Kristalina Georgieva, managing director of the International Monetary Fund (IMF), has pleaded with Pakistan to take the required actions “to be able to function as a country” and avoid “getting into a dangerous place where its debts need to be restructured.”
At the Munich Security Conference, she made this statement while speaking to German channel Deutsche Welle.
The announcement follows Pakistan and the international lender’s inability to restart a $6.5 billion bailout plan that had stopped by failing to obtain a staff level agreement within the allotted period.
Pakistan is confronting an acute economic crisis and seeking IMF help. The Fund’s chief Kristalina Georgieva speaks to DW at the Munich Security Conference. pic.twitter.com/0VLZHlyL2W
— DW Asia (@dw_hotspotasia) February 17, 2023
Yet, both parties came to an agreement on a number of steps that can still assist seal the deal and avert an impending default.
The Pakistani government had hoped to persuade the IMF of its good intentions in gradually putting all outstanding criteria into effect.
Nevertheless, the IMF mission’s 10-day visit, which ended on February 9 without a staff level agreement, crushed those aspirations.
IMF Chief’s Advice To Govt. of Pakistan
At the Munich Conference, Georgieva provided more information about the steps that the international lender anticipates the Pakistani government to put in place.
“I want to stress that we are emphasizing two things. Number 1: tax revenues. Those who can, those that are making good money, they need to contribute to the economy,” on the IMF’s requirements for reviving the delayed bailout package, she remarked.
“Secondly, to have a fairer distribution of the pressure by moving subsidies only towards the people who really need it,” the IMF chief added.
In order to introduce targeted subsidies, she emphasized the need by saying, “It should not be like the wealthy benefit from subsidies. It should be the poor who benefit from them”.
‘The Fund is very clear that we want the poor people of Pakistan to be protected,’ she added.
Georgieva acknowledged that Pakistan was ravaged by enormous floods in 2022, which impacted more than one-third of its population. She said, “My heart goes out to the people of Pakistan.”
To read our blog on “PAK & IMF likely to reach a staff-level accord by next week,” click here.
