The Pakistani government is facing increased pressure from the IMF to meet the requirements of its financial stabilisation programme, agreed in 2008, including the full implementation of a value added tax (VAT) and specific foreign borrowing targets (see Update 71). At the same time, fears over the cost of increased borrowing from IFIs remain evident, with finance minister Abdul Hafeez Shaikh stating that although Pakistan may need a follow up loan from the Fund, “in the long run we have to get rid of the IMF because it’s expensive.” His comments echoed those from the provincial government of Khyber Pakhtunkhwa, which in May rejected a $100 million World Bank loan. A senior official from the provincial finance department said that, “this loan may enlarge fiscal space for the next budget, but the government and people will have to pay a price for it.”
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Last year BRICS' leaders agreed to launch a BRICS development bank. Whether this is considered positive depends in part what questions are being asked. Sameer Dossani of ActionAid International highlights the flaws in the World Bank and IMF, analyses whether a BRICS Bank could be different from these institutions and proposes what it should do and what it should look like.
The Bretton Woods Project is an ActionAid hosted project (UK registered charity no. 274467).