Pakistan Has Paid $3.7 Billion Interest to IMF in 40 Years

Pakistan has paid interest amounting to SDR 2.815 billion ($3.7 billion) to the International Monetary Fund (IMF) since 1984. This was revealed before the Senate Standing Committee on Economic Affairs which was further informed Pakistan has drawn an amount of SDR 21.789 billion against the sanctioned amount of SDR 29.673 billion since 1958 from the IMF. The Committee which met with Saifullah Abro in the chair while discussing the details of IMF funds received by Pakistan from the first program until June 2024, expressed disapproval of the details provided. The Committee recommended EAD that program-wise details of IMF funds including the amount received and ratio of interest paid by Pakistan over the years should be provided to the Committee. The committee was informed that to date, Pakistan has entered into 24 programs with the IMF. Pakistan signed its first programme in 1958 and the last one was the 2023 SBA. Apart from these programs, Pakistan has also utilized several one-time facilities of the Fund, such as during the floods of 2010 and most recently during the COVID-19 pandemic. As per the records available, Pakistan has drawn an amount of SDR 21,789.28 million against the sanctioned amount of SDR 29,673.15 million since 1958 from the IMF. The outstanding principal amount is SDR 6369.11 million. The Committee deliberated on the external debt project-wise, received by the Federal Government or Provincial Governments under multilateral, bilateral, and UN agencies. The Secretary for the Ministry of Economic Affairs, Dr. Kazim Niaz, briefed that there are a total of 298 projects, with 146 being multilateral and 152 bilateral. He added that the number of multilateral projects is larger than the number of bilateral projects. Of the multilateral projects, 63 are World Bank projects, 54 are Asian Development Bank projects, 6 are IFAD projects, 14 are Islamic Development Bank projects, and 21 are European Union projects. Among the bilateral projects, 16 are funded by China, 13 by Saudi Arabia, 60 by Italy, Germany, France, and the UK, and 15 by Korea. These projects are divided into two categories: Loan and Grant Projects. While further deliberating on the agenda item, the Chairman Committee emphasized that disbursement of the loan is to be looked after by EAD as the country is already facing this huge fiscal constraints and loans are not utilized properly and in a transparent way by the departments. There are 58 World Bank loan-financed projects in the country, officials said. A commitment of 14,806 million dollars was made for 58 projects, said officials adding that for these projects, 6 thousand 162 million dollars have been released so far. The committee was further informed that a 762 KV transmission line will be laid from Dasu to Islamabad. The World Bank has a $700 million commitment to the project. An amount of $112 million has been released for this project, officials said. Daso Islamabad Transmission Line Project to be completed by June 30, 2025. There is a $390 million commitment for the Tarbela Four expansion project, said officials, adding that $159 million has been released for the Tarbela Four expansion project. Tarbela Four Expansion Hydropower Project to be completed by September 30, 2027. The Committee unanimously decided and recommended EAD to provide complete details of the projects which are already completed or closed from 2002 till date. The Committee further pointed out that the progress of the projects is also not mentioned against each project. The Committee recommended that EAD provide the updated progress of each project before the next Committee meeting. The Committee also decided to examine the projects sector-wise to determine whether they have been completed and to investigate the causes of any delays. The committee chairman raised questions about why the proposal for IPPs was not properly considered by the concerned department. The entire country is stuck in trouble because of these agreements, he added. Pakistan’s foreign exchange reserves include $4 billion from China and $5 billion from Saudi Arabia, said Dr. Niaz. The meeting was attended by Senator Taj Haider, Senator Kamil Ali Agha, Senator Rana Mahmood ul Hassan, Secretary for Ministry of Economic Affairs Dr. Kazim Niaz and other senior officials of relevant departments were also in attendance.