Amid the ongoing gloom and doom due to coronavirus pandemic, it is hard to even imagine any temporary relief and glad tiding. Global trade is expected to fall by one third and the world is in the midst of a global recession and Pakistan’s economy is a severe crisis.
Pakistan faces a sigh unexpected relief when it was given a five-month grace period by the Financial Action Task Force (FATF) to submit its performance report against money laundering and terror financing mechanism. The review on the remaining thirteen points of the action plan planned for June has now been postponed until October.
The delay has been caused by the global pandemic but it has given Pakistan an opportunity to remove all outstanding deficiencies. Pakistan was already given a grace period of four months in February after missing on several targets. It risks being placed a blacklist which would trigger economic sanctions and stop trade. The government claims it was making progress and now it has been more time for remedial measures.
Another relief came on the economic side as the IMF approved $1.4 billion loan which will be provided as early as next week amid the pandemic. The global financial institution said the budgetary support will boost foreign reserves in wake of the economic slowdown. Pakistan had requested the international lender to give a low-cost, fast-disbursing loan amid the Rapid Financing Instrument (RFI) formed to deal with the economic consequences of the coronavirus pandemic.
This could increase the burden of foreign debts as Pakistan has already sought a bailout package from the IMF but under the temporary circumstances, even temporary relief will go a long way. The government has announced a massive Rs1200 billion relief package, which is one of the largest in history and will need the much-needed financial resources to boost its economy.
Pakistan certainly needs enough financial resources to deal in these difficult times. The IMF has deferred the approval of the $450 million trance as part of the bailout package. Many developing countries are seeking to delay loan payment and Pakistan should take advantage of the situation. More than eighty countries have appealed to the IMF seeking additional funds showing the gravity of the situation.
Pakistan has received two unexpected concessions which should be a sigh of relief. The World Bank and ABD has approved separate financing schemes for Pakistan. It is imperative that these are used for pandemic relief measures to strengthen thn economy and withstand the adverse the adverse consequences.