Pakistan is struggling to finalize a $7 billion bailout deal with the International Monetary Fund as it falls short in key specifics, observers said.
The apparent delay for the latest agreement has raised eyebrows and stoked fears about the future of the deal, seen as crucial for keeping the wobbly economy afloat. THE inclusion of Pakistan’s case on the agenda of the IMF Executive Board meeting later this month must end the uncertainty around the new $7bn bailout for this crisis-hit nation. The IMF will review the country’s loan request on Sept 25 since Islamabad has “obtained necessary financing assurances from its development partners”.
The IMF announcement comes nearly two months after the lender had signed a staff-level agreement with Islamabad.
The delay in the ratification of the 37-month programme by the Fund had fuelled speculation that the government was facing difficulties in meeting its stipulations regarding the confirmation of $12bn debt rollovers from China, Saudi Arabia and the UAE, as well as the arrangement of fresh funding of $2bn to cover the external financing hole for the present fiscal. The new loan deal when approved will last for 37 months. It is aimed at strengthening fiscal and monetary policy as well as reforms to broaden the tax base, improve the management of state-owned enterprises, strengthen competition, secure a level playing field for investment, enhance human capital, and scale up social protection through increased generosity and coverage in a major welfare program, the IMF said. (www.asia.nikkei.com/)
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