IMF Rejects Pakistan’s Claim Linking Election Delay With Bailout Agenda

The International Monetary Fund (IMF) rejected Pakistan’s claim that its program conditions were one of the reasons for the postponement of elections in Punjab on Thursday, saying Islamabad had the right to reprioritize expenditure or raise additional taxes to meet constitutional obligations.

“There is no requirement under Pakistan’s EFF [Extended Fund Facility]-supported program, which could interfere with Pakistan’s ability to undertake constitutional activities,” the lender’s Resident Representative Esther Perez Ruiz said.

Her response also hinted at the lender’s strong insistence on keeping it out of domestic politics, reminding the government that “decisions regarding the constitutionality, feasibility, and timing of the provincial and general elections rest solely with Pakistan’s institutions”.

She also said, “The IMF sets aggregate general government targets (aggregating across federal and provincial government levels) and within these, there is fiscal space to allocate or reprioritize spending and/or raise additional revenues to ensure constitutional activities can take place as required”.

This statement comes after the Election Commission of Pakistan (ECP) announced to postpone elections in Punjab. For what it is worth, it is also for the second time in four days that the IMF has refuted Pakistan’s claim that it interfered in matters outside the scope of the $6.5 billion bailout package, refusing to support the coalition government’s narrative as it struggles to stay in power.

Ruiz’s response also implies that the trust gap between Pakistan and the IMF is widening as a result of Islamabad’s inability to meet its international and domestic constitutional obligations while trying to blame the global lender for its own setbacks.

The IMF program discussions have so far been solely focused on economic policies to solve Pakistan’s economic and balance of payments problems, in accordance with the global lender’s mandate to promote macroeconomic and financial stability. However, due to communication lapses/delays and unwarranted narrative-building stunts, talks between Pakistan and the IMF remain stalled.

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