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IMF denies tying bailout to compromise on Pakistan’s nuclear capability

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  • IMF Pakistan chief issues statement on delay in agreement.
  • Says Fund has not attached any strings as reported.
  • Talks focused on balance of payment issues, says Esther Perez.

ISLAMABAD: The International Monetary Fund (IMF) has rubbished claims that the multilateral lender had attached any nuclear-programme-related strings to the revival of a bailout stalled for months despite weeks-long talks between the two sides.

The lender is yet to approve the release of $1.1 billion originally due to be disbursed in November last year, leaving Pakistan with only enough foreign exchange reserves to cover one month’s imports.

Pakistan has been hosting an IMF mission since early February to negotiate the terms of the deal, including the adoption of policy measures to manage its fiscal deficit ahead of the annual budget due around June.

The funds are part of a $6.5 billion bailout package the IMF approved in 2019, which analysts say is critical if Pakistan is to avoid defaulting on external debt obligations.

Veteran politicians Senator Raza Rabbani and former foreign minister Shah Mahmood Qureshi had raised concerns about whether the delay in the staff-level agreement with the Fund has anything to do with the country’s strategic assets including the nuclear and missile programmes.

They have asked the government to come clear on this issue.

In a statement released to the media on Sunday, IMF resident representative in Islamabad Esther Perez Ruiz denied attaching any strings to the External Fund Facility (EFF).

“Regarding recent speculation that programme discussions with the authorities for the ninth review under the IMF-supported programme may have covered Pakistan’s nuclear weapons programme, I want to be categoric that there is absolutely no truth to this or any insinuated link between the past or current IMF supported programme and decision by any Pakistani government over its nuclear programme,” the official said.

The IMF chief further said that the discussions have exclusively focused on economic policies to solve Pakistan’s economic and balance of payments problems, in line with the Fund’s mandate for promoting macroeconomic and financial stability.

‘No compromise on nuclear, missile programme’

On Thursday, Finance Minister Ishaq Dar promised that there would be no compromise on the country’s nuclear and missile programme.

The finance minister made the statement in the Senate in response to Senator Raza Rabbani’s questions about the delay in signing the agreement with the IMF.

Rabbani regretted that the upper House of the Parliament had “neither before nor today been taken into confidence on what are the conditionalities of the IMF” for extending the loan facility to Pakistan. 

He had termed the delay “absolutely out of the ordinary, extraordinary” saying: “The question arises […] if the delay is being made because of some sort of pressure to be exerted on Pakistan’s nuclear [programme].”

In response, Ishaq Dar told the special session in categorical terms that there would be no compromise on the country’s nuclear and missile programmes. 

“Let me assure you that nobody is going to compromise anything on the nuclear or the missile programme of Pakistan… no way,” he had added. 

The minister promised the moment the staff-level agreement and EFFP (Extended Fund Facility programme) was finalised, it would be placed on the website of the finance ministry. 

He made it clear that nobody had any right to tell Pakistan what range of missiles it could have and what nuclear weapons it could possess. 

“We have to have our own deterrence, as we represent the people of Pakistan and we have to guard our national interests,” he maintained.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Discos report losses of Rs239 billion.

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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