In the first quarter of this year alone, Pakistan received $1.82 billion (Rs 1.63 lakh crore) via foreign loans, grants and investments.<\/p>\n
Most of this money isn\u2019t being put towards building Pakistan. Instead, it goes to:<\/p>\n
Servicing foreign debt<\/p>\n
Boosting foreign exchange reserves<\/p>\n
Paying for fuel, food and medicine<\/p>\n
Which lenders are supporting Pakistan?<\/p>\n
Pakistan got $807.64 million (Rs 0.73 lakh crore) in bilateral loan<\/a>s and grants, and $1.26 billion (Rs 1.13 lakh crore) in multilateral loans and grants. China contributed $119.77 million (Rs 0.11 lakh crore) in guaranteed loans, while Saudi Arabia provided $500 million (Rs 0.45 lakh crore).<\/p>\n Multilateral groups also helped out, with the Islamic Development Bank (IsDB) giving $383 million (Rs 0.34 lakh crore), and the Pakistan also received $27.17 million (Rs 0.02 lakh crore) in bilateral grants, with support mainly from China, Japan and Saudi Arabia. Islamabad also received another $26.98 million (Rs 0.02 lakh crore) in multilateral grants from the IBRD and IDA.<\/p>\n Saudi Arabia and China also gave Pakistan $9 billion (Rs 8.08 lakh crore) in term deposits, with the Kingdom handing over $5 billion (Rs 4.49 lakh crore) and Beijing making up the remaining $4 billion (Rs 3.59 lakh crore).<\/p>\n STORY CONTINUES BELOW THIS AD<\/p>\n Islamabad also received around $966 million (Rs 0.87 lakh crore) from Naya Pakistan Certificates from Pakistanis overseas. Multilateral grants are projected to hit $63.72 million (Rs 0.06 lakh crore), and loans are estimated to touch $5.04 billion (Rs 4.53 lakh crore) this financial year.<\/p>\n IMF at the heart of it all<\/p>\n Interestingly, the aforementioned figures<\/a> do not include funds from the International Monetary Fund (IMF), which are placed in another column on the balance sheet of the State Bank of Pakistan.<\/p>\n The body recently approved $1.2 billion (Rs 1.08 lakh crore) for Islamabad \u2014 $1 billion (Rs 0.90 lakh crore) under its Extended Fund Facility and $200 million (Rs 0.18 lakh crore) under its Resilience and Sustainability Facility. The IMF has allotted $3.3 billion (Rs 2.96 lakh crore) for Pakistan under these two programmes alone.<\/p>\n Nevertheless, Pakistan remains heavily indebted to the IMF. Since 1958, the body has bailed out Pakistan nearly two dozen times, to the tune of tens of billions of dollars. STORY CONTINUES BELOW THIS AD<\/p>\n But the IMF gives Pakistan more than just cold, hard cash.<\/a> Instead, it stands as a symbol for other lenders that Pakistan is creditworthy.<\/p>\n However, the IMF too has made demands of Pakistan in order to keep lending it money.<\/p>\n These include:<\/p>\n Pakistan, which is under pressure to comply with these diktats, is now trying to sell off its loss-making state companies.<\/p>\n For example, the government has now agreed to sell a majority interest in Pakistan International Airlines (PIA). The PIA, which was once one of the world\u2019s top airlines, has been left in the red after years of mismanagement. The government has agreed to sell a majority stake in the national carrier for around $480 million (Rs 0.43 lakh crore).<\/p>\n Unfortunately, while this may raise quick cash, it leaves the bigger structural reforms unaddressed.<\/p>\n What do experts say?<\/p>\n They say the fundamentals of Pakistan\u2019s economy remain unchanged. Pakistan\u2019s exports remain few and its goods of low value, tax avoidance is rife, state energy firms face issues with theft and unpaid bills, and reforms are difficult to pass because of political instability.<\/p>\n As Bolormaa Amgaabazar, the World Bank\u2019s country director for Pakistan, said, \u201cPakistan\u2019s path to inclusive, sustainable growth requires mobilising more domestic resources and ensuring they are used efficiently and transparently to deliver results for people.\u201d<\/p>\n Tobias Akhtar Haque, World Bank lead country economist for Pakistan, said strengthening Pakistan\u2019s fiscal foundations was \u201cessential to restoring macroeconomic stability, delivering results and strengthening institutions\u201d.<\/p>\n STORY CONTINUES BELOW THIS AD<\/p>\n Experts say Pakistan cannot keep relying on the IMF in the long term and that a credible roadmap is needed. For now, Pakistan is surviving on foreign largesse.<\/p>\n With inputs from agencies<\/p>\n Home<\/a>Explainers<\/a>How \u2018bankrupt\u2019 Pakistan stays afloat on foreign loansEnd of Article<\/p>\n","protected":false},"excerpt":{"rendered":"Pakistan is bankrupt in all but name. 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\nWorld Bank\u2019s International Development Association (IDA)<\/a> ponying up $343.15 million (Rs 0.31 lakh crore).<\/p>\nBeijing gave Pakistan $4 billion (Rs 3.59 lakh crore) in term deposits to shore up its foreign reserves. Reuters<\/p>\n
Since 1958, the body has bailed out Pakistan nearly two dozen times, to the tune of tens of billions of dollars. Reuters<\/p>\n
\nThe IMF also helped Pakistan avoid default in 2023.<\/a> Pakistan secured a $7 billion (Rs 6.28 lakh crore) bailout programme from the IMF last year amid an economic crisis. It was also granted a new $1.3 billion (Rs 1.17 lakh crore) climate resilience loan in March.<\/p>\n