Chief of Army Staff (COAS) General Qamar Javed Bajwa has appealed to the United States (US) to help Pakistan secure an early dispersal of $1.2 billion in funds under the International Monetary Fund (IMF) programme, reported Wajahat S Khan for Nikkei Asia.
Gen Bajwa spoke by phone with US Deputy Secretary of State Wendy Sherman earlier this week.
“The IMF has already granted Pakistan staff-level approval for the loan in question on July 13. But the transaction — part of the IMF’s $6 billion Extended Fund Facility for Pakistan — will only be processed after the multilateral lender’s executive board grants final approval,” said the report.
According to an IMF official who also spoke on condition of anonymity, the IMF is going into recess for the next three weeks and its board will not convene until late August. Because of the recess, no date has been set for announcing the loan approval for Pakistan.
“There is a major difference between staff-level approval and board approval. Our stakeholders, the countries that take the vote as to whether they are supporting this or not, make the final decision. This is a difference. So the legally binding step is a board approval, not the staff level agreement,” said the official.
Pakistan’s former ambassador to Washington, Husain Haqqani, said, “This reflects the Pakistan army’s concerns about the state of the economy. It also reflects that the Pakistan army chief is the authority with whom the global players feel the final word rests.”
Haqqani said that Pakistan has developed a habit of getting on an IMF plan, getting quick access to a couple of tranches, but then abandoning the deals without making the important structural and systemic changes required for further financing. This has left Pakistan little leverage with international financiers.
“The reason why the IMF program has been delayed is that Pakistan has a track record of not keeping its word with the IMF,” Haqqani said.
“Gen Bajwa calling the US administration, if he has done so, suggests that he is assuring the US — and through the US, the IMF — that any promises made will be kept.”