The International Monetary Fund (IMF), in it first “bailout” of an Asian country during the current world financial crisis, approved a 23-month, US $7.6 billion loan to Pakistan last month in order to avert a current accounts crisis and Pakistan’s default on foreign loans. On November 27, the IMF released to Islamabad a first installment of $3.1 billion.
Under its emergency financing mechanism, the IMF has approved more than $40 billion in loans in recent weeks to countries such as the Ukraine, Serbia, and Iceland.
The conditions the IMF is attaching to its loan to Pakistan will severely impact the country’s workers and toilers. They include: eliminating all subsidies on energy, petroleum products, and fertilizer; slashing government spending, including “non-priority” development spending; and raising taxes. Continue reading