IMF refuses talks with financial crisis-hit Pakistan on restoring 11.3-bn-dollar package

Islamabad, Feb 01(ANI): Amid the snowballing financial crisis in Pakistan, the International Monetary Fund (IMF) has refused to send a mission to the country for talks on restoring the 11.3-billion-dollar bailout package.

The IMF took the decision after Islamabad failed to hold out a firm commitment to implement tax and power sector reforms.

A pre-review IMF mission, led by its Director for the Middle East and Central Asia Department, Masood Ahmed, held separate meetings with President Asif Ali Zardari, Prime Minister Yousaf Raza Gilani and Finance Minister Dr Abdul Hafeez Shaikh.

"After getting negative signals at the highest level, the IMF delegation refused to send a mission for talks with Islamabad," a finance ministry official told The Express Tribune on the condition of anonymity.

The delegation said that mission-level talks would only be held if the Reformed General Sales Tax (RGST) was levied from March 1 and fiscal slippages were controlled.

However, the Pakistan government, which is sandwiched between the IMF, pressing for implementation of economic reforms - and other political parties warning it against taking unpopular decisions under the IMF's diktat, insisted that the implementation should be delayed till July.

The IMF had suspended the bailout package in July 2010 after Islamabad failed to deliver on its promises of levying the RGST a second time. Although the organisation extended the programme till September this year, it has refused to release the sixth tranche of 1.7 billion dollars.

It is noteworthy that US President Barack Obama's senior adviser David Lipton had also visited Islamabad last week to urge the Pakistan government to carry forward the reforms agenda.

"Pakistan had pinned high hopes on President Barack Obama's senior adviser David Lipton, but he, too, asked the government to implement economic reforms," said another finance ministry official who attended the talks.

Meanwhile, Pakistan's Finance Ministry refused to comment on the development, terming it merely as "internal talks". (ANI)