Pakistan, IMF may begin talks in Qatar on May 18
ISLAMABAD: Pakistan and the International Monetary Fund (IMF) may begin talks on May 18 in Qatar, as the country’s options to avoid insolvency have been limited ater it could not immediately receive any major financial support from its three friendly countries.
Subject to the government’s willingness to start withdrawing fuel subsidies from May 15, the two sides have tentatively planned to meet in Qatar for policy level discussions to revive the programme and extend its tenure and size to $8 billion, a senior government official said.
The IMF has informed the government that it could send a mission to Doha for one week on May 18 for talks with Pakistan on the revival of the Extended Fund Facility (EFF), said officials. However, Prime Minister Shahbaz Sharif will have to overcome all obstacles from his cabinet members before that and has to make a decision on fuel subsidies.
They said the prime minister had directed the finance ministry to once again ask the IMF to partially relax its condition of increasing fuel prices.
Pakistan is awaiting a rollover of a $2.3 billion Chinese commercial loan. Another $1 billion Chinese deposit is maturing this and the next month. China has now placed a condition for the renewal of its $2.3 billion loan, which Pakistan returned in March in the hope of geting it back in April but still remains undisbursed.
Officials said China wanted its loans to not be used for any purpose and should only be treated as part of the reserves because of Pakistan’s weakening financial situation.
The government has requested that the loan money should at least be allowed to be used for making payments against Chinese imports. The sources added that the decision was pending.
No dates for the premier’s maiden visit to China have been announced but the possibility of visual contact between the heads of the two governments was being explored, said officials.
They said the prospects for immediate additional cash injection by Saudi Arabia before an IMF deal were not very high. However, it is unlikely that the kingdom would withdraw the $3 billion cash facility that had been secured in November last year at an interest rate of 4%.
The chances for receiving more oil on deferred payments over and above the existing limit of $100 million per month were also low, they added.
Late last year, Pakistan had secured a $1.2 billion annual oil facility ($100 million per month) on deferred payment at an interest rate of 3.8%.
Instead, officials said, Saudi Arabia has offered to facilitate Pakistan in receiving oil facility from Islamic Development bank’ s commercial arm-international Islamic Trade Finance Corporation (ITFC) or from the Organisation of the Petroleum Exporting Countries (OPEC) Fund for International Development.