Webdesk: US Congressman Al Green encouraged the Joe Biden-led government to “provide aid” to Pakistan through the IMF. As well as World Bank as Pakistan struggles with the effects of rapidly decreasing foreign exchange reserves.
Pakistan is a climate change case study, Green told Congress Finance Committee.
“As you know, Pakistan suffered greatly from the June 2022 floods. “If you could use your good offices to help Pakistan, it clearly needs IMF and World Bank aid,” he remarked.
The US legislator remarked that while the US denies global warming, Pakistan suffers. Pakistan suffers despite emitting 1% of global greenhouse emissions while we emit over 10%. He requested officials to help.
South Asia is trying to save an IMF loan program from default. Columbia Threadneedle Investments estimates that Pakistan will pay $22 billion in external debt in 2024, five times its reserves.
Pakistan’s $1.1 billion IMF loan, part of the 2019 $6.5 billion Extended Fund Facility, has delayed since November.
“We’re supportive of the IMF’s work in Pakistan and theres a programme thats helping them deal with the devastation from the floods and their pre-existing fiscal and monetary problems,” said US Secretary of the Treasury Janet Yellen in response to Green’s request.
Pakistani-American diplomat Tahir Javed met Green a few days earlier
Javed informed him that the coalition government had presented the budget with limited foreign exchange reserves during the meeting. The administration will struggle to meet 2023-24 budget commitments.
The Pakistani-American official advised the US to pressure the IMF to release the South Asian nation’s delayed tranche.
Pakistan, home to 250 million, is straining to satisfy the Fund on three counts, starting with a June 9 budget before its board reviews whether to release at least some of the $2.5 billion left pending under a credit programme expiring this month.
The Washington-based lender has raised serious objections over the budgetary framework for 2023-24 and asked the government to increase both tax and non-tax revenues, Ministry of Finance officials told the Senate Standing Committee on Finance and Revenues on Tuesday, The News reported.
A senior Ministry of Finance official told the committee that the IMF was not satisfied with the budgetary framework for 2023-24, so they would have to defend increasing the petroleum development levy to Rs869 billion for the next fiscal year from revised estimates of Rs542 billion.
Pakistan’s IMF-EFF bailout expires June 30.
