The ongoing meetings between a Pakistani delegation, led by Federal Finance Minister Ishaq Dar, and International Monetary Fund (IMF), have shown bleak prospects for the country’s financial health, if the leaks from the meetings are to be examined. Soon after assuming the charge, Mr Dar took several remedial steps to improve the economy. He decreases the prices of petroleum products to provide relief to the public and brought down the value of the dollar to an extent. These measures, however, were looked down upon by the IMF quarters. In this connection, Mr Dar met with the officials of international financial institutions to get Pakistan out of the serious financial crisis. In a meeting with staffers from the International Monetary Fund and the World Bank, Ishaq Dar described the destruction caused by floods in Pakistan and addressed the government’s long-term objectives to stabilise the country’s economy. His sole goal is to enlist the IMF’s assistance in getting Pakistan out of its current predicament. The IMF must be flexible on the terms of earlier this year’s agreed deal. No one could have foreseen the degree of damage wrought by the floods within months back then. During a meeting with World Bank President David Malpass, Ishaq Dar thanked the World Bank for monetary assistance in the aftermath of the floods in Pakistan.
The World Bank has vowed to continue working with the government of Pakistan to address social and economic concerns in the future, while the IMF will send a team to Pakistan in November for the next assessment of the present programme. It should be mentioned that the IMF has increased the size of the current programme in response to the recent flood catastrophes in Pakistan. In addition, teams from the World Bank and the United Nations Development Programme are now inspecting the flood damage, and the IMF is expected to offer flexibility on terms following their findings. Based on their findings, statistics will be collated, priorities will be established, and Pakistan’s aid policy will be developed. The IMF is worried about public and specific sector subsidies, which it regards as a waste of resources. To some extent, the IMF’s position is correct that broad subsidies do not work; instead, targeted subsidies should be implemented since focusing valuable resources on satisfying the needs of the poor can provide them with immediate relief. In the meantime, the government should focus on combating inflation.