Pakistan-IMF talks in Doha on May 18

Pakistan and the International Monetary Fund (IMF) may begin talks on May 18 in Doha, as the country's options to avoid insolvency have been limited after 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 functionary told The Express Tribune.

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, said the officials. However, Prime Minister Shehbaz Sharif will have to overcome all obstacles from his cabinet members before that and has to make a decision on fuel subsidies.

The sources said Prime Minister Shehbaz had directed the finance ministry to once again ask the IMF to partially relax its condition of increasing fuel prices.

The development comes amid a delay in finalisation of new loan deals with Saudi Arabia, China and the United Arab Emirates (UAE).

Pakistan is awaiting a rollover of $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 on the hope of getting it back in April but still remains undisbursed.

The sources said China wanted that its loans could 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 use for making payments against Chinese imports. The sources added that the decision was pending.

No dates for Prime Minister Shehbaz'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 the sources.

The finance ministry did not officially comment on the matter.

The sources 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 $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.