Pakistan’s finance minister Ishaq Dar has cancelled his visit to the United States where he was due to meet with the International Monetary Fund (IMF) management in an attempt to revive the stalled bailout package. Sources suggest that political uncertainty and developing judicial crises have led to the decision to cancel the trip. Dar had planned to address concerns regarding the continuity of the government, future economic plans, and bridging the trust deficit with multilateral lenders. Minister for Economic Affairs Sardar Ayaz Sadiq will also not be attending the World Bank-IMF spring meetings due to the prevailing uncertain political conditions. This comes at a crucial time as Pakistan was hoping to raise $6 billion in additional loans to meet the last IMF condition.
The cancellation of Dar’s trip could lead to the cancellation of meetings with his Saudi Arabia counterpart and the UK state minister for development. Instead, Finance Secretary Hamed Yaqoob Sheikh and Economic Affairs Secretary Kazim Niaz will represent the government at the WB-IMF spring meetings. Although a secretary was considered equal to a deputy minister, they might still be able to meet some of the high-ranking foreign officials.
Special Assistant to the Prime Minister on Finance Tariq Bajwa might replace Dar. However, due to diplomatic protocol issues, the PM’s special assistant is lower in rank and might not be able to meet with the presidents of various multilateral institutions and finance ministers of different countries. Dar had scheduled meetings with the presidents of the World Bank, Asian Development Bank, and Asian Infrastructure Investment Bank – the three multilateral creditors that were crucial for Pakistan’s plans to raise $6 billion in additional loans to meet the last IMF condition.
Pakistan’s financial condition has been deteriorating, with a whopping Rs276 billion shortfall in tax collection during the first nine months of the fiscal year. The finance ministry had also lined up meetings with the representatives of the foreign commercial banks aimed at convincing them to provide commercial loans to meet the external financing requirements.
Overall, the cancellation of the finance minister’s trip is a significant setback for Pakistan, which is currently in dire need of financial assistance to revive its economy. The cancellation could delay the revival of the stalled bailout package and put additional pressure on Pakistan’s already struggling economy.