International Monetary Fund (IMF) should collaborate with the government of Pakistan to protect the economically disadvantaged by expanding social protection systems and minimizing reforms that may have adverse effects on the most vulnerable population, according to Human Rights Watch.
The country is currently grappling with pressing issues such as inflation, poverty, inadequate governance, limited reserves, and high unemployment. Pakistan initiated discussions with the IMF on February 1st to formulate a plan to revive the economy, including securing the ninth tranche of $1.1 billion in loans from the $6.5 billion bailout.
“Millions of Pakistanis have been pushed into poverty and denied their fundamental social and economic rights,” said Patricia Gossman, associate Asia director at Human Rights Watch.
In addition, she emphasized that the IMF and the Pakistani government have a duty to manage this crisis in a manner that prioritizes and safeguards the well-being of low-income individuals.
According to data from the State Bank of Pakistan (SBP), foreign exchange reserves have reached their lowest level at $3.09 billion, a decrease of 16%, sufficient to cover less than three weeks of imports.
Pakistan is currently experiencing its highest inflation rates since 1975, with the cost of perishable food items rising by over 60% in January. In response to IMF demands, the government of Pakistan recently raised prices of petrol and diesel by Rs35 and removed the cap on the dollar, as it was a crucial condition of the IMF and the dollar should be market-driven.
The ongoing negotiations with the International Monetary Fund (IMF) are aimed at concluding the ninth review of the IMF’s Extended Fund Facility, designed to support countries facing balance-of-payments challenges.
The completion of this review would provide the necessary clearance for the IMF’s bailout installment, which would alleviate the severe shortage of foreign exchange and enable access to additional funding sources, including from multilateral and bilateral donors.
