A two-member IMF team, headed by Dr Masood, has shown some kind of leniency after meeting to the decision-makers and Pakistan's political leadership during its visit to Pakistan that the Fund would send its mission to Pakistan in the second week of February to assess its economic situation, and its request for issuing LoC would be decided on the mission's report.
The Fund will also depend on its mission's assessment for recommending to its Board for the release of two remaining tranches to Pakistan under the standby arrangement (SBA). Sources said that the Fund team has clearly conveyed to Pakistan that at present, when it has missed all key targets like imposition of reformed general sales tax, is not in a position to take Pakistan's request outrightly, and issue it an LoC for helping it to get assistance from other multinational donors like the World Bank.
They said that the World Bank and other donors are holding their announced financial assistance for Pakistan for the current fiscal year and, if IMF did not issue LoC, that would simply mean 'no money from multinational donors'. Pakistan is in a situation where the political parties are setting their own agenda and looking for easy solution to avoid the people's wrath and Tunisia- or Egypt-like situation, and are hardly bothered for a visible economic collapse.
The government, too, is not taking difficult decisions for immediate turnaround and keep things moving on the economic side. The capping of oil prices for the second consecutive months when the international market is critical and going rough with $100 a barrel price for crude oil is one of many examples. The economic managers themselves are in desperation: they are considering the government decisions of politicising the economy with a shock.
"We have been continuously asking the government not to do politic on pure economic issues like fixing of petroleum products prices, but our calls are going unnoticed", said a senior official here. These developments have sent a very wrong message to the donors who are already not comfortable with Pakistan due to such ill-conceived decisions.