The International Monetary Fund (IMF) Board on Monday approved the revival of Pakistan’s Extended Fund Facility Programme (EFF). It was announced by the Minister for Finance and Revenue, Miftah Ismail through a tweet, saying that after the IMF board okayed Pakistan’s case, the country would receive the 7th and 8th tranches of $1.17 billion from the IMF. Miftah congratulated the nation and also thanked Prime Minister Shehbaz Sharif for taking several tough decisions and saving Pakistan from default.
Finally, the long-awaited IMF’s Extended Facility Fund (EFF) program has been revised by the global lender and after months-long laborious negotiations, stringent fiscal measures grasped fruit on Monday. A few months back, Pakistan was facing serious challenges in managing its economic affairs, maintaining foreign reserves, fulfilling its energy needs and servicing foreign debt. After approval of the board, the IMF will immediately disburse Pakistan about $1.2 billion, while another $4 billion will be provided by the global lender at periodic intervals in the current year.
Currently, Pakistan is passing through a crucial time as the country’s economy is in a volatile position due to the impact of the COVID-19 pandemic and war in Ukraine while the ongoing disastrous spells of torrential rainfall had caused flooding across the country. The bulk of resources are required to compensate for the losses of the flood-hit people, reconstruct damaged infrastructure and rehabilitation over 33 million people in the country. Hence, the loan-addicted economy is unable to comprehend such colossal tasks without global assistance.
Although, the coalition government approached the IMF when there were not such drastic situations, however, the revival of the IMF program will be a blessing for the country because it will not only support foreign reserves but strengthen the value of the Pakistani currency, lower the rising inflation and restore the investors’ belief in the country. The coalition government must learn from past experiences and enforce strict economic discipline instead of practising politically influenced economic policies, as the country will not only have to pay back this foreign debt but also work to end loan addiction through self-reliance in the future.
