The idea to secure a two billion dollar loan from Pakistanis living abroad was given the go-ahead by the Dar administration, and SWIT volunteers have already raised one million dollars toward that goal.
KARACHI: On Thursday, Finance Minister Ishaq Dar approved raising $2 billion from Pakistanis living abroad to aid the nation in escaping its current economic hole.
Bashir Farooqi, chairman of the Saylani Welfare International Trust, requested the finance minister’s approval while speaking at a conference on “Defining a roadmap for Islamization of Pakistan’s economy” in order to voluntarily raise $2 billion from Pakistanis living abroad using the charity’s global welfare network.
Dar, who could be reached via a video conference link, gave the State Bank of Pakistan (SBP) instructions to provide proof of the anticipated debt’s increase.
The finance czar stated that the transaction “should be clear, adequately recorded, and there should be a well-defined procedure to raise the debt.” Farooqi stated that the debt would be raised for five years with no interest and that the trust would then transfer the money to the government.
The trust’s chairman continued, “The government may utilise it to clear import items delayed at Karachi port due to the poor availability of foreign exchange reserves at this time.”
The most obvious indication yet that the nuclear-armed nation risks defaulting unless it receives enormous backing is Pakistan’s full-blown economic upheaval, which includes its largest-ever currency devaluation and a wave of emergency spending cuts.
With just $3.7 billion in reserves left after last year’s devastating floods, the nation is on the verge of collapse just before fiercely contested elections are coming in November. This is just enough money for three weeks’ worth of necessary imports.
It urgently needs the IMF to disburse an overdue tranche of $1.1 billion, as there is still $1.4 billion left in a stalled bailout programme that is scheduled to finish in June.
Despite the fact that an emergency IMF mission has arrived in Pakistan, there are no guarantees given the mounting problems following the suspension in November of payments under the current package, which was increased to $7 billion following the floods.
Some major obstacles may have been removed thanks to the rupee’s 15% depreciation and the increase in fuel costs last week, especially given that tax measures appear to be on the horizon.
However, because the bailout package cannot be prolonged through June and elections are approaching, pressure is mounting.
