A media report indicated on Wednesday that the USD 3 billion IMF bailout package for Pakistan might be in jeopardy if the caretaker government’s term is extended owing to the likelihood that the staging of general elections in the cash-strapped nation would be delayed.
In June, the IMF and Pakistan came to terms on a nine-month Stand-by Arrangement (SBA) in the sum of SDR 2,250 million (about $3 billion).
Elections in Pakistan may be delayed for more than three months since a delimitation exercise would be conducted once the Council of Common Interests (CCI) approves the first-ever digital population census, according to The News.
While the delimitation procedure takes four months, the election process takes an additional two months to complete.
The caretaker regime’s term may need to be extended under the current conditions by at least six months in order to complete the political transition, according to the publication.
The new Circular Debt Management Plan (CDMP), which will be shared with the International Monetary Fund (IMF) after receiving permission from the federal cabinet, has been accepted by the Cabinet Committee on Energy (CCOE), according to the report.
The study said that it is still unclear how the IMF would react to the new CDMP on the intended goals.
According to the report, it was planned that the $3 billion Standby Arrangement (SBA) program would be completed across the terms of three separate administrations.
During the administration of the departing Pakistan Democratic Movement-led government, the first installment of 1.2 billion USD was made available.
According to the article, it was anticipated that the first assessment would be conducted using data from the first quarter of the economy, which ran from July to September, with the likelihood that the Fund would send a review mission to Islamabad in the third week of October.
The IMF Board may decide to approve a second tranche of USD 700 million in December 2023 if all goals are achieved, it added.
Additionally, it was anticipated that the SBA program would be completed in March or April 2024 and that the second review may be conducted in February 2024.
The caretaker government may be responsible for achieving all structural benchmarks, performance criteria, and indicative targets if the caretaker setup’s tenure is extended, and the IMF mission may be strictly tasked with keeping track of all important goals.
In accordance with Section 230, a caretaker (interim) government may only carry out those duties that are essential to managing the day-to-day operations of the government.
According to earlier media reports, the Shehbaz Sharif administration was thinking about amending Section 230 of the Elections Act of 2017 to give the caretaker administration the authority to make economic decisions. The amendments might be introduced in the National Assembly to give the caretaker administration the authority to make decisions required to revivify the economy.
The lower chamber of Parliament, which consists of 342 people, is set to have its five-year term end on August 12.
Today, the Sharif administration is anticipated to suggest dissolving the National Assembly and holding new elections.
According to the research, in order to eliminate Pakistan’s risks related to the repayment of foreign loans and graduate from the current IMF program and qualify for one beyond March/April 2024, complete execution of the SBA program is required.
