That the incumbent government has done anything and everything to keep the International Monetary Fund (IMF) in good humour is a fact. In this regard, it is important to note that June 30 2023 is the date when the $6.5 billion Extended Fund Facility (EFF) agreed in 2019 is set to expire.
Revisiting the budget for fiscal year 2023-24 by the government and raising the policy rate by 100 basis points to 22 percent by State Bank of Pakistan are the key steps that must convince the lender of the last resort to release the stalled tranche. The budget changes include Rs 215 billion additional taxation measures and withdrawal of import restrictions.
In my view, it is about time the IMF revisited its approach to Pakistan in view of the fact that the incumbent government has met all of Fund’s conditionalities. The edgy procrastination on the part of IMF has been inflicting immense harm on the country’s economy, which is already in tatters. Unfortunately, it increasingly appears that the Fund is no longer a solution; it’s, in fact, a part of problem.
The IMF is known as the lender of last resort to countries in financial trouble. The IMF is, therefore, requested to live up to its reputation in accordance with the mechanism that John Maynard Keynes had outlined in the early 1930s.
Shahid Ikram (Karachi)
Copyright Business Recorder, 2023
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