Delayed bailout: Dawn

September 11, 2024

ISLAMABAD – IS Pakistan’s new bailout deal with the IMF in trouble? Is the Fund’s Executive Board deliberately stalling the approval of the $7bn Extended Fund Facility agreed between Islamabad and the IMF mission on July 15? Are there any geopolitical factors at play?

These are the thoughts that come to mind after Deputy Prime Minister Ishaq Dar’s fresh critique of the IMF amid delays in disbursement of the much-needed funds by the lender of last resort. Speaking at a Defence Day function in London, the minister mostly recounted his personal experiences of having worked with the Washington-based agency for the revival of a previous 2019 funding plan as the country’s finance czar.

In a way, Mr Dar questioned the intentions of the Fund towards Pakistan as he narrated how the agency had continued to stall its financing for eight months, despite completion of the programme review. The lender had eventually substituted that package with a short-term loan of $3bn to help Pakistan avert looming sovereign default last year, weeks before a caretaker administration was installed to hold elections.

While the unexpected delay in the new IMF programme’s approval is already causing anxiety in the markets, the timing of Mr Dar’s tirade against the lender is quite confusing. Whether or not it is linked to the current status of the new bailout, it will likely add to existing uncertainties around the early disbursement of fresh IMF funds. More so because the Fund, going by the information Finance Minister Muhammad Aurangzeb has divulged to the public in piecemeal fashion, seems to be consistently changing the goalposts.

Or should we assume that the government has yet to fully reveal the conditions agreed with it in the