In October, an IMF mission was due to visit Pakistan to resume the second review of the $6 billion Extended Fund Facility agreed in July 2019, which had been delayed due to the Covid-19 pandemic (see Observer Spring 2020). Yet, the mission was indefinitely postponed over the refusal of Prime Minister Imran Khan to implement specific reforms tied to the programme, which the Fund is requiring as ‘prior actions’ before talks can resume.
The Pakistan-based newspaper The Express Tribune reported in October that Abdul Shaikh, economic advisor to the prime minister, “was of the view that additional measures could push more people into poverty.” After the current government faced major demonstrations over the constantly increasing cost of living in 2019, the newspaper reported that Shaikh had told IMF Managing Director Kristalina Georgieva, “that Pakistan was not in an election mode and the government was seeking postponement…purely on human grounds.”
The contentious measures include power sector reforms that would increase electricity tariffs and significant regressive consumer tax hikes (see Observer Winter 2020). Bilquis Tahira with Pakistan-based civil society organisation Shirakat – Partnership for Development, commented, “the IMF must commit itself to upholding international commitments on human rights. People must come first in all fiscal negotiations. We support our government in its stance on considering IMF loan impacts on the have-nots.”
As the IMF talks stall, the country remains under serious economic pressure, exacerbated after Saudi Arabia demanded a $1 billion loan repayment and froze an oil credit facility worth more than $3 billion in August.