Pakistan seeks Europe’s help to secure IMF loan | Eurasia Diary -

23 May, Thursday

Pakistan seeks Europe’s help to secure IMF loan

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Pakistan has sought help from European countries to ensure smooth sailing during talks at the International Monetary Fund (IMF) Board for securing a bailout package and recovering ‘stolen’ assets, presumably stashed in the European states, including Switzerland.

The request for help was made by Finance Minister Asad Umar during an interaction with ambassadors of some 15 European nations. The interaction took place at the Board of Investment (BOI) and was also attended by BOI Chairman Haroon Sharif and Advisor to Prime Minister on Commerce Abdul Razak Dawood.

The interaction was also aimed at conveying to the European capitals that Pakistan was open to doing business with the developed world, as the incumbent government’s tilt has so far remained towards China and the Middle East.

It was the first such high-level interaction by Pakistan’s economic managers with the European ambassadors. Before that Prime Minister Imran Khan had visited Saudi Arabia twice, besides going to China last month.

“Pakistan has communicated the message that it is open to all countries for investment and would provide level-playing field to all,” said Sharif, the BOI Chairman, while talking to The Express Tribune. He said Pakistan looked forward to European investment and technology.

Moreover, Finance Minister Umar has appreciated the UK response to Pakistan’s request for legal assistance in recovering assets acquired through illegal means.

However, Umar said Switzerland was not forthcoming in discussing issues related to the provision of mutual legal assistance, sources told The Express Tribune. He sought support from the envoys in this regard, but the Swiss ambassador was not present in the meeting.

The interaction with the envoys took place a day before the start of policy-level talks with the IMF team which is in town to negotiate a bailout package. IMF’s Washington-based Mission Chief Harald Finger on Monday joined the talks on the last day of the technical round.

The European Union has four members in the IMF Board and their vote will be critical in view of the United States’ apparent opposition. Umar also briefed the European envoys about actions his government has so far taken to put the economy on track.

The European ambassadors asked questions about Pakistan’s strategy to deal with the IMF, the loans it is expecting from the friendly countries, and implications regarding the second phase of the Free Trade Agreement with China, said the sources privy to the discussions at the meeting.

The envoys conveyed that Pakistani businesses had expressed apprehensions about an adverse impact of the FTA with China.

At least two ambassadors questioned Pakistan’s strategy to deal with the IMF as they were of the view that Pakistan should have waited for the right time before devaluing its currency and increasing utility prices, said the sources.

“Our government is acting in the interest of the country with an aim to take the ownership of these reforms instead of throwing responsibility on the IMF,” Umar said while replying to them.

He then informed the ambassadors that Pakistan wanted to get the IMF package to implement reforms and to provide a sense of satisfaction to global and local investors. He informed the envoys that Pakistan would soon receive $1 billion out of the $3 billion committed by Saudi Arabia.

Umar also told the ambassadors that talks were underway with China and the United Arab Emirates for a bailout package.

Dawood, the PM’s adviser, is said to have told the ambassadors that China had assured doubling Pakistan’s exports, but he admitted it was difficult for Pakistan to avail this facility due to lack of exportable surplus.

There was, however, no mention of any immediate direct cash assistance from China, said the sources.

Instead of highlighting the opportunities that can be offered to the European capitals, the adviser focused more on the challenges and issues being faced by Pakistan on the trade front.

The BOI chairman, meanwhile, urged the European envoys to invest in Pakistan as their investment had been falling for the last five years, except in 2015-16, when a European company bought stakes in EngroFoods. Compared to this, the European investment was going up in Bangladesh, he noted.

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