Another IMF bailout package

Another IMF bailout package

The encouraging news for the troubled economy of the Islamic Republic of Pakistan came last week when the IMF approved yet another bailout package for Pakistan. People associated with the economy in the country have expressed satisfaction with the approval of the seven billion dollar bailout package. 

According to the Governor of State Bank of Pakistan, Pakistan has received the first installment of 1.1 billion dollars. For the preparation and approval of this bailout package, Chief of Army Staff General Asim Munir personally tried and satisfied the organization with his guarantee. Similarly, he also trusted China, United Arab Emirates and Saudi Arabia and the future  Gave his guarantee regarding the measures of

This bailout package was approved by the efforts of the State of Pakistan and Moqtadra. This program will continue for 37 months from the IMF. Thanks to this program, the fears of Pakistan going into default have ended, while on the other hand, a significant reduction in oil prices will also help in reducing Pakistan's trade deficit.  Although no civilized country sings joyous weddings or sends congratulatory messages on getting a loan, debt itself is a humiliating condition that the entire nation has to go through.

However, the Prime Minister congratulated the entire nation for getting the "loan".  Pakistan has been facing an economic emergency for a long time. From 2008 to 2023, Pakistan borrowed $129 billion from foreign lenders and during this period, Pakistan paid back $135 billion with interest.  But despite such heavy payments, Pakistan still owes more than 130 billion dollars.

The IMF has estimated in its review report that Pakistan needs 124 billion dollars in the next five years for its economic stability.  Long-term and broad-based projects are needed to get Pakistan's ailing economy back on its feet. But making such long-term plans for an unpopular political government is proving difficult.

On the other hand, fulfilling the strict conditions imposed by the IMF will be no less than a test for the government. The IMF's terms also include a review of the NFC award formula, which could be the most difficult task for the current government.  The expenditure of the provinces will be monitored by the IMF and the approval of the board of the institution will be necessary for the issuance of development programs.  To further tighten financial management, the government will refrain from fixing the prices of food grains itself.  Similarly, the subsidy to the power sector will not be more than one percent of GDP, which may make electricity more expensive. Pakistan will not be able to get additional grants during this IMF program.

Practical steps have to be taken to bring the agricultural sector, real estate and retail sector in the tax net. The IMF has also acknowledged that despite the economic growth indicators, the challenges facing the country remain in place. Business environment is poor, bad governance is the biggest obstacle to economic growth and investment. Instability of political governments, ongoing unrest in the country is a major reason for economic stagnation.

Now the question is what will be the impact of this bailout package on Pakistani economy and common Pakistani. According to experts, Pakistan's economy has been experiencing a negative growth rate in the last three years. Pakistan's economy has been suffering from a slowdown due to a decrease in foreign exchange reserves, an increase in the value of the dollar, a historic rise in the rate of inflation and an increase in interest rates. Industrial units have been suffering due to reduction in productivity and closure of some units has increased unemployment in the country. 

 Therefore, this bailout package will not immediately have any positive impact on the lives of ordinary Pakistanis. Currently, neither the prices of food items will decrease nor will there be a decrease in the daily consumption items. There is no possibility of a large decrease in the value of the dollar, so imported items such as edible oil. And the prices of other essential goods will not decrease. There is also no possibility of a significant reduction in unemployment as the closed industrial units are not likely to run immediately.

 However, if Pakistan implements this economic program properly, within a year, the country's economy will show signs of stability. Inflation, which went up to 38%, has now come down to 6%, so it can be hoped that if these economic policies continue, the purchasing power of the common man will improve by the end of this year. There will also be a significant reduction in the value of the rupee, the price of petroleum products will also see a significant reduction.

 Similarly, due to reduction in interest rate, industrial activities will be promoted and employment opportunities will be created for the common man. May God let us see the day when we are prosperous without debt, the number of people going abroad for employment will decrease. Decent people should prefer to stay here instead of fleeing the country.