July 6, 2023
ISLAMABAD – Prime Minister Shehbaz Sharif on Wednesday said he was hopeful that the $3 billion nine-month bailout from the International Monetary Fund (IMF) would be approved by the lender’s board when it meets on July 12.
“Because of Ishaq Dar and his team’s efforts, on July 12, God willing in the board meeting, I am hopeful that it will be approved,” the prime minister said at a ceremony commemorating 10 years since the China-Pakistan Economic Corridor (CPEC) began.
“The staff-level agreement has already been finalised,” he added.
The executive board of the IMF will meet on July 12 to review the $3 billion Stand-by Arrangement (SBA) for Pakistan, the staff-level pact for which was finalised last week.
Pakistan was absent from an earlier schedule released in June, igniting speculation that the IMF was not going to release funds from an earlier programme that expired on June 30.
On June 29, the IMF and Pakistan reached a stand-by arrangement (SBA) to ease the country’s financial crisis. The nine-month SBA, if approved, will bring $3bn, or 111pc of Pakistan’s IMF quota.
The board’s approvals are generally granted once a staff-level agreement (SLA) is done. The Pakistan government was expecting about $2.5bn from the IMF, but it was given $3bn. Pakistan had earlier cleared eight of the 11 listed programme reviews, with the ninth review pending since November last year.
The SBA, subject to the IMF board approval, offers much-needed relief to a country still grappling with a severe balance of payments crisis and declining foreign exchange reserves.
Meanwhile, Pakistan has submitted a letter of intent to the IMF, assuring the lender that no new tax amnesty will be introduced in the next nine months.
While addressing the ceremony, the premier stated that he was “grateful” to the IMF Managing Director, Kristalina Georgieva, and her team, adding that this was Pakistan’s opportunity to move toward progress.
The prime minister reiterated that unlike the previous government and their “delays” concerning the conditions put forth by the IMF, the SBA was a nine-month-long program and the government planned to complete it within the stipulated timeline.
He added that Pakistan was no longer under the threat of default. He said it was the government’s responsibility to rehabilitate the country’s economic conditions and to help it “stand on its feet”.
10-year anniversary
The premier congratulated the participants, which included Chinese Charge d’Affaires Pang Chunxue on the 10-year completion of the multibillion-dollar CPEC program which he said had gained momentum.
The premier said it was “unheard” of in Pakistan’s economic history over the years, adding that the development saw the landscape transform into one of the most productive not just in the region but in the world as well.
“We completed power plants run by coal, hydel power projects, Orange Line, road infrastructure […] this was a story of hard efforts,” the premier said.
According to the premier, Chinese investors invested $26.4bn through the CPEC program over the last ten years and he is hopeful that the program will now change direction toward business-to-business (B2B) development and create economic zones which foster production.
“We have to stabilise the economy. Help Pakistani people from the inflation,” he stated.
Later, he tweeted that CPEC was “a transformational project that has been pivotal to Pakistan’s socio-economic development”.
“The last 10 years is an inspirational story of how President Xi Jinping’s vision of ‘iron brotherhood’ converted into the completion of projects under the CPEC framework,” he said, also crediting PML-N supremo Nawaz Sharif for his “leadership role” in this regard.
However, he added, “in my view, we are still far from fully tapping the potential of CPEC, a worthy goal that has my personal and the government’s staunch commitment”.
Pakistan today celebrated the completion of the Decade of China-Pakistan Economic Corridor, a transformational project that has been pivotal to Pakistan's socio-economic development. The last 10 years is an inspirational story of how President Xi Jinping's vision of "Iron…
— Shehbaz Sharif (@CMShehbaz) July 5, 2023