Islamabad negotiating with the International Monetary Fund to avoid default
The debt is the Sharif government’s top priority. Meanwhile, street protests by the opposition led by former Prime Minister Imran Khan continue. Another ceasefire was reached with the Pakistani Taliban, but no long-term solution is on the horizons.
Islamabad (AsiaNews/Agencies) – The Pakistani government has been unable to secure financing through the bond market or foreign commercial banks, which makes an agreement with the International Monetary Fund (IMF) even more important, this according to Pakistani Finance Minister Miftah Ismail
“Saudi Arabia and other countries are all ready to give money, but all of them say we need to go to the IMF first,” Ismail said last Saturday. According to the Ministry of Finance, Pakistan needs about US$ 37 billion for the new fiscal year starting next month.
Former minister Imran Khan cut and froze fuel prices, going against IMF recommendations, which consequently put on hold a US$ 6 billion bailout plan.
The new prime minister, Shehbaz Sharif, who took office in April after a motion of no confidence against Khan’s administration, raised fuel prices, banned luxury imports, and increased borrowing costs in an attempt to meet IMF demands and replenish the state coffers with foreign funds to avoid a Sri Lankan-style financial crisis.
Saving the country from bankruptcy is the main concern for the government now led by the Pakistan Muslim League-N (Nawaz), which took office after Parliament last month voted in favour of a motion of no-confidence towards Imran Khan.
According to some analysts, Khan, a former cricket champion, lost the support of the Pakistani military and intelligence services, the real powerbrokers when it comes to the country's foreign policy.
However, the former prime minister and leader of the Pakistan Tehreek-e-Insaf (Pakistan Movement for Justice, PTI) appears unwilling to let go.
Before his defeat in parliament, he claimed that the United States wanted to get rid of him. Once out of power, he urged his supporters to take to the streets and march against the new government.
On 25 May, the PTI held an Azadi (freedom) march, a repeat of similar action it undertook against the PML-N in 2014. During the rally, Khan issued an ultimatum demanding the government call an election within six days.
Following the march, during which his supporters clashed with police, Khan did not carry out the sit-in planned for the same day, surprising both friends and foes; instead, all of a sudden, he put an end to the protest.
According to the Pakistani daily Dawn, leading Pakistanis worked behind the scenes to prevent the situation from degenerating; they include a former Supreme Court chief justice, an important businessman, and a retired general.
Such backroom dealings are said to have convinced the PTI leader to end the protests in exchange of a pledge the provincial assemblies would be dissolved in June and elections called.
The saga however is not over. Khan recently turned to the Supreme Court for permission to hold a new march on Islamabad. A date has not yet been set, but despite the lack of political support, the former cricket champion seems prepared to pursue his fight in the streets.
Meanwhile, the government has continued to negotiate with Pakistani Taliban (Tehrik-i-Taliban Pakistan, TTP) to achieve another ceasefire to last until mid-June. The TTP’s "Afghan cousins" recently facilitated a series of talks, which, for experts, are however a failure.
The stumbling block is the same: The Pakistani government cannot accept the TTP’s demands, namely the imposition of the Shari'a (Islamic law) in some areas of the country, reversing the merger of tribal areas with Khyber Pakhtunkhwa province and the withdrawal of government troops from the former Federally Administered Tribal Areas (FATA).
For the government, making such concessions is tantamount to surrendering tribal areas on the border with Afghanistan to the Pakistani Taliban, whose ultimate goal is setting up an Afghan-style emirate.
According to United Nations, the TTP carried out 40 attacks in Pakistan last year alone, killing almost 80 people.
At present, except for the renewed ceasefire, no other long-term solution has yet been found for the pacification of the area.