Back'We are not beggars', Pak official says IMF making it tough to give loan
Pakistan: Millions of Pakistanis have found that their purchasing power eroded due to the ongoing economic crisis, while many even struggling to fulfill their basic needs.
PremiumPakistan and the International Monetary Fund (IMF) are locked in a debate over an unfinished loan program required for the ongoing economic crisis. The government has been trying hard to fulfill all its demands to unlock the USD 1.1 billion bailout package. However, the officials reveal that the administration is quite nervous as it finds it difficult to convince the global lender for the funds.
According to a report by Pakistan-based media outlet Dawn, the Pakistani authorities are now annoyed at the current situation. A senior official even said, “We are members of the IMF, not beggars, or else our membership be discarded."
“The IMF wanted to support the poor, but what measures it had been insisting us to impose would ultimately hit the lower-income segment," another official said as quoted by the outlet.
There are four items included in the unfinished IMF loan program agenda---early hike in the central bank’s interest rate, exchange rate movement to cater for outflow to sanction-hit Afghanistan, written assurances for external financing gap from friendly nations, and the continuation of ₹3.39 per unit financing cost surcharge on electricity consumers for coming years through the finance bill, according to Dawn.
As a result of these four conditions, Pakistan's central bank has increased the interest rate by 300 basis points (bps) to 20 percent — the highest level since October 1996. The decision was taken by SBP in its monetary policy committee meeting on March 2.
The government also surrendered to the last IMF demand and imposed a surcharge of ₹3.23 per unit on electricity consumers across the country. The surcharge will come into effect from July 1, according to a media report on Thursday.
Meanwhile, Human Rights Watch stated that Pakistan is struggling with one of its worst economic crisis in history, jeopardizing millions' rights to health, food, and an adequate standard of living.
It suggested that the Pakistani government and IMF should address the crisis in a way that protects low-income people, as per Dawn reports.
Millions of Pakistanis have found that their purchasing power eroded due to the ongoing economic crisis, while many even struggling to fulfill their basic needs. Pakistan's weekly inflation has surged above 40%, and monthly inflation jumped to 31.6% in February year-on-year.
Prices rose at the fastest pace ever in the country's history last month, according to available data, with food, beverage, and transport costs driving inflation to a point where analysts fear "families will have to make choices and sacrifices.
Imam Ali, a 55-year-old security guard in Karachi’s FB Area said, “We are now solely reliant on God. We cannot make ends meet. We make excuses if our children ask for something. If we eat one meal in a day, the second one becomes hard to manage…"
He complained that his income has not changed for the past three years, despite the rising inflation and skyrocketing prices.
The country's industry is bracing itself for cuts in production and workforce, especially in the textile sector after it witnessed at least 14.8% decline in textile exports.
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