Pakistan needs a “constructive relationship” with the global financial institutions if it wants to avoid a default, the former chief of the cash-strapped country’s central bank has said.
The remarks by Reza Baqir, the former governor of the State Bank of Pakistan came as he addressed the final session of the PakisÂtan Literature Festival, held on Saturday in London.
He said that if there is a default, Pakistan will go through a “painful, protracted process”. Pakistan’s chances for the revival of the current USD 6.5 billion International Monetary Fund programme have almost diminished before it expires on June 30. Out of the USD 6.5 billion packages, the IMF has not yet disbursed USD 2.6 billion to Pakistan.
“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,” Baqir said. “We cannot antagonise the people whose generosity we need. But it looks like that is not where it is headed,” he was quoted saying.