WASHINGTON: The International Monetary Fund on Friday disbursed $555.9 million to Pakistan, completing the third review of the country’s economic performance.
A statement issued by the IMF headquarters in Washington noted that Pakistan was on track with the conditions of the IMF loan programme.
“The Executive Board of the International Monetary Fund today completed the third review of Pakistan’s economic performance under a three-year programme supported by an arrangement under the Extended Fund Facility,” the announcement said. “The completion of the review enables an immediate disbursement of … $555.9 million.”
On September 4, 2013, the IMF Executive Board approved the 36-month extended arrangement under the extended facility of $6.78 billion, or 425 per cent of Pakistan’s quota at the IMF. The arrangement saved Pakistan from possible default.
Pakistan received $544.4 million on entering the programme as the two sides agreed that the remaining amount will be evenly disbursed over the duration of the programme, subject to the completion of quarterly reviews.
The disbursement can stop if Pakistan fails to institute reforms, including cracking down on tax evasion and privatising loss-making state companies.
In April, Pakistan announced a policy of publicising the names of tax defaulters to force them to pay.
Only one in 200 citizens files income tax returns, leaving the state to borrow from foreign donors to meet its expenses.
“Despite the challenges it faces, Pakistan is a country with abundant potential, given its geographical location and its rich human and natural resources,” the IMF observed while approving the programme.
The programme is expected to help the economy rebound, forestall a balance of payments crisis and rebuild reserves and reduce the fiscal deficit.
Pakistani authorities also agreed to undertake comprehensive structural reforms to boost investment and growth.
The IMF said that adherence to the programme might also catalyze the mobilisation of resources from other donors.
Published in Dawn, June 28th, 2014
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