International

Trump’s flattery worked for Shahbaz, IMF will give $1.2 billion bailout fund to Pakistan, Saudi also helped

By Samira Vishwas

IMF Announces 1.2 Billion Dollar Fund for Pakistan: The International Monetary Fund (IMF) has announced the release of financial assistance of about $ 1.2 billion to Pakistan, which is considered a major relief amid the country’s dire economic situation. Pakistan has been struggling with problems like high inflation, foreign exchange crisis and energy crisis for a long time, where the inflation rate has reached more than 22 percent.

This IMF fund is part of Pakistan’s existing $7 billion bailout program. Under this program, funds are released in installments and for this the country has to fulfill the conditions and reforms set by the IMF. The decision was taken after the IMF successfully completed the third review of the Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF) recently.

Why did the funds go to Pakistan?

The International Monetary Fund has recommended Pakistan to increase the tax base, especially by bringing agriculture, IT and retail sectors into the tax net, as well as reforming the energy sector. Due to these conditions, the Pakistan government recently had to take drastic steps like increasing electricity rates.

Earlier, the IMF delegation had held talks in Karachi and Islamabad, Pakistan in February-March, but no final agreement could be reached in the initial phase. Later the talks continued through virtual medium and eventually a staff-level agreement was agreed upon.

Saudi Arabia also gave 2 billion dollars

At the same time, Pakistan has also intensified its efforts to garner financial assistance at the international level during this period. Recently, assistance of about $ 2 billion has been confirmed from Saudi Arabia, which will help in stabilizing its foreign exchange reserves to some extent.

Analysts believe that global geopolitical factors also influence IMF decisions, as the US is the IMF’s largest shareholder and has an influential role in important decisions. However, the IMF says that the release of funds is mainly based on reforms and adherence to conditions, and not on political pressure.

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Hope for Pakistan

Different opinions have also been coming forward regarding American leadership, but under IMF rules, every country is required to complete the prescribed economic reforms. This assistance is certainly a relief for Pakistan at the moment, but for long-term economic stability it will have to continuously implement structural reforms.

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