PPP’s Raza Rabbani terms IMF’s meetings with political parties ‘erosion of political sovereignty’

PPP Senator Raza Rabbani has termed the International Monetary Fund’s (IMF) meetings with political parties in Pakistan ahead of its executive board’s approval for a $3 billion deal “an erosion of political sovereignty”.

Meanwhile, he said, the “financial sovereignty has already been surrendered”.

The minister’s remarks were quoted in a press release issued by the Senate on Saturday, a day after the IMF held meetings with the PPP and opposition PTI to seek assurances of their support for a $3bn standby arrangement, the staff-level pact for which was reached between the global lender and Islamabad last week as an older programme expired.

The meetings came almost a week before a meeting of the IMF executive board will review the $3 billion arrangement for Pakistan on July 12.

Commenting on the matter, Rabbani said: “Return of the East India Company, when notables were asked to support the company’s policies.”

He went on to question: “What will be the fate of political parties that support privatisation and retrenchment of workers? Will the election commission take exception to their manifestos?”

Earlier, economist Dr Ashfaque Hassan Khan, who has also advised the government in the past, told Dawn that the IMF team’s meetings with political parties were somewhat out of the ordinary.

He explained that before any programme, IMF officials typically met stakeholders, such as representatives of chambers, banks, and labour unions. “I don’t recall such [political] meetings,” he added.

However, others speculated that since the standby arrangement agreed with the IMF envisions elections being held this year, the Fund seems to be counting on negotiating a fresh programme with the incoming government, whoever forms it.

As for the IMF, it has been at pains in recent months to clarify that it does not favour any particular party over the other and will negotiate with whichever party forms the next government. Some observers feel that the lender’s meetings with political parties meetings should also be viewed in the same context.

Meanwhile, numerous analysts have also warned that the uncertain political climate in Pakistan may derail the IMF programme.

The coalition government’s term is set to end in a month, with a caretaker government taking over for three months to oversee the next general elections.

The meetings

The IMF’s meetings with the economic teams of the PPP and PTI were held yesterday after the global lender’s resident representative for Pakistan, Ester Perez Ruiz, said IMF staff was in the process of meeting with representatives of major political parties in Pakistan — including PML-N, PPP, and PTI — to seek assurances of their support for the key objectives and policies under a new IMF-supported programme ahead of the approaching national elections.

According to PPP leader Naveed Qamar who is also the commerce minister, the IMF had wanted political input on the matter and was informed by the party that the PPP, as part of the government, supported the agreement and the need for the IMF programme.

He had explained that without the programme, there would be severe repercussions for the economy. Qamar had also mentioned that this was the first time discussions with political parties took place.

Meanwhile, PTI’s Hammad Azhar said after the IMF’s meeting with his party’s leadership at party chief Imran Khan’s Zaman Park residence in Lahore that “we support the overall objectives and key policies” of the new programme.

“We welcome the SBA (standby arrangement) to preserve macroeconomic stability by anchoring external financing and sound policies ahead of the national elections due in the fall this year and until a new government is formed,” he said.

Later, Imran delivered an address via a video link, where he also said the PTI had agreed to “endorse the standby arrangement” with the IMF until elections were held and a new government was formed.

It is not yet known whether the IMF team will meet other members of the coalition government — including the JUI-F led by Maulana Fazlur Rehman who also heads the ruling coalition of the Pakistan Democratic Movement.

Meanwhile, the incumbent government has remained silent about the meeting between the IMF team and Imran so far. It was also unclear whether the government was in the loop about the IMF meetings with the PPP and PTI.

Previously, the government had reacted to a statement from the IMF about political stability, calling it interference in the country’s internal issues.