Finance Minister Asad Umar has said that Pakistan can wait two months before deciding on an IMF programme.
“We aren’t in a hurry,” he is quoted by Bloomberg in a report, words that echo remarks he began making publicly even while the IMF negotiations were under way. “We are covered even if it delays for two months.”
The remarks were made on the sidelines of a conference being held in Islamabad. A month’s delay would push the start of any programme to the end of January. In his earlier remarks, he had hinted at mid-January as the date they were looking at for the board’s approval of a programme.
“We still want to have the programme,” he told Bloomberg. “But we’re not in a hurry to have it. It will ease and open up other funding avenues.”
The government is looking to bilateral assistance from “friendly countries” to help plug a $12 billion hole in the external accounts. Help from Saudi Arabia began arriving last week as $1 billion from a committed $3bn of cash support landed in the State Bank’s coffers. An additional oil facility worth $3bn more is also on the cards, according to government announcements.
In addition, the government is continuing talks with the Chinese, though thus far without any announced outcome. Those talks began when Imran Khan made his maiden visit as prime minister to Beijing earlier this month, where the Chinese authorities promised a “new chapter in cooperation” between the two countries, and Premier Li Keqiang said Beijing was open to providing assistance to Pakistan “but more talks are needed” first. Those additional talks are still continuing.
Subsequent visits to the UAE and Malaysia by the prime minister have not, thus far, yielded concrete evidence of balance of payments support, but the government remains hopeful that further assistance is in the pipeline.
Mr Umar is also looking to tap funding lines from the World Bank, Asian Development Bank as well as private markets in the months to come. This multilateral support, and the private inflows it makes possible from global markets, is helped along if the country is in an IMF programme.
According to recent media reports, the government and IMF failed to reach a conclusion in recent talks because the pace of adjustment being asked for by the Fund was too fast for the government. The reports suggest the IMF asked for the exchange rate to be free floated and power sector liquidity issues to be resolved by passing the weight of the losses onto the consumers. This would result in a sharp power tariff hike, something the government wants to avoid at the outset of its term.