Finance Minister Shaukat Tarin said that military cooperation with the United States on the US withdrawal from Afghanistan had given the Imran Khan government “some space” to delay unpopular IMF reforms, reported Financial Times on Thursday.
According to the newspaper, Islamabad is in talks with the IMF to release the next tranche of financing as part of a $ 6 billion loan program as Pakistan struggles to control inflation and recover from the impact of the pandemic.
“Officials are seeking US support in the form of financial backing from the Washington-based international financial institution in exchange for helping President Joe Biden withdraw all US troops before 9/11 and bring the Taliban to the table of talks,” it reported.
Shaukat Tarin, Khan’s fourth finance minister in three years, said the IMF had been receptive to Islamabad’s request to postpone the increase in electricity rates and sales taxes that have hit Pakistan’s poor hard, the newspaper added.
“What we don’t need is more burden on our poor people,” Tarin said, adding that American officials are “ready to help”.
Tarin, who took office in April, returned to office after negotiating an IMF bailout in 2008, when US-Pakistan cooperation was at its peak.
“In 2008, we obviously had the United States and everyone else on my side because of the war on terror. . . Today things are different, ”said Tarin as quoted by FT.
Tarin said the resumption of a US military training program with Pakistan indicates that the relationship is heating up. He also said the World Bank was expected to approve at least $ 800 million in new loans by the end of the month.
Pakistan’s poor have been hit by double-digit inflation and their discontent with the economy is a political burden on the Khan government.
“The [economic] this year’s growth will probably be 4 percent, but we need more, ”Tarin said.
Pakistan had made progress in addressing its financial challenges, but the fallout from the pandemic and political turmoil runs the risk of derailing the reform agenda, rating agency Fitch said last month, keeping its outlook on Pakistan stable at B-.
Islamabad has been able to access external financing in part due to its compliance with the IMF program and its progress in addressing terrorist financing.