Islamabad, Sep 21: Pakistan is on track to receive its 24th loan from the IMF as discussions begin for a new agreement following the disbursement of the last tranche from the current $3 billion program.
The IMF’s focus on fiscal consolidation has often led to increased poverty and inequality in the country, raising concerns about the implications of these conditions on human rights.
As the existing program comes to an end, the government is seeking another long-term loan to prevent default, exacerbated by the economic fallout from the devastating floods affecting 33 million people.
Although Pakistan’s foreign reserves rose to $8 billion after the last loan, they remain insufficient to cover even two months of imports. The country faces a significant debt burden, with a debt-to-GDP ratio exceeding 70%, requiring a large portion of government revenue for debt interest payments.
While the IMF has noted some economic improvements, such as reduced inflation, these gains are largely attributed to increased lending rather than genuine stability.
The government must obtain parliamentary approval for major economic reforms, including changes in the energy and tax sectors, before formal negotiations can begin.
The past measures imposed by the IMF have included harmful austerity practices, such as raising taxes in the renewable energy sector and cutting subsidies, which have sparked protests over rising living costs.
Critics, including civil society organizations and experts, argue that the IMF’s approach exacerbates Pakistan’s long-term economic issues and undermines the country’s recovery efforts. As Pakistan navigates this precarious economic landscape, the call for a more humane approach to debt management and international support continues to grow.
