Pakistan’s yet another stream of funds is under attack amid the ongoing economic crisis, with the Republican Presidential candidate Nikki Haley slamming the government for funding ‘bad guys’, and vowing not to let the US become the world’s ATM. While attacking the current regime claiming that America is paying millions to the ‘bad guys’. She tweeted, “A weak America pays the bad guys: Hundreds of millions to Pakistan, Iraq, and Zimbabwe last year alone. A strong America won’t be the world’s ATM.”
She also said that she plans to cut foreign aid to these countries, if she becomes president. In another tweet, Haley said, “As president, we’ll make sure to shake up the foreign policy establishment,” while calling Pakistan a home to ‘at least a dozen terrorist organizations’. Earlier in February, External Affairs Minister S Jaishankar had, in reference to Pakistan, said no country can come out of its problems and emerge prosperous if its “basic industry” is terrorism.
Pakistan’s dependence on big brother US for funding
Pakistan’s dependence on external financial help is not new and the country has been seeking these aids to bail the country out from economic and liquidity crises. Over the past twenty years, the US has provided more than $32 billion in direct support to the people of Pakistan. Most recently, it announced an additional aid of $100 million to Pakistan for its recovery and reconstruction efforts after last year’s flood, according to the US Embassy data.
In 2009, US Congress
The last resort, IMF disbursal
In the current situation, while Pakistan was betting on the IMF package of $6.5 billion, the delays in the disbursement last November have only added to the country’s woes. In February, the Pakistan government and the IMF staff had concluded the ninth review of the bailout package, which was to bring $1.1 billion to Pakistan in the form of the next tranche. The two parties, however, failed to reach an agreement.
The crisis-laden government is racing against time to implement tax measures and reach an agreement with the IMF. If the IMF disburses the loan, it will not only help the country with the much-needed funds, but will also help secure inflows from other friendly countries.
Economic crisis worsens in Pakistan
In the most recent development, Pakistan agreed to increase the policy interest rate by 2 per cent or 200 basis points from 17 per cent to 19 per cent, a report by The Express Tribune said. Pakistan’s net foreign exchange reserves fell to around $3.2 billion in February, which, the IMF said, can cover just about three weeks of imports for the country.
Pakistan is taking several austerity measures: it has cut government employees salaries; number of foreign missions; staff numbers; it expects half of the cabinet members to work without any salary, and others to take a 15 per cent cut. Pakistan Finance Minister Ishaq Dar has announced a cut in the price of petrol, kerosene oil and light diesel oil, to pass on a fall in global prices to consumers.