KARACHI: As finance minister Ishaq Dar left for Washington on Tuesday to hold talks with the International Monetary Fund (IMF) and the World Bank, Pakistani experts said they hoped the South Asian nation would convince multilateral donors to expedite financing and relax conditionalities amid widespread devastation from recent floods.

Dar leaves for DC amid an unprecedented economic crisis, with Pakistan grappling with mounting inflation, depleting forex reserves, an increasing trade deficit, and over $30 billion in damages caused by cataclysmic floods that have killed over 1,700 people and left 33 million scrambling for survival.

In response to an emergency relief call from the United Nations, the country now expects to receive around $4 billion from multilateral donors, including $1.5 billion from the Asian Development Bank (ADB) and $0.5 billion from the Asian Infrastructure Investment Bank (AIIB) by the end of current month.

Pakistan is also expecting around $1 billion from the UN and $1 billion from the World Bank by December this year. The World Bank’s commitment is dependent on the completion of conditionalities, according to a central bank briefing on Monday.

On Tuesday, Pakistani experts said Dar’s top task in DC was convincing multilateral donors to disburse their commitments.

“Pakistani authorities must be able to convince multilaterals of an expedited [loan] program and project financing,” Dr. Khaqan Najeeb, a former finance ministry adviser, told Arab News.

“In addition, authorities [while in DC] should work to refinance a $1 billion bond, which is due in 2022, rollover or reschedule existing facilities of $7 billion with bilateral partners, access concessional facilities and ensure commercial rollovers.”

Dar’s Washington visit to attend the annual meeting of the World Bank and IMF comes ahead of the 9th review of a $7 billion loan program from the IMF, that is due on October 25, 2022.

Before leaving for Washington, Dar had assuaged spooky investors by saying the government would fully honor its commitments made with the IMF and other creditors.

“We will honor our commitments no matter what, irrespective of the government who made the agreements. Pakistan is an independent and sovereign state and the current government under the leadership of Prime Minister Shehbaz Sharif is fully determined to protect and maintain its national sovereignty and integrity,” Dar told journalists on Saturday at a press conference.

Pakistan, a member of the IMF since 1950, went to the fund for the first time in 1958. Since then the country has signed some 23 agreements, with all ending prematurely, except one.

Pakistani analysts are hopeful of the success of the Dar’s visit in securing some solid commitments from multilateral donors amid the widespread destruction caused by floods.

“The finance minister is expected to talk on relaxation of IMF conditionalities in the backdrop of floods damages for the next review,” Tahir Abbas, the head of research at Arif Habib Limited, a brokerage firm, said.

“In addition, Dar is expected to hold talks with the World Bank for additional funding. I think Dar will be able to secure additional funding after completion of some modalities and will get relaxation from the IMF keeping in view the ground realities after floods.”

Khaqan, agreeing with Abbas, said: “All important aspects related to ensuring stability in Pakistan’s Balance of Payments challenge would hopefully see some progress in Washington.”

Although the full impact of flood damages is yet to be known, the South Asian economy has started decelerating, with Moody’s lowering its real economic growth to 0-1 percent for fiscal 2023 from a pre-flood estimate of 3-4 percent while the World Bank and Pakistan’s central bank forecasts stand at 2 percent and 3 percent respectively.

Given this, Pakistani experts stress revising the macro-framework and continued engagement with the IMF.

 “Pakistan must continue with the IMF as an anchor for its stamp of approval and accessing funds under the program,” Khaqan said. “But what has become necessary is to finalize a revised macro-framework to form the basis for further negotiations with the IMF.”