ISLAMABAD: With a whopping $31 billion required in FY19 to meet its external financing requirements, Pakistan has been projected as “very likely to seek an International Monetary Fund (IMF) programme” by end-September, Citigroup’s Head of Emerging Markets Asia Economics & Strategy Bank, Johanna Chua, analysed in a report Monday.“The sheer size of Pakistan’s external financing gap and an experienced list of technocrats advising the government on economic issues will likely lead to the same conclusion”, says Chua report. And here is where the rub is: “not going to the IMF is a far more economically and politically painful/riskier option than otherwise.”The IMF “and other major stakeholders”, the report predicts, should be supportive, adding that the Fund appears to be “very ready to engage the government”, with the US – its bluster and dire warnings notwithstanding – “sees a stable Pakistan economy in its best interest geopolitically”. At the same time, referring to the probable options for a bilateral bailout, the Chinese and the Saudis “do not want to be the “lenders of last resort”.This time around though, the report emphasises: the support may not come without strings attached. Already a recipient of 21 IMF programmes, the Fund may robustly pursue a “more effective” agenda, the raft of reforms including the State Bank’s independence, exchange rate flexibility and an aggressive push to privatize profusely bleeding public sector enterprises (PSEs).The programme “would likely warrant more prior action and stringent requirement from Fund than before”. But given Pakistan’s external debt service requirements jumping to $19bn in FY2020, the IMF may seek guarantees to gauge government’s commitment towards meeting these requirements.Citigroup’s report also mentions also makes it abundantly clear that the Fund is an independent decision-maker. The “US does not have veto power”, says the report. Since “there is no significant external debt repayment to Chinese lenders in near term”, the US opposition is not likely to hold any sway over the possible use of IMF funds diverted by Pakistan to pay off Chinese debt.China, the report asserts, will not resist an IMF programme. And because IMF does not evaluate individual projects, Chua says in the report that “China is unlikely to be opposed to greater disclosure of China-Pakistan Economic Corridor related program.”The government’s lack of urgency and indecision have the potential to delay by “drag the negotiations”. Dubbing the PM’s approach “unrealistic and inadequate”, the report disputes Imran Khan’s assertion on “attracting overseas diasporas money and bringing back looted wealth”. “The accumulation of new payment arrears of power distribution companies (circular debt), which was brought to near zero levels in FY 2016 has been climbing since, reaching 596bn — 1.7 percent of the GDP,” says the report, making it obvious to deal with loss-making Public Sector Enterprises and circular debt head-on. Mentioning the oft-cited setting up of a sovereign wealth fund, the Report terms its viability as “unclear”.If Pakistan chooses to forego the IMF funding, the alternatives for the government would remain difficult and unpalatable, such as higher funding costs and resorting to “import controls”.The report also accounts for the new government in office to deal with the dire economic situation yet mentions the recent appointments, including the Economic Advisory Council’s (EAC) on Friday, as inspiring confidence.