Islamabad, 11 September 2024 (TDI): The International Monetary Fund (IMF) has appointed Mahir Binici as its new country head for Pakistan, a move that coincides with the government’s intensified efforts to secure a $7 billion loan approval by the end of September.
Mahir Binici, a Turkish national with extensive experience in macroeconomic policies and the financial sector, particularly in emerging markets, will take over from Esther Perez in December.
His appointment comes amid growing suspicion in Pakistan about the IMF’s intentions, especially regarding its approach to the country’s economic challenges.
Officials have expressed concerns about the IMF’s handling of Pakistan’s economic programme, accusing the global lender of setting unrealistic assumptions for the current account deficit during the last two programmes.
The IMF’s insistence that Pakistan raise new external loans to back those numbers has led to rising skepticism, including from Deputy Prime Minister Ishaq Dar, who has publicly questioned the Fund’s motives.
The last two Resident Representatives for Pakistan were both Spanish nationals with backgrounds in their country’s Ministry of Finance.
Binici’s Challenges
Binici’s immediate challenge will be overseeing the smooth implementation of the ambitious $7 billion Extended Fund Facility (EFF), which already faces risks even before its approval by the IMF’s Executive Board.
Notably, the IMF’s board calendar, which extends until September 18, does not yet include Pakistan’s case, despite earlier statements from the central bank governor, Jameel Ahmad, indicating that Pakistan aimed to secure board approval in the first half of September.
Now, government officials aim for the fourth week of September.
Pakistan was delisted from the IMF’s programme in August after failing to secure rollovers of $12 billion in cash deposits and an additional $2 billion in new financing.
The IMF has mandated that Pakistan arrange these funds from other creditors before the board meeting can approve the programme, a condition that has forced the government to raise some of the most expensive loans in its history.
Read Also: Dar Casts Doubt on IMF’s Motives Towards Pakistan
Binici’s second challenge will be to rebuild trust and make the IMF’s Pakistan office a genuine bridge between Islamabad and Washington, rather than merely serving as an extension of the IMF’s headquarters.
The global lender has faced growing distrust from Pakistani officials, experts, and the general public, who blame its conditions for the country’s economic stagnation, high unemployment, and growing poverty.
Within government circles, concerns are mounting over the IMF’s role in Pakistan’s economic affairs.
Critics argue that the Fund forced Pakistan to accept unrealistic targets, such as a nearly Rs13 trillion revenue collection target for the Federal Board of Revenue (FBR).
The FBR has already reported a shortfall of Rs98 billion in just two months, with further shortfalls expected.
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