Key allies assure govt of support to shore up economy

ISLAMABAD: Pakistan’s key diplomatic allies have begun discussions with the new government’s economic team to foster bilateral and multilateral economic and financial cooperation.

European Union Ambassador to Pakistan Dr Riina Kionka, US and China’s envoys Donald Blome and Jiang Zaidong met Finance Minister Muhammad Aurangzeb in the last four days.

The three envoys met the finance minister at a time when Pakistan was busy reaching a Staff-Level Agreement with the International Monetary Fund to secure the release of the final tranche of $1.1 billion under the current $3bn Stand-By Arrangement (SBA).

Official announcements issued after the meetings confirmed support from the three countries in various areas.

The ambassadors welcomed the appointment of Mr Aurangzeb as finance minister and assured their country’s support in financial and economic relations.

Meanwhile, the European Union’s delegation in Islamabad had earlier clarified that it had not received any formal communication from the PTI regarding the GSP+ status currently held by Pakistan. The PML-N government accused the PTI of writing a letter to the EU to change Pakistan’s status of GSP+. This accusation was also rejected by the PTI.

In this context, the meeting of the EU ambassador with the finance minister was a crucial step towards dispelling the negative impression left by the PMLN leader on the GSP+ status.

At the same time, the meeting with US Ambassador Donald Blome is extremely significant. Pakistan might require US assistance for the next long-term loan arrangement with the IMF. The government is concerned that the PTI has issued a letter to the IMF, which may cause difficulties for the government in entering the accord.

Mr Aurangzeb in a meeting with the US ambassador reiterated his government’s commitment to completing the ongoing IMF programme and continuing the economic reform process initiated under the Extended Fund Facility 2019 and the SBA, with a focus on achieving fiscal and debt sustainability, social protection, and rebuilding foreign exchange reserves.

He outlined the government’s foremost priority of bringing reforms in the Federal Board of Revenue to prevent revenue leakages through end-to-end digitisation, enhancing the state-owned enterprise reforms, strengthening social protection measures, improving public financial management, implementing energy sector reforms, removing distortionary subsidies, and fostering private sector-led economic growth.

During a meeting with the Chinese ambassador, the finance minister expressed gratitude to the Chinese leadership for their invaluable assistance to Pakistan in a variety of sectors, highlighting the rollover of SAFE deposits and the refinancing of commercial loans, which have significantly contributed to Pakistan’s economic stability.

UAE’s ambassador to Pakistan Hamad Obaid Ibrahim Salim Alzaabi also met Mr Aurangzeb and discussed matters regarding bilateral relations and economic cooperation between Pakistan and the UAE.