IMF to release second tranche of $450m in December

The International Monetary Fund seal is seen April 5, 2007, along Pennsylvania Avenue in Washington, DC. (AFP/File)
Updated 18 November 2019

IMF to release second tranche of $450m in December

  • The money will be released after the approval of the IMF board of directors, says the fund’s top official in Pakistan
  • The country secured $10 billion financial assistance from Saudi Arabia and the UAE to avert balance of payments crisis before signing the IMF deal

ISLAMABAD: The International Monetary Fund (IMF) is expected to release the second tranche of $450 million to Pakistan after the approval of its board of directors next month.
The fund completed its first quarterly review under the $6 billion bailout program during its delegation’s visit to Islamabad from Oct. 28 to Nov. 8, and will now submit its report to the board of directors to get its endorsement before releasing the second tranche.
“The release of the second tranche will take place once the first review under the IMF-supported program is approved by the IMF Board of Directors,” Teresa Daban Sanchez, IMF Resident Representative in Pakistan, told Arab News on Monday.
She said that a calendar of the reviews is explicitly mentioned in the program documents and “the first one is tentatively scheduled for the first part of December.”
Pakistan secured the $6 billion loan from the IMF in July this year – its 13th bailout program since the late 1980s – to stave off a balance of payments crisis. The IMF had granted the loan by imposing tough conditions including massive economic reforms and significant improvement in annual tax collection.
The government of Prime Minister Imran Khan, who took power in August, obtained temporary relief from close allies such as Saudi Arabia, the United Arab Emirates and China with short-term loans worth more than $10 billion to buffer foreign currency reserves and ease pressures on the country’s current account. Economists, however, called an IMF bailout inevitable as Pakistan faced growing fiscal crunch.
The fund has now expressed satisfaction over the economic performance of the country as the government has significantly narrowed trade and fiscal deficits.
“The government policies have started to bear fruit, helping to reserve the buildup of vulnerabilities and restore economic stability. The external and fiscal deficits are narrowing, inflation is expected to decline and growth although slow, remains positive,” the IMF said in a statement after completion of the first review.
Pakistan had already received an upfront disbursement of $991 million on the completion of all prior actions before signing the fund program in July. The inflow of the second tranche would help boost the country’s foreign exchange reserves which were recently recorded at $15.5 billion.
Pakistan’s foreign exchange reserves have increased by $1.2 billion to $8.4 billion of reserves with the State Bank of Pakistan in four months (July to October) of the current fiscal year. Likewise, the government has paid $2.1 billion against previous loans during the same period.


PMLN awaits full court ruling before moving on legislation for army chief extension

Updated 08 December 2019

PMLN awaits full court ruling before moving on legislation for army chief extension

  • In short order last month, Supreme Court gave the government six months to legally justify a three-year extension
  • Ruling has given rise to debate about whether the government needs to pass an act of parliament or a constitutional amendment

KARACHI: A senior member of Pakistan’s main opposition party said on Sunday the party would wait for a detailed court ruling before deciding on its plan of action with regards to legislation that would allow the government of Prime Minister Imran Khan to grant another term of office to the army chief.
Khan had said in August that he needed General Qamar Javed Bajwa to stay on for another three years because of ongoing security concerns, including heightened tensions with India over the disputed Kashmir region.
But last month, Pakistan’s Supreme Court suspended the extension, citing a series of irregularities and ordering the government and the army to produce legal provisions to support the reasoning behind the move.
After days of legal wrangling, the top court conditionally extended the army chief’s term on November 28 but ruled that the government had six months to justify why it granted the controversial extension and to clarify the section of Pakistan’s constitution governing the armed forces.
The ruling came as a short order. A full verdict is still awaited and has given rise to debate about whether the government would be able to grant the extension by passing an act of parliament or be required to push through a constitutional amendment, which requires a two-thirds majority in parliament. 
On Saturday, a group of Pakistan Muslim League-Nawaz (PMLN) leaders held a meeting with party president Shehbaz Sharif in London to discuss the party’s plan of action following the Supreme court’s order.
“The PML-N leadership [has] decided to wait for [the] detailed judgment of the Supreme Court and to consult other opposition parties for a joint opposition position on this issue,” PML-N Secretary General Ahsan Iqbal, who was part of the huddle, told Arab News.
PML-N senator Mushahidullah Khan said he believed the Supreme Court’s detailed judgment would make it clear that the Pakistan Tehreek-e-Insaf (PTI) government was required to pass a constitutional amendment rather than simply an act of parliament.
“In the case of the constitutional amendment, the PTI will not be in a position to pass the bill as it requires two-thirds majority from both houses of the parliament,” Khan said. Even in the case of an act, he said the ruling party lacked simple majority in the upper house, or Senate.
Hassaan Sabir, a Karachi based constitutional lawyer, also said the PTI government lacked the required strength to amend the constitution without the support of the opposition.
“If the government fails to get a two-thirds majority in any of the houses... the amendment will fail,” he said, adding that opposition support in the Senate would be necessary even to pass a simple act.
Meanwhile, participants of the London meeting also paid a visit to PML-N party supremo Nawaz Sharif at his London apartment. 
Sharif is in the UK for medical treatment after getting bail in a corruption conviction for which he was serving seven years in a Pakistani jail. 
PML-N party chairman Raja Zafrul Haq said it was highly likely that Sharif would have to be taken to the US for treatment.