International Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged Pakistan to take necessary steps “to be able to function as a country” and avoid “getting into a dangerous place where its debts need to be restructured”.
She said this while speaking to German broadcaster Deutsche Welle at the Munich Security Conference.
Pakistan is confronting an acute economic crisis and seeking IMF help. The Fund’s chief Kristalina Georgieva speaks to DW at the Munich Security Conference. pic.twitter.com/0VLZHlyL2W
— DW Asia (@dw_hotspotasia) February 17, 2023
The statement comes days after Pakistan and the global lender failed to reach a staff level agreement within the stipulated time to revive a stalled $6.5 billion bailout package. However, both the sides agreed on a set of measures that can still help clinch the deal to avoid a looming default.
Pakistani authorities had hoped that they would convince the IMF about its good intentions regarding implementation of 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.
Also read: IMF talks end without staff level agreement
Speaking at the Munich Conference, Georgieva gave more details of the measures that the global lender is expecting the Pakistan’s government to ensure.
“I want to stress that we are emphasising two things. Number 1: tax revenues. Those who can, those that are making good money, they need to contribute to the economy,” she said, referring to the IMF’s conditions for the revival of the stalled bailout package.
“Secondly, to have a fairer distribution of the pressure by moving subsidies only towards the people who really need it,” the IMF chief added.
She emphasised the need for introducing targeted subsidies, saying, “It should not be like the wealthy benefit from subsidies. It should be the poor who benefit from them”.
‘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.