Will get $6 billion over three years, but govt will have to take action on terror financing
Even as the International Monetary Fund on Sunday agreed on a $6 billion bailout for Pakistan's beleaguered economy over the next three years, among the key areas that it will need to take action on includes its tackling of terror financing.
Confirming the bailout, the IMF said, "Priority areas include improving the management of public enterprises, strengthening institutions and governance, continuing anti-money laundering and combating the financing of terrorism efforts." The agreement now awaits a formal approval by the IMF board.
Pakistan's advisor on finance Abdul Hafeez Shaikh added that foreign loans have exceeded $90 billion, and exports have registered a negative growth over the past five years. "So Pakistan will get $6 billion from the IMF, and in addition we will get $2 to $3 billion from the World Bank and Asian Development Bank in next three years," he said.
The development comes even as Islamabad faces blacklisting by FATF due to inaction on its part to act on the financing of terror. The country was greylisted last year by the Paris based body.
An IMF mission was in Islamabad from April 29 to May 11 to discuss the bailout package or Extended Fund Facility (EFF) with the Imran Khan government and requires the government to cut subsidies and introduce several reforms.
"The EFF aims to support the authorities' ambitious macroeconomic and structural reform agenda during the next three years. This includes improving public finances and reducing public debt through tax policy and administrative reforms to strengthen revenue mobilization and ensure a more equal and transparent distribution of the tax burden," the IMF said.
The bailout will also see an increase in electricity prices by the Pakistan government that had assured it will not impact the common man. The agreement was reached at a technical staff-level and will now have to be approved by the IMF management and executive board. This is the 13th bailout the country has taken since the 1980s.
CHANGING PRIORITIES
- An IMF mission was in Islamabad from April 29 to May 11 to discuss the bailout package or an Extended Fund Facility, calls for withdrawing subsidies on electricity
- Among the key areas that Pakistan will need to take action on includes its tackling of terror financing.
(with Agency inputs)
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