The International Monetary Fund said Monday its executive board had approved a credit of 7.6 billion dollars for Pakistan, the Fund's first rescue in Asia since the global financial crisis began. The 23-month credit line will “support the country's economic stabilization program,” the IMF said in a statement. On full approval by the IMF board, about 3.1 billion dollars would be immediately available to Pakistan and the remainder would be allocated after quarterly reviews. The objective, the fund said, was first to “restore macroeconomic stability and confidence through a tightening of macroeconomic policies.” Acknowledging the plight of a country wracked by violent extremism along with an economic downturn, the IMF said the credit was also to “ensure social stability and adequate support for the poor and vulnerable in Pakistan.” “By providing large financial support to Pakistan, the IMF is sending a strong signal to the donor community about the country's improved macroeconomic prospects,” he said. Earlier this month, the IMF and Pakistan had already announced an agreement in principle on the package aimed at staving off a balance of payments crisis that has raised the prospect of the violence-hit nation defaulting on its foreign debts. Pakistan's young government had been reluctant to go to the IMF but had little choice after close allies – the United States, China and Saudi Arabia – turned down pleas for significant bilateral aid. Opposition and nationalist lawmakers have criticized the government for turning to the fund, saying the IMF will impose austerity measures that will hurt ordinary Pakistanis, two-thirds of whom live on $2 a day or less. “This IMF loan the government is getting is in fact poison, and the nation has been forced to drink it,” Javed Hashmi, a senior figure in the main opposition party, told reporters. But many Pakistani economists and commentators argue that the country had no choice but to turn to the IMF. The loan removes the most pressing risk facing the country, namely that it would not be able to repay dollar-denominated government bonds due to mature early next year, said Muzammil Aslam, an economist at the Pakistani securities firm KASB. Economic progress in the medium term depended on Pakistan meeting some of the conditions imposed by the IMF, said Aslam.
