April 29th 2024.
The Prime Minister of Pakistan, Shehbaz Sharif, recently met with the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, to discuss a new loan program for the country. The meeting took place on the sidelines of the World Economic Forum Special Meeting in Riyadh. During the meeting, Sharif expressed his gratitude to Georgieva for the IMF's support in securing a USD 3 billion standby arrangement for Pakistan last year, which helped the country avoid a sovereign default.
Pakistan is now seeking a new long-term Extended Fund Facility after the current standby arrangement expires this month. In addition to discussing the possibility of entering into another IMF program, both sides also focused on consolidating the progress made in the past year and ensuring that Pakistan's economic growth continues on a positive trajectory. Sharif reaffirmed his government's commitment to reviving Pakistan's economy and putting it back on track.
The Finance Minister, Muhammad Aurangzeb, has stated that Pakistan could reach a staff-level agreement on the new program by early July. The country is seeking a loan over a period of at least three years to achieve macroeconomic stability and implement much-needed structural reforms. However, the exact size of the program has not been disclosed. This would be Pakistan's 24th IMF bailout, as the country is facing a chronic balance of payments crisis with a debt repayment of almost USD 24 billion over the next fiscal year - three times more than its foreign currency reserves.
The meeting between Prime Minister Sharif and Georgieva was their first since his re-election last month. They last met in Paris in 2023 during the Summit for New Global Financial Pact. The IMF Executive Board is expected to meet on Monday to decide on the final tranche of USD 1.1 billion under the current standby arrangement.
Georgieva commended Sharif for successfully securing the standby arrangement last year and shared the IMF's perspective on the ongoing program with him. Sharif, on the other hand, informed the IMF MD about his government's efforts to carry out structural reforms, maintain fiscal discipline, and implement prudent policies to ensure macroeconomic stability and sustained economic growth.
In a separate event, Sharif highlighted the issue of global inequality in healthcare while participating in a panel discussion on 'Redefining Global Health Agenda' during the special meeting of the World Economic Forum. He emphasized that the Covid-19 pandemic has exposed these imbalances and gaps, especially in terms of vaccine distribution between the global North and South.
He also mentioned the impact of climate change on Pakistan and how it has caused devastating floods and forced the country to invest a considerable amount of money in rehabilitation efforts. Despite being a low emitter of greenhouse gases, Pakistan is still on the red list for climate change. This was Sharif's second visit to Saudi Arabia in less than a month, as he had previously visited the kingdom for three days - his first foreign trip since being re-elected as Prime Minister.
During the World Economic Forum, Sharif also met with the President of the Islamic Development Bank, Muhammad Sulaiman Al Jasser. They both agreed to expedite the completion of ongoing projects of the IDB in Pakistan. The Prime Minister expressed his appreciation for the bank's investment of USD 1 billion in various projects during the previous tenure of the Pakistan Muslim League-Nawaz (PML-N) government.
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