WASHINGTON: US Treasury Secretary Janet Yellen has said that the United States would continue to support the International Monetary Fund’s (IMF) efforts to help Pakistan deal with its fiscal and monetary problems.
Secretary Yellen offered this assurance at a hearing of the House Financial Services Committee on Tuesday when Congressman Al Green talked about the “threat of default” that Pakistan was facing and asked her to “help Pakistan” deal with this threat.
“We are supportive of the IMF’s work in Pakistan and there’s a program that is helping them deal with the devastation from the floods and their pre-existing fiscal and monetary problems,” said the US Treasury chief while responding to Mr Green. “And we are certainly supportive of their work there,” she added.
During the hearing, Mr Green pointed out that Pakistan was a case study on the effects of climate change and had suffered greatly from last year’s floods.
“I am going to ask you, if you were to use your good offices to help Pakistan, it clearly is in dire need of aid from the IMF and the World Bank as well,” he said.
Mr Green, a Texan Democrat, said that global warming was something that the US may deny, but countries like Pakistan were still suffering.
“Pakistan emits about one per cent of global greenhouse gases; we emit more than 10 per cent, yet Pakistan suffers. Please do what you can,” he said to the Treasury Secretary.
Mr Green also referred to Pakistan’s economic problems, noting that the country has been trying hard to salvage a loan program with the IMF to avoid default. Pakistan faces about $22 billion of external debt payments for the fiscal year 2024, about five times its reserves.
The IMF’s $1.1 billion funding to Pakistan is part of a $6.5bn Extended Fund Facility (EFF) agreed in 2019, but has been held up since November. The IMF has raised serious objections to Pakistan’s budgetary framework for 2023-24 and asked the government to increase both tax and non-tax revenues efforts, the Ministry of Finance high-ups informed the Senate Standing Committee on Finance and Revenues on Tuesday.
Pakistan’s EFF bailout programme with the IMF will expire on June 30.
Published in Dawn, June 15th, 2023