Pakistan, IMF Fail to Reach Deal; Talks Continue

Facts

• After ten days of face-to-face negotiations, Pakistan and the International Monetary Fund (IMF) failed to reach a deal over the release of $1.1B in financial aid, with talks set to resume virtually on Monday.¹
• The IMF negotiations are aimed at freeing the $1.1B installment of a $6.5B financial bailout organized in 2019 that has stalled since December due to what Pakistani finance minister Ishaq Dar called 'routine procedures.'²
• Pakistan has been battling an economic meltdown as the value of the rupee plummets, and the $350B economy is still reeling from last year's floods, with the government estimating the rebuilding efforts will cost $16B.¹
• Pakistan says it's working to resolve outstanding issues and address a list of steps given by the IMF in order to reach an agreement, including its decision last month to increase petroleum prices to an all-time high and cease controlling the exchange rate, in accordance with previous reform commitments.³
• To receive the IMF bailout, the agreement also includes revenue collection and phasing out untargeted subsidies. Dar has said that Pakistan is 'committed' to implementing any conditions agreed upon.²
• Pakistan has undergone 23 loan programs with the IMF since the country became a member of the body in 1950, including having sought bailouts at least 13 times since the 1980s, despite failing to carry through required reforms.³

Sources: ¹Reuters, ²Al Jazeera and ³Voa.

Narratives

• Narrative A, as provided by Washington post. Though negotiations have taken some time, Pakistan is facing a serious financial crisis and is in dire need of IMF funding. As talks have been delayed, Pakistan has also attempted to obtain outside funding from Gulf states, but they, too, have paused their aid until the IMF deal closes. Pakistan has already implemented many of the IMF's requests, and it's time for them to uphold their end of the bargain.
• Narrative B, as provided by Business insider. Pakistan has brought these delayed negotiations upon itself. The nation that has long relied on a debt economy while recklessly spending on populist and militaristic policies is now surprised that the IMF is skeptical about giving it more money. Islamabad is in a bind because it refuses to break away from its historically bad habits.