ISLAMABAD: Pakistan’s decision to swallow the bitter pill of a tough IMF programme to unlock assistance from other international lenders is not proving feasible as the World Bank delayed the approval of a $1bn loan until Islamabad implements conditions in the energy and taxation areas.
The two development policy credits, each worth $500m, were expected to be approved by the Board of Directors of the Washington-based lending agency before the end of this calendar year, according to sources in the Ministry of Finance. These credit lines were named Jobs and Growth programme and Power Sector Reforms programme.
Unlike project loans that are disbursed over the project’s lifespan, these policy credits are disbursed upfront in a single tranche to strengthen the borrowers’ reserves and provide an amount for covering the budget deficit.
Officials said the government had estimated to receive the two loans in December in a hope to strengthen the fast-dwindling foreign currency reserves of the State Bank of Pakistan that have plunged to $4.299bn, insufficient to finance one month’s import bill. internews