Islamabad : September 25,2024 : Finally , the International Monetary Fund (IMF) has approved a $7 billion loan for Islamabad under Extended Fund Facility (EFF) programme. IMF executive board approved the new loan for Pakistan on September 25 ( Wednesday). Prime minister , Shahbaz Sharif , had met with IMF chief in New York a few hours before the lender’s executive board met to consider Pakistan’s case for the new loan amounting to $ 7 billion under EFF.
Pakistan and IMF had reached an agreement for the new loan on July 12 in Islamabad and the former was expecting approval of the loan by mid of September . However , IMF delayed the approval for pressing Pakistan to meet its conditions to qualify for long term loan under EFF.
With the new loan of $ 7 billion , Pakistan became the first country which got maximum IMF programmes. Instead of planning to enhance its own income resources and attaining financial autonomy , Pakistan is living on loans . With Wednesday’s loan , Pakistan’s external loan stands at $ 143 billion. Even after facing default like situation , Pakistan’s rulers are not hesitating from getting more loans from IMF and other lenders. This attitude of the rulers have entangled Pakistan into a debt trap.
In order to qualify for the new loan , Pakistan took a number of harsh measures like increase in power rates around 50 %, enhancement of PDL on petrol and shifting of fiscal responsibilities on the provincial governments. Pakistan also bagged the most expensive loan amounting $ 600 million a coule of weeks ago to meet the condition of the lender for the new loan. Pakistan has also committed to IMF to make the provinces responsible to impose agricultural tax, besides undertaking a series of economic reforms to cut down its expenditures.
IMF is demanding of Pakistan to cut down size of the federal government to minimize expense. The lender is also pressing Pakistan to sell off loss making entities like PIA , Railways, DISCOs and one dozen other state owned organisations. IMF is also demanding complete end to its culture of subsidies.
Pakistan’s top forex dealer , Malik Bostan Khan , commented on approval of $ 7 billion loan for Pakistan by IMF. He said IMF loan is a good news for Pakistan as it would help it to attain economic stability. He added that Pakistan ‘s economy has rebounded and IMF loan will speed up its pace of growth. Malik Bostan Khan counted increase in remittances , exports and forex reserves to prove his point that Pakistan ‘s economy has returned to the right track and timely approval of IMF loan of $ 7 billion will help get required growth rate in coming years.
