Pakistan Must Stick to Promises Made to IMF

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The latest meeting between the IMF and the government of Pakistan demonstrates that the Fund remains “concerned” over delays in the materialisation of foreign loans of $2.5bn, including a Saudi oil facility of $1.2bn, and shortfalls in tax collection targets in addition to delays in privatisation of SOEs.

The government appears to be “falling short of meeting several critical structural benchmark targets.” On the positive side, “it still has some time to meet or, at least, move closer to, the targets as the first ‘formal biannual review’ of the bailout loan is expected to take place towards the end of February or early March.” It is critical the government continues along the lines promised to ensure that the next $1bn tranche is provided and, more critically, the market retains confidence in Pakistan’s economy.

As an editorial in Dawn noted, “Pakistan’s track record has not inspired much confidence in the country’s commitment to undertaking reforms. As they say, ‘once bitten, twice shy’ — multilateral and bilateral lenders are no longer in a mood to ignore the dilly-dallying on critical targets.”

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Author: Nadia Khalid