‘We can’t antagonise people…': Pakistan's ex-central bank chief on IMF deal

Pakistan Economic Crisis: "If we want to avoid default, we have to have a constructive relationship with those who are there," Reza Baqir said.

Pakistan needs a "constructive relationship" with global financial institutions if the country wants to avoid a default, former chief of the cash-strapped country's central bank said. Addressing the final session of Pakis­tan literature festival in London, Reza Baqir said that if there is a default Pakistan will go through a “painful, protracted process”. Pakistan's chances for the revival of the USD 6.5 billion International Monetary Fund (IMF) programme have almost diminished as it expires on June 30.

Pakistan Economic Crisis: People visit a market for shopping in Lahore, Pakistan. (AP)

The IMF has not yet disbursed USD 2.6 billion to Pakistan from the package.

“I am concerned because our relationship with the international financial community has not improved over the last few months. The deterioration comes in terms of substance and communication. If we want to avoid default, we have to have a constructive relationship with those who are there," Reza Baqir said.

"We cannot antagonise the people whose generosity we need. But it looks like that is not where it is headed. I always try to be cheerful in public communication. But it comes down to this: if you are a company or person who needs financial support to get through, it is the first step to have a constructive relationship with whatever financial institution will give you that support,” he continued.

Pakistan was expected to get around USD 1.2 billion from the IMF in October last year but the tranche has not materialised as Pakistan has been unable to meet important prerequisites as per the agency. The programme’s ninth review still continued while the tenth review could remain out of question as it is feared that Pakistan might default on external financing commitments without the active support of the IMF.