Beyond the IMF

Pakistan’s staff-level agreement with the IMF for its next disbursement is an important step towards economic stability. Subject to Executive Board approval, the agreement will unlock approximately $1.2 billion, providing breathing room for an economy still pursuing the growth needed to meet its considerable debt obligations.

Beyond immediate financial relief, each successful review also serves as an assessment of Pakistan’s economic management. The Fund’s scrutiny of fiscal discipline, inflation, energy reforms and public finances imposes a degree of accountability. That Pakistan has remained broadly on track is encouraging, even if compliance must never be confused with prosperity.

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More encouraging is the recognition of Pakistan’s climate vulnerabilities through the Resilience and Sustainability Facility. Recurrent disasters, unpredictable weather and limited resources have placed enormous pressure on the country. Pakistan contributes little to global emissions yet faces disproportionate consequences. It needs external financial and technical support to strengthen resilience, and this recognition must translate into meaningful assistance.

However, these disbursements are a means to an end, not an achievement in themselves. Pakistan cannot indefinitely borrow to preserve stability while hoping that future growth will somehow settle its obligations. The space afforded by the programme must be used to expand exports, strengthen domestic industry, improve revenue collection and address the structural weaknesses that repeatedly push the country towards external financing. Both fiscal discipline and investment in productive capacity will determine whether recovery lasts.

Successive governments have treated IMF programmes as emergency lifelines, only to return when the next crisis arrives. This cycle must end. The government deserves credit for maintaining stability and securing international support, but its true accomplishment will be building an economy capable of standing without the Fund.

An IMF programme should be a bridge towards economic independence, not a permanent crutch.

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