US President Joe Biden has proposed to double the economic support fund to crisis-hit Pakistan to USD 82 million for fiscal 2024 to help its recovery from devastating floods, diversify the energy supply, and support activities to build emergency preparedness capabilities.
The US State Department said that assistance to Pakistan will expand private sector economic growth, strengthen democratic institutions, and advance gender equity and women's empowerment.
The budget proposes to give Pakistan USD 82 million for fiscal 2024, beginning in October, under the Economic Support Fund category. The support was USD 39 million in 2022.
Pakistan is also proposed to receive USD 17 million under the international narcotics and law enforcement category and another USD 3.5 million under the international military education and training category, as per PTI reports.
The administration has also proposed USD 32 million to Pakistan under the global health program category by the US Agency for International Development (USAID).
Pakistan and the IMF deal
Currently, the debt-trapped Pakistan government is in a race against time to implement measures to reach an agreement with the International Monetary Fund (IMF) as the country reportedly has reserves barely enough for over one month of essential imports.
The agreement with the IMF on the completion of the ninth review of a USD 7 billion loan Extended Fund Facility program — which has been delayed since late last year over a policy framework — would not only lead to a disbursement of 1.2 billion but also unlock inflows from friendly countries.
The financial body even announced that it will temporarily increase funding limits for member nations to help them overcome current financial challenges, at the same time, it is still locked over an unfinished loan program required for the ongoing economic crisis in Pakistan.
The government has also increased tax rates, policy interest rates, cut ministers' expenses, etc to meet all demands laid by the IMF to unlock the next tranche of $6.5 billion bailout package.
US encourages Pakistan to continue working with IMF
The United States on Thursday urged crisis-hit Pakistan to improve its business environment which would make the South Asian country more attractive and competitive around the world. According to the State Department, Pakistan is a country with tremendous potential, and the US has partnered with it.
State Department Spokesperson Ned Price said that Pakistan has encountered economic headwinds of late, while the citizens are facing record levels of inflation.
"This comes on the back of the extensive flooding through parts of the country. And it has only put a spotlight on our need to continue to work together to help the Pakistani people to help put themselves on a sustainable economic path and a durable path to the prosperity that we seek for the Pakistani people," he said.
He further said the US encourages Pakistan to continue working with the IMF, especially on reforms that will improve Pakistan's business environment. “We know that doing so will ultimately make Pakistani businesses more attractive and competitive around the world."
