Pakistan’s claim that its program conditions were a contributing factor to the postponement of elections in Punjab on Thursday was rejected by the International Monetary Fund (IMF), which stated Islamabad had the right to reprioritize expenditures or raise extra taxes to meet constitutional obligations in order to meet its obligations.
There is no requirement under Pakistan’s EFF [Extended Fund Facility]-supported program that could interfere with Pakistan’s ability to carry out constitutional activities under its constitution, the lender’s Resident Representative Esther Perez Ruiz said.
As part of her response, she hinted at the lender’s strong insistence on staying out of domestic politics, pointing out that the country’s institutions were the only ones who were capable of making decisions regarding the constitutionality, feasibility, and timing of the provincial and general elections.
Furthermore, she said that, “The IMF sets aggregate general government targets (aggregating across federal and provincial levels of government), within these targets, there is fiscal space to allocate or reprioritize spending and/or raise additional revenues to ensure constitutional activities are carried out in accordance with the law”.
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As a result, the Election Commission of Pakistan (ECP) has announced that elections in Punjab will have to be postponed. 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 beyond the scope of the $6.5 billion bailout package, refusing to support the coalition government’s narrative as it struggles to stay in power, refuting Pakistan’s claim that it interfered in matters outside of the scope of the bailout package.
As a result of Ruiz’s response it seems 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 also blaming the international lender for its own economic problems.
As far as the IMF program discussions have been concerned, the primary focus has been on economic policies to solve Pakistan’s economic and balance of payments problems, in accordance with its mandate, which is to promote macroeconomic and financial stability in the country. In spite of this, talks between Pakistan and the IMF remain dogged by a number of communication lapses and delays and unwarranted narrative-building stunts.