THE International Monetary Fund (IMF) on Thursday completed its first review of Pakistan’s economic reform programme supported by a $3 billion Stand-By Arrangement (SBA) and allowed the immediate disbursement of $700 million. According to the Finance Ministry, the completion of the first review by the IMF’s Executive Board and the payment of 528m in special drawing rights brought the total disbursements under the SBA to $1.9bn.
The successful review and disbursal of the due tranche has symbolic importance for a country that is faced with acute financial constraints. It is expected that the new tranche would help Pakistan in getting rollovers from allied countries such as the United Arab Emirates, Saudi Arabia and China and ease external debt repayment pressure. This is crucial in the backdrop of reports that the country has to pay $27.47 billion in foreign debt and interest cost over one year till the end of November 2024. A final decision would, of course, be taken by the new elected government but as things stand today, the country will have to negotiate another package with the IMF to ensure smooth payment of debt after the ongoing standby arrangement ends in March 2024. That effectively means the addition of more burden on the common man, who is already crying due to record price-hike and the cumulative impact of increased taxation and withdrawal of subsidies. This situation is far from satisfactory as the country is forced to take new loans to pay back the old ones and with the passage of time both external inflows and the capacity of the country to pay back are squeezing. There is no satisfactory way out without mobilization of internal resources, fast paced development of agriculture and provision of lucrative incentives for industrialization so as to produce enough surpluses for exports and the resultant augmentation of the foreign exchange reserves. All this demands continuation of policies and programmes and that is why the much-talked-about notion of Charter of Economy should be given a practical shape through sincere cooperation of all political parties as well as other stakeholders in the system.
