IMF approves USD 1 billion loan for Pakistan

The International Monetary Fund IMF on Friday approved the immediate disbursement of about USD 1 billion to Pakistan under the ongoing Extended Fund Facishylishyty In a statement the Washingtonbased global lender said its Executive Board concluded the initial review of Pakistans economic reform programme under the Extended Fund Facility EFF arrangementThis decision allows for an immediate disbursement of around USD 1 billion SDR 760 million bringing total disbursements under the arrangement to about USD 21 billion SDR 152 billion the agency said In addition the IMF Executive Board approved the authorities request for an arrangement under the Resilience and Sustainability Facility RSF with access of about USD 14 billion SDR 1 billionThe IMF said in a statement that Pakistans 37month EFF was approved on September 25 2024 and aims to build resilience and enable sustainable growth with priorities including entrenching macroeconomic sustainability It said the RSF will support Pakistans efforts to reduce vulnerabilities to natural disasters and to build economic and climate resilienceFollowing the Executive Board discussion Deputy Managing Director and Chair Nigel Clarke said risks to the outlook remain elevated particularly from global economic policy uncertainty rising geopolitical tensions and persistent domestic vulnerabilities India earlier raised concerns over the efficacy of IMF programmes in the case of Pakistan given its poor track record and also on the possibility of misuse of debt financing funds for statesponsored crossborder terrorismNew Delhi also opposed the IMFs proposal to extend fresh loans of USD 23 billion to Pakistan saying they could be misused for financing statesponsored crossborder terrorism India registered its protest at the board of IMF which met on Friday to review the EFF lending programme for Pakistan New Delhi abstained from voting at the crucial IMF meetingThe IMF took note of Indias statements and its abstention from the vote Indias opposition at the IMF comes at a time when military conflict between India and Pakistan has intensified after a terrorist attack in Kashmirs Pahalgam killed 26 people mostly tourists on April 22 India pointed out that rewarding continued sponsorship of crossborder terrorism sends a dangerous message to the global community exposes funding agencies and donors to reputational risks and makes a mockery of global values the Indian finance ministry said in a statementWhile the concern that fungible inflows from international financial institutions like the IMF could be misused for military and statesponsored crossborder terrorist purposes resonated with several member countries the IMFs response is circumscribed by procedural and technical formalities This is a serious gap highlighting the urgent need to ensure that moral values are given appropriate consideration in the procedures followed by global financial institutions the ministry saidIt further said that the Pakistan militarys deeply entrenched interference in economic affairs poses significant risks of policy slippages and reversal of reforms Even when a civilian government is in power now the army continues to play an outsized role in domestic politics and extends its tentacles deep into the economy A 2021 UN report described militarylinked businesses as the largest conglomerate in Pakistan the statement saidThe situation has not changed for the better rather the Pakistan army now plays a leading role in the Special Investment Facilitation Council of Pakistan it noted Meanwhile a statement issued by the Prime Ministers Office in Pakistan said Prime Minister Shehbaz Sharif expressed satisfaction over the approval of a USD 1bn dollar instalment for Pakistan by the IMF and the failure of Indias highhanded tactics against itPakistans economic situation has improved and the country is moving towards development India is plotting a conspiracy to divert attention from our countrys development through unilateral aggression it said Indian attempts to sabotage the IMF programme have failed the statement said adding that the IMF programme would help stabilise Pakistans economy and put it on the path towards longterm recoveryWe are working on priority areas such as tax reform improved energy sector performance and private sector development The improved economic indicators in the last 14 months are a reflection of the governments positive policies it said The approval of the IMFs executive board has led to an immediate disbursement of USD 1 billion bringing total disbursements under the loan programme to about USD 2 billionOn the successful completion of seven halfyearly reviews Pakistan is entitled to seven equal instalments of about USD 1 billion under the loan programme Pakistan and the IMF had reached a threeyear USD 7 billion aid package deal in July last with the new programme set to allow the country to cement macroeconomic stability and create conditions for stronger more inclusive and resilient growthThe IMF and Pakistan had reached a stafflevel agreement on March 25 this year on the first biannual review of the 39month USD 7 billion loan programme agreeing on a series of reforms including the introduction of a carbon levy timely revisions to electricity tariffs increased water pricing and liberalisation of the automobile sectorThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoeveratOptionskeyd0ddb8ef8f1a62a8cdd22fac27fc5ea7formatiframeheight90width728params