More conditions, what?

The lender is not convinced. It is demanding more from Pakistan before it goes on to release the succor of $1.2bn to keep the balance of payments in order and the economy afloat. The masses have already paid a heavy price as the economy tumbled in the wake of recent political changes. The dollar’s flight is unchecked, rupee marginalised to the core, and soaring current account deficit and inflation have made life miserable. Now IMF reportedly has come up with a new wish list, and that is surely tantamount to bleeding the fragile economic indicators. IMF has linked $1.2bn approval with bridging yawning financing gaps — a demanding proposition in these tough times.

In a first of its ironic terms, the donor has conditioned Pakistan’s ability to secure ‘adequate assurances’ from friendly countries for more loans. This is quite a trepid point, and is an antithesis of knocking at the doors of IMF. Why should Islamabad obtain a loan at all, if friendly states are forthcoming? Secondly, the Fund’s condition earlier to censure loans from Chinese commercial banks is another spanner in the works. While IMF says that Pakistan has lived up to its conditionalities, what ails it from releasing the tranche?

This Extended Fund Facility program is toiling and creeping on to check the nation’s patience. The uphill task at hand for the embattled and clueless coalition government is to convince the three main bilateral creditors to chip in at least $4 billion, in a desperate attempt to overcome the ongoing fiscal year needs of over $35 billion. This delicate and horrendous situation compelled even the Army Chief General Qamar Javed Bajwa to place a call to US Deputy Secretary of State Wendy Sherman, to request for an instant release of the IMF tranche. What political and geo-strategic cost it will entail is anybody’s guess, specifically keeping in view the upheavals in the region. Pakistan’s economic format is down and out, and it necessitates drastic measures to rehabilitate it into normal breathing space. Loans and conditionalities, coupled with ad-hocism, have pushed it at the cliff.

Published in The Express Tribune, August 4^th, 2022.

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