Lahore, Pakistan – In a significant development for the struggling Pakistani economy, the government has successfully reached a staff-level agreement (SLA) with the International Monetary Fund (IMF) on a stand-by arrangement (SBA). Prime Minister Shehbaz Sharif hailed his meeting with IMF Managing Director Kristalina Georgieva in Paris as a “turning point” for Pakistan, signalling a ray of hope amidst economic challenges.
Prime Minister Shehbaz Sharif, accompanied by Finance Minister Ishaq Dar, Information Minister Marriyum Aurangzeb, and Punjab Governor Baligh Ur Rehman, addressed the nation in a press conference following the signing of the SLA in Lahore. The Prime Minister revealed that he held two crucial meetings with the IMF chief on the sidelines of the Summit for a New Global Financial Pact in Paris. During these discussions, Georgieva assured Pakistan that the IMF did not want the country to default.
“The IMF MD said we will move forward, you also move ahead,” said Prime Minister Shehbaz. He also mentioned the support received from Sri Lankan President, who appealed to the IMF MD to save Pakistan. The Prime Minister dismissed the concerns of those comparing Pakistan to Sri Lanka and emphasized that the risk of default had been averted with the signing of the stand-by agreement.
Prime Minister Shehbaz acknowledged the collective effort made by the coalition government to ensure Pakistan’s financial stability. He praised Finance Minister Ishaq Dar for his hard work and mentioned that even Foreign Minister Bilawal Bhutto-Zardari had approached the IMF chief to seek assistance for Pakistan. The Prime Minister emphasized that resolving such complex issues required a team effort and no individual could accomplish it alone.
While expressing gratitude to countries like Saudi Arabia, the United Arab Emirates (UAE), and China for their support in securing loans, the Prime Minister underscored that loans were not a sustainable way for nations to progress. He called upon the nation to reflect on the fact that countries do not succeed solely by taking loans and urged everyone to pray that the current SBA would be the last IMF program that Pakistan would require.
The Prime Minister acknowledged the sacrifices made by the common people over the past 75 years and pledged to bring about economic transformation. He highlighted the upcoming period of austerity, assuring the public that the burden would be borne by the elite rather than the ordinary citizens. Additionally, the Prime Minister promised to attract investments from Gulf countries in various sectors such as agriculture, minerals, IT, and small enterprises.
Finance Minister Stresses Fiscal Discipline
Finance Minister Ishaq Dar, speaking after the Prime Minister, emphasized the importance of fiscal discipline to address the country’s economic challenges. He highlighted the efforts made in the past 10 days to convince the IMF and mentioned that the SBA duration had been targeted for nine months. Minister Dar stated his belief that Pakistan is not a country that defaults and that they had contingency plans in place even without IMF assistance.
“We have to recover from the destruction that took place. Crying will not help,” said Finance Minister Dar. He stressed the need for Pakistan to live within its means, as the country had spent more than its resources in the past five years. Dar likened fiscal discipline to democracy, stating that both were crucial for the country’s progress.
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The SLA with the IMF brings some respite to Pakistan, which has been facing an acute balance of payments crisis and dwindling foreign exchange reserves. With inflation at
an alarming level and reserves sufficient for only a month of controlled imports, the agreement offers hope for stabilizing the economy and avoiding a potential debt default.
In line with the government’s Economic Revival Plan, which aims to reduce reliance on loans, Pakistan will focus on enhancing investment in agriculture, mining, and information technology, and boosting exports. The successful conclusion of the SLA reflects the government’s commitment to bringing about economic transformation and ensuring a brighter future for the people of Pakistan.
As Pakistan awaits approval from the IMF’s Executive Board, the nation remains hopeful that the agreement will mark a turning point in its economic journey, leading to sustainable growth and prosperity.
