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Pakistan

IMF shareholders deeply divided over Pakistan, other countries request to suspend loan surcharges

  • Executive board discussed surcharges it collects from mostly middle- and lower-income countries on larger loans that are not repaid quickly, but failed to agree to launch a formal review
Published December 13, 2022

WASHINGTON: The International Monetary Fund's executive board on Monday discussed the surcharges it collects from mostly middle- and lower-income countries on larger loans that are not repaid quickly, but failed to agree to launch a formal review.

Argentina, Pakistan and others are pushing the IMF to drop - or at least temporarily waive - the surcharges, which the IMF estimates will cost affected borrowers $4 billion on top of interest payments and fees from the start of the COVID-19 pandemic through the end of 2022.

Pakistan expects multibillion-dollar support from Saudi Arabia: sources

The United States, Germany, Switzerland and other advanced economies oppose a change, arguing that the fund should not change its financing model at a time when the global economy is facing significant headwinds.

An IMF spokesperson said the board discussed potential changes to the policy during its regular review of the global lender's precautionary balances, but failed to reach a consensus on reviewing the policy.

"Overall, views on changes to the surcharge policy continued to diverge, including on the merits of a temporary waiver of surcharges," the spokesperson said.

No details were provided, but the fund said it would publish a staff paper and a press release in the coming days that would provide a fuller account of the board's deliberations.

No date was set for any further board discussion. Kevin Gallagher, who heads the Global Development Policy Center at Boston University, said big shareholders should rethink their opposition, given the global economic outlook.

IMF says global debt well above pre-pandemic levels despite steep 2021 drop

"This is the most urgent time to address a fundamentally flawed business model where the IMF is generating revenues by taxing those most in need," Gallagher said.

But it was notable, he said, that the IMF's shareholders had failed to outright reject a review. "One silver lining is that the biggest shareholders ... didn't have enough strength to kill the proposal," he said.

Comments

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Mehrunnisa,19 Quetta Dec 13, 2022 12:55pm
Bring back imran you all. Everything will be sorted out
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Junaid khan Dec 13, 2022 01:41pm
@Mehrunnisa,19 Quetta, Pakistan needs not a good politician but a good economic manager
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MALIK BAKHTIAR AZIZ Dec 13, 2022 02:06pm
Good for Future.
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MALIK BAKHTIAR AZIZ Dec 13, 2022 02:07pm
Good for Future.
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alliabsolutions Dec 13, 2022 03:27pm
@Mehrunnisa,19 Quetta, He has already done enough damage to Pakistan's society, economy and polity. God forbid his return.
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M Waseem Dec 13, 2022 04:13pm
@Mehrunnisa,19 Quetta, you have no idea about country troubles. Pakistan needs peace and rule of law only. A single face, whoever it is, may not save the sinking ship.
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Mubashar Dec 13, 2022 06:48pm
Pakistan ruling elite is corrupt and above the law of land so no road map to resolve upcoming default crisis. Current PDM ruling elite had remained in power in past always eager for corruption.
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Dr. Amad Dec 13, 2022 07:25pm
This political system is the cause of destruction of economy of Pakistan, where corrupt, looters can participate in election while educated, low income people cannot participate. Political organizations give only tickets to winning horses.....
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Abrar Ahmed Dec 13, 2022 11:02pm
@Mehrunnisa,19 Quetta, most women think like you but can you tell why IK could not find a Muslim women to marry at his marriageable age and picked a white jew. He is driven by his lust, and people like you believe him. Sad
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Abu Lakhia Dec 13, 2022 11:50pm
@Junaid khan, I agree with you but a good economic manager, not a juggler of numbers like the current finance ministers based on his past records.
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Arif Dec 13, 2022 11:58pm
IMF must be knowing how much loan Pakistan has received since 1947 and how much returned in which year. IMF also knows the exact breakup of funds received by either political party during their tenure. IMF also knows the numbers and costs of each project started, processed and completed within the tenure of either party's government. IMF also knows which opposition party had disturbed more to the ruling party through protests, agitation, legal actions and defamation resulted instability, insecurity, defamation and delays in executing development work in the country.
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Mir Adnan Yakub Dec 14, 2022 06:04am
Our beloved corrupt govt will transfer all IMF LOANS into their personal bank accounts. Already their properties are in different countries. ENSURE IMF WILL TAKE BACK THEIR LOANS FROM THEM , NOT FROM PUBLIC. Public cannot pay further more taxes at all. Loans goes directly into polititions pockets for their personal use. IMF monitoring over corruption is needed and very important in Pakistan.
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Khan Dec 14, 2022 08:15am
@Abrar Ahmed, And what about Others Also Please explain....
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Mir Adnan Yakub Dec 14, 2022 09:13am
It's IMF responsibility to feed Pakistan. Regime change order was given by the U.S. Our beloved General executed. IMF must provide maximum Loans, and do monitoring it's misuse. All Pakistanies foreign accounts should be used as guarantee against the Loan.
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Gnay.Aly Dec 16, 2022 02:52am
It's fault
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Gnay.Aly Dec 16, 2022 02:54am
@alliabsolutions, When PTI IMRAN KHAN WAS IN GOVERNMENT IN AUGUST 2021 FOREIGN EXCHANGE RESERVES WITH STATE BANK OF PAKISTAN US $ 27 BILLIONS YOU CHECK IT sbp.org.pk WEBSITE of STATE BANK OF PAKISTAN
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