WASHINGTON (AFP) – Pakistan has begun talks with the IMF over a new multibillion-dollar loan deal to support its economic reform program, its new finance minister told AFP on Monday.
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The South Asian nation is nearing the end of a nine-month $3 billion loan program with the International Monetary Fund designed to deal with a balance of payments crisis that brought it to the brink of default last summer. ing.
Pakistan has begun negotiations on a new multi-year IMF loan program worth billions of dollars, with the final $1.1 billion part of the deal expected to be approved later this month, Finance Minister Mohammad Aurangzeb said in an interview in Washington. Ta.
“Market confidence, market sentiment has been much better this year,” said Aurangzeb, a former banker who took over last month.
“To that end, this week we have begun discussions with the Foundation to participate in a larger and expanded program,” he added.
An IMF spokesperson told AFP that the IMF is “currently focused on completing the current Standby Agreement program,” referring to the completion of a nine-month continuing program that is expected to be completed soon.
“The new government has expressed interest in the new program and Fund staff are ready to engage in early discussions on a successor program,” the spokesperson added.
“3-year program”
During his visit to Washington, Aurangzeb has two clear objectives: to help countries fight climate change and to help the world's most indebted countries, with the IMF and World Bank meeting starting in earnest on Tuesday. He also plans to attend the sponsored spring meeting.
The meeting brings together central bankers, finance and development ministers, academics, and representatives from the private sector and civil society to discuss the current state of the global economy and begins with the IMF publishing its latest global economic outlook. .
Elections were held in Pakistan in February this year, but opposition leader Imran Khan was imprisoned and banned from running, and his party, Pakistan Tehreek-e-Insaf (PTI), became the target of a crackdown. And it was ruined by allegations of fraud.
A shaky coalition led by Shehbaz Sharif has emerged, now tasked with implementing a number of unpopular austerity measures to turn the economy around.
“I think we will require at least a three-year program,” Aurangzeb said. “Because that is what we need to help implement the structural reform agenda.”
“I think by the time we get to the second or third week of May we'll start to see the contours of that discussion,” he added.
Balancing the US-China conflict
Pakistan has close economic ties with both the United States and China, putting it in a difficult position as the two countries embark on a costly trade war.
Asked how Sharif's government plans to manage trade relations with the world's two largest economies, Aurangzeb said: “From our point of view, it has to be an and-and discussion.” .
”[The] “The United States is our biggest trading partner, has always supported us, has always helped us in terms of investments,” he said, “so this relationship will always be a very, very important relationship for Pakistan.” said.
“Meanwhile, a lot of investments, especially in infrastructure, have been made through CPEC,” he said, referring to the approximately 1,860-mile China-Pakistan Economic Corridor, designed to provide China with access to the Arabian Sea. ” he said.
Aurangzeb said there was a “very good opportunity” for Pakistan to play a role in the trade war, similar to countries such as Vietnam, which were able to dramatically increase exports to the United States after tariffs were imposed on some Chinese products. Stated.
“We already have some examples of it working,” he said. “But what we have to do is actually scale it up.”
reform program
Pakistan is in the midst of a privatization drive to sell off underperforming state-owned enterprises (state-owned enterprises) as part of a structural reform program agreed to by the previous government.
The first state-owned company on the list is Pakistan International Airlines, the country's flag carrier.
“We will know about the interest of potential bidders in the next month or so,” Aurangzeb said.
He added: “Our hope is to see the privatization through and reach the finish line by the end of June.”
If PIA privatization is successful for the government, other companies may soon follow suit.
“We're building out the entire pipeline,” he said, adding, “We want to really accelerate that over the next few years.”
© 2024 AFP
