The long-awaited Staff Level Agreement (SLA) between Pakistan and the International Monetary Fund (IMF) will be signed only after the Kingdom of Saudi Arabia and the United Arab Emirates confirm financing support in the days to come.
SLA will be signed with the IMF as soon as the lender receives confirmation of support from the KSA and UAE, according to TheNews.
There have been opposing views within the Ministry of Finance on the issue of cross-fuel subsidies, owing to the timing of the announcement. It is unclear how the Ministry of Finance will pacify the IMF on the subsidy. Some factions of the government fought the scheme to avert any fallout with the lender, but the government went ahead and made it public.
Some officials have pointed out that such schemes cannot be implemented in light of the IMF’s well-documented opposition to subsidies. At this point, the IMF program must be revived, and such schemes would jeopardize the entire process. They also stated that they were unaware of any progress on the controversial fuel subsidy at this time.
Interestingly, Finance Minister Ishaq Dar told diplomats in Islamabad on Sunday that issues with the IMF would be resolved soon. Almost 46 days have passed since the IMF and Pakistan concluded review talks in Islamabad on February 9. After almost 7 weeks, talks still remain inconclusive.
In any case, if the IMF program is revived, the question of how future reviews will be completed will spring up. The tenth review was scheduled for February 3, 2023. While the 11th review is due on May 3, 2023, it is unclear how both parties will proceed even after the Fund program is revived.