Pakistan has won final approval for a US$7.6 billion loan from the IMF to help the frontline state in the campaign against Islamist terrorism stave off possible economic meltdown.
The IMF said a first installment of US$3.1 billion will be transferred immediately to the nuclear-armed country, which is battling surging violence by Taliban and al-Qaeda-linked militants and is increasingly seen in the West as key to stabilizing neighboring Afghanistan.
The IMF said the Pakistani economy had been badly hit by the worsening security situation, higher oil and food import prices and the global financial and credit crisis.
“By providing large financial support to Pakistan, the IMF is sending a strong signal to the donor community about the country’s improved macroeconomic prospects,” IMF acting chairman Takatoshi Kato said in a statement released after the decision Monday in Washington, where the fund is based.
Pakistan’s young government had been reluctant to go to the IMF but had little choice after close allies — the US, China and Saudi Arabia — turned down pleas for significant bilateral aid.
In the middle of this month, the IMF announced it had reached a preliminary agreement on the deal.
Opposition and nationalist lawmakers have criticized the government for turning to the fund, saying the IMF will impose austerity measures that will hurt ordinary Pakistanis, two-thirds of whom live on US$2 a day or less.
“This IMF loan the government is getting is in fact poison, and the nation has been forced to drink it,” Javed Hashmi, a senior figure in the main opposition party, told reporters.
But many Pakistani economists and commentators argue that the country had no choice but to turn to the IMF. They say it is now critical that the money is well spent — always a worry in corruption-prone and chaotic Pakistan.
The IMF said in return for the money, Pakistan had agreed to phase out energy subsidies, boost taxes and implement other money saving reforms. It said the World Bank would put in place a “comprehensive” social security net to shield the poor from any cuts.
In an interview earlier this month, Pakistani President Asif Ali Zardari said the loan was “a difficult pill, but one has to take medicine to get better.”
The loan will immediately boost Pakistan’s foreign currency reserves, which have seen a rapid decline that has led to the value of the rupee falling some 20 percent since March, and enable it to pay of foreign-denominated debt due to mature soon.
The country is also wracked by power cuts, while the costs of essential goods are soaring and the stock market has plummeted amid waving investor confidence.
A fire caused by a burst gas pipe yesterday spread to several homes and sent a fireball soaring into the sky outside Malaysia’s largest city, injuring more than 100 people. The towering inferno near a gas station in Putra Heights outside Kuala Lumpur was visible for kilometers and lasted for several hours. It happened during a public holiday as Muslims, who are the majority in Malaysia, celebrate the second day of Eid al-Fitr. National oil company Petronas said the fire started at one of its gas pipelines at 8:10am and the affected pipeline was later isolated. Disaster management officials said shutting the
US Vice President J.D. Vance on Friday accused Denmark of not having done enough to protect Greenland, when he visited the strategically placed and resource-rich Danish territory coveted by US President Donald Trump. Vance made his comment during a trip to the Pituffik Space Base in northwestern Greenland, a visit viewed by Copenhagen and Nuuk as a provocation. “Our message to Denmark is very simple: You have not done a good job by the people of Greenland,” Vance told a news conference. “You have under-invested in the people of Greenland, and you have under-invested in the security architecture of this
UNREST: The authorities in Turkey arrested 13 Turkish journalists in five days, deported a BBC correspondent and on Thursday arrested a reporter from Sweden Waving flags and chanting slogans, many hundreds of thousands of anti-government demonstrators on Saturday rallied in Istanbul, Turkey, in defence of democracy after the arrest of Istanbul Mayor Ekrem Imamoglu which sparked Turkey’s worst street unrest in more than a decade. Under a cloudless blue sky, vast crowds gathered in Maltepe on the Asian side of Turkey’s biggest city on the eve of the Eid al-Fitr celebration which started yesterday, marking the end of Ramadan. Ozgur Ozel, chairman of the main opposition Republican People’s Party (CHP), which organized the rally, said there were 2.2 million people in the crowd, but
JOINT EFFORTS: The three countries have been strengthening an alliance and pressing efforts to bolster deterrence against Beijing’s assertiveness in the South China Sea The US, Japan and the Philippines on Friday staged joint naval drills to boost crisis readiness off a disputed South China Sea shoal as a Chinese military ship kept watch from a distance. The Chinese frigate attempted to get closer to the waters, where the warships and aircraft from the three allied countries were undertaking maneuvers off the Scarborough Shoal — also known as Huangyan Island (黃岩島) and claimed by Taiwan and China — in an unsettling moment but it was warned by a Philippine frigate by radio and kept away. “There was a time when they attempted to maneuver
RSS