Kristalina Georgieva, managing director of the International Monetary Fund (IMF), has pleaded with Pakistan to take the necessary 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 broadcaster Deutsche Welle. The announcement follows Pakistan and the international lender’s inability to restart a $6.5 billion bailout package that had stalled by failing to reach a staff level agreement within the allotted time. However, both parties came to an agreement on a number of steps that can still help seal the deal and avert an impending default. The Pakistani government had hoped to persuade the IMF of its good intentions in order to implement all outstanding conditions in a gradual manner. But the hopes were dashed during the 10-day visit by the IMF mission, which ended on February 9 without a staff level agreement.
At the Munich Conference, Georgieva provided more information about the measures that the international lender anticipates the Pakistani government to put in place. “We are emphasizing two things, and I want to emphasize that. The first is tax receipts. She made reference to the IMF’s requirements for the revival of the stalled bailout package when she said, “Those who can, those who are making good money, they need to contribute to the economy.” The IMF director continued, “Second, to have a fairer distribution of the pressure by shifting subsidies only towards the people who really need them.” It shouldn’t be the case that only the wealthy receive subsidies, she emphasized, adding that targeted subsidies must be implemented. The people who should profit from them are the poor.
‘The Fund is very clear that we want the poor people of Pakistan to be protected,’ she added.
“My heart goes to the people of Pakistan,” said Georgieva, acknowledging that Pakistan was devastated by unprecedented floods in 2022 which affected over one-third of its population.
