IMF: SBA Implementation Crucial for Pakistan’s Economic Future

Julie Kozack, Director of Strategic Communications at the International Monetary Fund (IMF), stated that “steadfast implementation” of the nine-month Stand-by Arrangement (SBA) was vital to Pakistan’s future.

“Steady implementation is critical to address its significant financing needs and assist the most vulnerable,” she said in a statement on Thursday.

The Stand-By Arrangement (SBA) for Pakistan 🇵🇰 comes at a challenging juncture. It aims to stabilize the economy & address the needs of the Pakistani people. Steadfast implementation is critical to address its large financing needs & support the most vulnerable. pic.twitter.com/2BfDQxvih2

— Julie Kozack (@IMFSpokesperson) July 13, 2023

“The SBA is intended to support the authorities’ immediate efforts to stabilise the economy, as well as to ensure that the current balance of payments need is met,” she explained.

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“While it is a relatively short programme, it allows Pakistan to implement critical policies for strengthening its domestic and external economic situation, thereby supporting sustainability.”

“Of course, resolving Pakistan’s structural challenges will almost certainly necessitate longer-term reforms to underpin the necessary economic transformations to strengthen inclusive growth prospects and create an environment conducive to renewed private capital inflows.”

“We at the IMF are always ready to work with Pakistan and the Pakistani government to restore sustainability and economic stability,” she continued.

The IMF agreed a $3 billion rescue package earlier this week to preserve Pakistan from default and put it back on the path of reforms – a trip Islamabad took only after friendly nations connected their assistance to the fund’s agreement.

The IMF Executive Board authorised a nine-month SBA worth SDR2.25 billion (about $3 billion). The sum is equal to 111% of Pakistan’s quota.

“The arrangement comes at a challenging economic juncture for Pakistan,” the IMF stated in a statement released following the board meeting.

The board members criticised Pakistan’s lack of continuity in changes and failing to keep agreements.

According to insiders, the board talks suggested that it was the rulers’ final chance to get their act together. They went on to say that India attempted to derail the performance and finally refrained from voting.

Pakistan has signed its 23rd programme with the IMF. So far, only one programme (2013-16) has been completely completed, and that on the strength of a slew of exemptions from crucial restrictions.