Postponement of 6 billion Dollars Extended Fund Facility (EFF) for Pakistan by the International Monetary Fund (IMF) for a few months on the grounds that its staff is not satisfied with the implementation of the loan terms, where the country's economy The government and the opposition have been blaming each other there and this has led to further escalation of political tensions. Representatives of Pakistan and the International Atomic Energy Agency (IAEA) were reviewing the lower-level agreement on the IMF loan for the sixth time, failing to reach a consensus, so further discussions on the issue were adjourned until September.
Top government sources have confirmed that the IMF board was due to approve the sixth review by July this year, but as disagreements did not abate, it was decided to postpone the review until September. When asked in writing about this, the Resident Chief of the IMF in Pakistan said that we have achieved sustainable development and stability through the implementation of policies, structural reforms and increase in social spending under the EFF program. We are ready to continue helping Pakistan to get loans for this purpose.
According to observers, his response indicated that since the sixth review under the EFF could not be completed, the IMF has decided to adopt a "watch and wait" policy to find out. How much the government can 'deliver' on its announced budget for 2021-22. The opposition camp has drawn its conclusions after the meeting of Pakistan and IMF representatives was inconclusive.
Former Finance Minister Muftah Ismail has claimed in a press conference that the IMF has withheld funds from Pakistan and the World Bank and the Asian Development Bank have also stopped lending. He said that the government was trying to persuade the IMF through the United States which would not be good for the nation. He was referring to strategic issues between Pakistan and the United States. He stressed that strategic issues should not be included in economic affairs. Rejecting the former finance minister's statement, the finance ministry spokesman said in a statement that the IMF's program was intact and that its new mission was expected to arrive in Pakistan in August to review its performance throughout the year.
The spokesperson also said that Pakistan has achieved all the targets of the IMF by March which is the best performance. The World Bank has not stopped lending either. It has already approved a large loan. Regardless of the political rhetoric of the government and the opposition, there is no doubt that the government is taking all necessary steps for economic recovery in line with the vision of Prime Minister Imran Khan.
This includes obtaining foreign loans, but it should be noted that friendly countries or international institutions do not provide unconditional loans. They definitely get something in return. The IMF is a powerful institution under the influence of the United States. He is notorious for imposing arbitrary conditions to keep developing countries like Pakistan in his sphere of influence. The government should try not to accept any of its conditions contrary to the national interest and give priority to the national interest while meeting its requirements for economic reforms.