Pakistan army chief seeks US help on IMF loan to avoid default
Islamabad, Jul 29 (EFE). Pakistan’s army chief General Qamar Javed Bajwa reached out to Washington for help in securing an early disbursement of a loan from the International Monetary Fund as the country faces a deepening economic and balance of payment crisis amid political uncertainty.
Bajwa, considered most powerful man in the country, spoke with United States Deputy Secretary of State Wendy Sherman earlier this week in what is considered a highly unusual move, a senior official in Islamabad privy to the development told EFE Friday.
“General Bajwa requested Ms (Wendy) Sherman that the US push the IMF to immediately release the tranche to Pakistan as it needs it the most,” said the official, who asked not to be named on not having authorization to speak to the press about the matter.
The official revealed an appeal was made to the White House and the Treasury Department for securing a nearly $1.2 billion loan.
On Jul.13, the IMF had reached a staff-level agreement with Pakistan for the release of a portion of the $6 billion bailout package approved in 2019. However, the IMF executive board is yet to grant a final approval.
The coalition-government led by Prime Minister Shehbaz Sharif is currently dealing with high inflation rate, increasing trade deficit and dwindling foreign reserves that have fallen below $9 billion, equivalent to two months of the country’s import bill.
The Pakistani rupee has been plummeting against the US dollar. The local currency fell to 240 units against the USD on Friday, it’s lowest in history.
On Thursday, the analytics firm S&P Global downgraded Pakistan’s outlook from “stable” to “negative.”
The US is the largest shareholder in the IMF, founded in 1945. The success of Bajwa’s outreach to the Joe Biden administration remains to been.
The earlier US administration led by Donald Trump had openly expressed reservations about Pakistan using IMF loans to pay back China, a rival of the US.
“I am not aware if the US was convinced or whether the move will produce any positive results,” the official said, adding that it was nevertheless a positive development at a time when the country is on the brink of debt default.
“The army chief has done what should be done in the interest of the country,” the source underlined.
On earlier occasions, Bajwa visited China, Saudi Arabia and the UAE in search of financial assistance, instances that reinforced the perception of him as the real power behind the scenes in the nuclear-armed state.
Apart from the economic crisis, the Sharif government also faces a political challenge from his rival, former Prime Minister Imran Khan, who has been pressing for early elections.
Although Khan was overthrown in a vote of no confidence in April, his Pakistan Tehrek-e-Insaf party is in power in two of the country’s most populous provinces, making it difficult for Sharif to function smoothly.
Pakistan is one of the countries that has most required financial assistance, amounting to a total of 22 requests for IMF grants since 1958, of which only one was completed.
This country of more than 200 million people has recently seen fuel prices rise by as much as 90 percent, along with escalating electricity and gas rates, apparently in an attempt to meet IMF conditions. EFE
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