The International Monetary Fund (IMF) issued a letter of intent (LOI) for the revival of the Extended Fund Facility (EFF) early Friday, according to Finance Minister Miftah Ismail. The executive board is set to convene a meeting on August 29 to approve the bailout package, including the immediate disbursement of $1.8 billion considering that the country had met all the requirements put forth. This will grant Pakistan a much needed breather, but one that must be utilised wisely.

The IMF publicly acknowledged the progress Pakistan made and linked the approval of the revival as well as the disbursement of $1.8 billion to confirmations provided by Saudi Arabia, the UAE, Qatar and China regarding the completion of the $4 billion in bilateral financing by friendly nations. Much of the economic relief we will experience will be because of such allies and it is the duty of the government to pay homage to them by regaining economic equilibrium after the disbursement.

Ever since this announcement, there has been a positive change in the country’s economic environment. The rupee appreciated in value, the stock market showed signs of robust activity and even inflation experienced a marginal decline of 0.08 percent. There is no denying that we are still in the thick of it but these developments allude to the possibility of recovery. Of course we have achieved all this through taking some tough decisions that brought upon endless hardships for the public and caused some disillusionment. However, the circumstances demanded for such steps to be taken and everything will come to fruition once the EFF is fully resumed.

We are at a pivotal point in time when the IMF programme will undoubtedly allow the country to bridge its external financing gap but without consistent efforts to enhance economic performance, we may approach another default-like situation. Progress will only be sustained if we continue to maximise external inflows and expand domestic revenue by enacting diverse yet informed fiscal policies. The disbursement of funds cannot be hailed as the ultimate solution and if we are to achieve a prosperous future, we must make decisions that lead to reinvestment in the country.