The International Monetary Fund’s (IMF) Director of Strategic Communications Julie Kozack has said that “steadfast implementation” of the nine-month Stand-by Arrangement (SBA) was critical to Pakistan’s future.
“Steadfast implementation is critical to address its large financing needs & support the most vulnerable,” she said in a statement on Thursday.
“The SBA is aimed at supporting the authorities’ immediate efforts to stabilise the economy,” she said, “and also to ensure that the current balance of payments need is filled.
“While it is a relatively short programme, it provides time for Pakistan to implement policies critical to strengthening its domestic and external economic situation thereby supporting sustainability.
“Of course, resolving Pakistan’s structural challenges will likely require continued reforms over the medium term to underpin the needed economic transformations to strengthen inclusive growth prospects and to create an environment conducive to renewed private capital inflows.
“We at the IMF always stand ready to work with Pakistan and the Pakistani government on these efforts to restore sustainability and economic stability,” she added.
Earlier this week, the IMF approved a $3 billion bailout package to save Pakistan from default and put it back on the reforms path – a journey that Islamabad undertook only after friendly countries linked its support with the fund’s deal.
The IMF Executive Board approved a nine-month SBA in the amount of SDR2.25 billion or about $3 billion. The amount is equal to Pakistan’s 111% of the quota.
“The arrangement comes at a challenging economic juncture for Pakistan,” the IMF said in a statement issued after the board meeting.
The board members were critical of Pakistan’s lack of consistency in reforms and its failure to honour its commitments.
The board discussions suggested that it was the last opportunity for the rulers to put their act together, according to sources. They added that India tried to spoil the show and eventually abstained from voting.
It is the 23rd programme that Pakistan signed with the IMF. So far, only one programme (2013-16) could be fully implemented that too on the back of a host of waivers against key conditions.