMF package was somewhat reduced by $6 billion direct cash assistance ($3 billion each) from Saudi Arabia and the United Arab Emirates and it had bought itself some “bargaining time” to deal with the Fund.

“If the government signs a financial package with the IMF by accepting all its terms and conditions, then Pakistan is likely to plunge deeper into the economic crisis instead of coming out of it,” he told Arab News.


Indonesia looks for investment opportunities in Yemen

Updated 20 September 2019

Indonesia looks for investment opportunities in Yemen

  • Indonesia’s ambassador to Yemen expressed Indonesia’s interest in various fields
  • There are currently more than 2,500 students from Indonesia studying in Hadramout

DUBAI: Indonesia’s ambassador to Yemen discussed investment opportunities in the country with Yemeni officials in Hadhramout on Thursday, Saba News reported.

Hadhramout Local Authority and Leaders of Industrial and Commercial Chamber of Hadramout met with Ambassador Mustafa Tawfiq to discuss ways to strengthen trade exchange between the two countries.

The ambassador expressed Indonesia’s interest in various fields including scholarship programs and training for small business.

“In light of the current situation in Hadhramaut and the security and stability achieved, commercial and industrial relations between Hadhramaut and Indonesia are witnessing a remarkable and significant development in this aspect,” Tawfiq said, calling for increased visits between businessmen in Hadramaut with their Indonesian counterparts to expand the economic partnership between the two sides.

Meanwhile, Assistant Deputy Governor of Hadhramout for the Valley and Desert Districts Affairs, Abdulhadi Al-Tamimi welcomed Indonesia’s interest in investment opportunities, praising the historical relations between Yemen and Indonesia.

There are currently more than 2,500 students from Indonesia studying in Hadhramout, Al-Tamimi said.

The Indonesian envoy welcomed local businessmen to visit Indonesia next month where Jakarta will hold the 43rd Trade Expo where more than 1,100 companies will be participating.

However, the Yemeni official raised the issues of obtaining visas to Indonesia after the embassy’s move to Amman, Jordan from Sanaa after the Houthi militia took over the Yemeni capital.