Pakistan among the beneficiaries of the IMF-WB initiative – Journal
WASHINGTON: Pakistan is among the main beneficiaries of an initiative by the International Monetary Fund (IMF) and the World Bank to help emerging economies cope with the negative impact of the Covid-19 crisis.
Data released by the two financial institutions show that Pakistan is receiving $ 1,386 million from the IMF’s Quick Credit Facility (RCF). Pakistan’s request for assistance to the FCR was approved on April 16, 2020 and Islamabad began to receive support from this facility soon after approval.
Pakistan is also supported by a World Bank program known as the Debt Service Suspension Initiative (DSSI). Between May and December 2020, Pakistan saved $ 3,645.4 million thanks to the support of this program, which represents 1.3% of its GDP.
Between January and June 2021, Pakistan will save around $ 2,487.8 million, or 0.9 percent of its GDP.
Carmen Altenkirch, sovereign emerging markets analyst at Aviva Investors, told Reuters news agency that Pakistan, Zambia, Pakistan, Argentina and Bahrain were the main beneficiaries of the programs.
Pakistan and Angola would benefit the most from the extension of the DSSI.
“Pakistan is a prime example of a country that could have failed,” without the support, she said. But she and other experts have warned that it will not solve the underlying problems of countries with high debt and rising interest charges.
The Reuters article noted that debt experts, charities and investors on Wednesday welcomed the news that the world’s poorest countries would get new IMF funds and debt relief from Covid-19. But they also warned that for some it would still only be a quick fix.
A new allocation of $ 650 billion of IMF quasi-currency known as Special Drawing Rights (SDRs) will provide more than $ 20 billion in financing, while an extended holiday on loan repayments from rich countries of the G20 will temporarily save an additional $ 7 billion. Those who experience the most severe stress will receive the greatest benefit. Zambia’s share of handouts – SDRs are allocated roughly according to the size of economies – will double its international reserves.
An IMF note on Pakistan showed that under the burden of Covid-19, the country’s economic activity has deteriorated significantly, with growth tentatively estimated at minus 0.4% for fiscal 2020. A gradual recovery is expected for fiscal year 2021.
Pakistan has also asked UN Covax to cover 20% of the adult population (102 million doses, $ 340 million), including frontline workers (15 million doses, $ 91 million) and adults over 65 (22 million doses, $ 131 million).
At the end of January 2021, Covax / Gavi confirmed the allocation of 17.2 million doses of AstraZeneca vaccine to Pakistan, of which 6 million doses were due to arrive in Pakistan by mid-March, and the rest by June 2021 There are reportedly shipping delays associated with exporting the vaccine from India where AstraZeneca is manufactured. Pakistan has so far received 1 million doses of Sinopharm donated by China.
Posted in Dawn, le 8 April 2021