IMFapproves $131 million final loan tranche to Pakistan



by Ahmed Mukhtar

27th September, 2001.

The International Monetary Fund (IMF) has approved last tranche of $ 131 million of total $ 596 million Stand-By Arrangement (SBA) in its Board meeting held on Wednesday night in Washington. The SBA was approved in November last for 10 months by the end of ongoing September. The final tranche was approved without any hesitation by the Executive Board of the Fund.

It was the first programme of the Fund the country has completed in its history. Earlier, it was known as a one-tranche country, because after getting first release it used to derail from the conditions agreed with the Fund.

Pakistan has been able to win US favour after announcing it co-operation against terrorism. International community was also favouring the country. Pakistan was also cheered of its performance under SBA in implementing its reforms.

Now Pakistan would move ahead for second round of negotiations on Poverty Reduction and Growth Facility (PRGF) on October 09 in Washington with the IMF management where Finance Minister Shaukat Aziz is leading a delegation.

However, a recent statement of Anne Krueger, First Deputy Managing Director of the IMF about a very small amount of the PRGF would be a real question for the country's authorities during the discussions. The finalisation of the medium-term PRGF is expected by the year-end says a government official.

Pakistan is facing tough tasks ahead with huge debt burden and decreasing aid from countries it is even cooperating at the cost of its economy now a days.

.Anne Krueger before the approval said, "Pakistan, I think for the first time ever, completed its programme with the Fund on time and meeting all conditions. And, actually, that paper came across my desk before September 11th. So Pakistan was already in shape because they'd been performing well to consider entry into a Poverty Reduction and Growth Facility programme, which, as you know, supports the longer-term issues, policy reforms that will be conducive to a higher growth rate in the longer run".

.She also said, "So we were already on track to look favourably upon a proposal for such a programme for Pakistan. That is still forth--that is still an ongoing process, and so far, as I said, because it so happens that they were already fortuitously there or fortuitously at least from this viewpoint of timing, basically we are on track to go ahead with that".

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