There might be some economic relief on the horizon as the IMF) is now saying that it would consider a request from Islamabad for financial assistance to help combat the impact of the Covid-19 coronavirus pandemic on the economy. Pakistan had asked for assistance under the IMF’s Rapid Financing Instrument (RFI) facility to help enhance foreign exchange reserves and allow for some budgetary support.
The IMF previously announced that it would support vulnerable countries with different lending options, including rapid-disbursing emergency financing from a pool of $50 billion for low-income and emerging markets. Around $10 billion of this has been set aside for the Rapid Credit Facility (RCF) which would provide interest-free loans to the poorest members countries. Pakistan’s additional financing request is not being considered through the RCF.
Although Pakistani officials have not given specifics about how much money has been requested or what exactly it will be used for, the IMF has said such funds are meant to allow governments to address urgent balance of payments needs and support policies to strengthen social protection nets, healthcare, and pay stipends to daily-wage earners.
The United States too has put Pakistan on a list of high-priority countries that will receive American aid to help combat Covid-19. Afghanistan, Bangladesh, Indonesia, Kazakhstan, Thailand, Burma, and Uzbekistan are also on the list. These countries will receive funds from a $274 million pool the US has set up to help them with their coronavirus responses.
Both sources of funding are clearly needed, but they also force a question concerning the government’s austerity measures. Pakistan always had a weak healthcare system, but the austerity measures and budget cuts only served to further choke it. No matter how much praise the IMF has for the government’s reform efforts, the fact remains that the healthcare system has actually suffered since the 2018 elections and the subsequent budget cuts. This funding might help us through the coronavirus pandemic, but we will return with a begging bowl the next time there is a disease outbreak. The only way to address that is to invest in the healthcare sector.
The coronavirus pandemic has affected all aspects of life all over the world. Pakistan is no exception. According to a report in this newspaper, more than 3,000 trucks loaded with goods and over 6,000 drivers and fairly large numbers of cleaners and helpers are stranded on either side of the Pakistan-Afghanistan border because of its closure at different points of entry and exit. Around 1,500 trucks at the Chaman border and another 800 at the Torkham border have been stranded for the past one month. The stranded drivers and helpers are facing tough conditions. They have run out of food and money. Their circumstances are so desperate that they are now selling fuel and tyres at throwaway prices to keep themselves alive. Back home, their families are fast running out of food and other necessaries for want of money.
On March 20, the PM had, in a tweet, promised that the government would not leave the Afghan brethren alone in this time of crisis and keep the supply line to and from Afghanistan open. We don’t know much about what is happening to the Afghan people at these testing times, but we do know that those who keep the supply line open between the two countries have been left to fend for themselves. Having been stranded away from home for such a long time they are more at the risk of contracting Covid-19. Drivers and helpers blame official lethargy for their distress. They say on March 28 they had written letters to the PM, governors of the provinces and high officials of the Pakistan Army to allow the vehicles of the Aghan Transit Cargo to cross the border.
The PM had ordered opening of the border for goods transport for three days but due to negligence on the part of the relevant authorities drivers could avail only one day and only 27 vehicles could cross the border. Are the authorities pretending that nothing is happening? We are experts at pretending, however.