The IMF’s decision to provide a USD 6 billion bailoutpackage to Pakistan has improved the cash-strapped country’s standing and itwould attract USD 38 billion more from other lenders, Prime Minister ImranKhan’s Adviser on Finance has claimed.
The statement by Dr Abdul Hafeez Shaikh came a day after theInternational Monetary Fund (IMF) formally approved the USD 6 billion loan toPakistan, which is facing “significant” economic challenges on theback of “large” fiscal and financial needs and “weak andunbalanced” growth.
Shaikh said that the IMF decision improved the country’sstanding and other institutions had also started extending their financialsupport, Dawn news reported.
He said that the Asian Development Bank would disburse aboutUSD 2.1 billion out of USD 3.4 billion agreed to Pakistan this year and theWorld Bank had also agreed to provide additional assistance purely forbudgetary support.
Discussions with the World Bank were in progress forassistance only for the purpose of government expenditure, Shaikh said.
Giving a breakdown of USD 38 billion expected financialsupport from lenders other than the IMF, Shaikh said that about USD 8.7 billionfunds had been lined up against project loans, USD 4.2 billion for programmeloans, about USD 14 billion of rollover loans and up to USD 8 billion incommercial loans. He did not go into the details and sources of these loans.
Responding to a question, the Prime Minister’s Advisor saidPakistan’s outflows for debt-servicing amounted to USD 9.5 billion during thelast financial year and projected at USD 11.8 billion during the current fiscalyear.
He said that there had been different exaggerations andunfair comments about the IMF conditions.
Shaikh said that there was also no condition or the IMFdemand in the programme about the privatisation as it would become clear fromthe documents to be released by the global lender.
Instead, Pakistan has to develop a comprehensive programmeto decide which loss making entities could be improved and run in the publicsector, which can be better run by the private sector and which requireliquidation.
He said that the government had given independence to theState Bank of Pakistan so that it emerged as a strong institution like othersin the world.
Pakistan approached the IMF in August 2018 for a bailoutpackage after the Imran Khan government took over.
On Wednesday, the IMF approved a 39-month USD 6 billion loanfor Pakistan with tough conditions to address its balance of payment crisis andhelp the country’s ailing economy return to “sustainable growth”.
The USD 6 billion financial aid includes an immediatedisbursement of USD 1 billion to help Pakistan address its balance of paymentcrisis.
The latest deal is the 22nd bailout package since Pakistanbecame a member of the IMF in 1950.
Pakistan has so far received billions in financial aidpackages from friendly countries like China, Saudi Arabia and the UAE duringthe current fiscal year.