The International Monetary Fund (IMF) has completed its first review of Pakistan’s Economic Reform Program. Under this, an economic package of $ 2.3 billion (about Rs 19,500 crore) has been approved. Out of this, $ 1 billion (about Rs 8,500 crore) will be distributed immediately as part of the current extended fund facility (EFF). Additionally, $ 1.3 billion (about Rs 11,000 crore) is proposed under flexibility and stability facility (RSF). India has expressed strong opposition by not participating in this voting.
In a statement, India’s Finance Ministry expressed serious concern over the continuous assistance given by the IMF to Pakistan. Given Pakistan’s poor track record, the ministry questioned the effectiveness of IMF programs. He also said that the loan amount can be used for cross -border terrorism. India has said that Pakistan’s army has considerable control over the economy. The statement said, “Although there is a civil government there, the army still interferes with economic decisions, which puts a question mark on policies, reforms and transparency.”
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People’s helplessness and IMF loan
Pakistan’s economy is going through its worst phase. Its foreign exchange reserves were $ 15.25 billion as of 25 April. In 2023, when inflation rate in neighboring country will exceed 35%. He then received an emergency package of $ 3 billion to protect him from default. People were shouting hungry there. In the video and photos that went viral on social media, the helplessness of the people there was clearly visible. Pakistan’s economic condition is deteriorating due to increasing tension between India and Pakistan. Moody’s has also warned that these stresses may affect Pakistan’s credit rating.
Why was Pakistan loan from IMF?
The state of Pakistan’s economy is not hidden from anyone. As of April 25, its foreign exchange reserves were only $ 15.25 billion, which was not enough to pay foreign loans and imports. The IMF has provided this loan to stabilize Pakistan’s economic condition. Use it for increasing foreign exchange reserves, repaying loans and purchasing oil, gas and other essential items.
IMF conditions
The IMF has laid some conditions with loans. The first condition is that Pakistan will have to improve its economic policies. These include increase in tax collection, improvement in management of government -owned companies and changes in power sector. Pakistan will have to increase the number of taxpayers, as currently only 5 million people do it there. Also, subsidy on electricity and fuel will have to be reduced, which will reduce government expenditure. This amount will also be used to implement these reforms.
Disaster management fund
The $ 1.3 billion RSF part aims to deal with climate change and natural disasters. Pakistan suffered a lot due to the 2022 floods. More than 1,700 people died and crops were destroyed in this disaster. These funds will be used to prevent disasters like floods and protect the environment. The IMF has asked Pakistan to strengthen social security programs. Some part of this amount will be used to help the poor, increase expenditure on health and education and increase employment opportunities for women.
India’s message from staying away from voting
India’s stay away from IMF voting was not a way of expressing neutrality, but a way to express disagreements. There is no provision of ‘no’ votes in the IMF rules. The same thing is true in the United Nations. Any country can say ‘yes’ or stay away from voting. The power of voting depends on the country’s economic contribution. America’s opinion is more impressive. Most decisions are taken unanimously. India expressed their displeasure by staying away from voting and also followed the IMF rules.
A tough message to the world
Not taking part of India in IFF voting is a tough message for international organizations and the world. India says that providing funds to countries sponsoring terrorism not only promotes such activities, but also reduces the reliability of the global financial system. India clarified that such aid is the disregard of global norms and values. India has asked the IMF to review the financial assistance given to Pakistan and ensure that this amount is not used for wrong objectives.
