Federal Finance Minister Ishaq Dar and Adviser International Monetary Fund (IMF) Jeffrey Franks on Thursday struck a loan agreement worth $5.3 billion in favour of Pakistan.
In a press conference, Dar applauded the role of the IMF official in negotiating the deal with Pakistan and said, “We are entering into a fresh program with IMF to not only retire past liabilities but also to bring about structural reforms in the country.”
“We have successfully agreed over a program that is home-grown and consistent with the new government’s policies,” Dar asserted.
Detailing the loan agreement, Franks said that this is a program which is being supported as part of IMF Extended Fund Arrangement.
“Worth $5.3 billion, the program will carry a floating interest rate of 3% and would be payable over a longer period than conventional arrangements to facilitate Pakistan in repaying the loan,” Franks explained.
Confirming Dar’s earlier assertion that the loan agreement was “home-grown”, Franks said that it is a Pakistan designed and built program.
“The government has developed plans to improve tax collections through improved administration and through a mechanism to eliminate loopholes in the coming years,” Franks said, adding that the difficult decisions have already been made.
“The agreement has been reached with Pakistan’s business climate in mind and will serve to bring about the much needed restructuring in Pakistan’s economy,” he maintained.
Franks said he hoped that this announcement of support from IMF would encourage other development partners to extend a helping hand to Pakistan.
“The crisis we are facing today is because of the fiscal indiscipline that was practiced over the last few years,” Dar added.
Bringing the press conference to a close, the finance minister said “We are not begging. We are members of IMF.”