March 10, 2023 (MLN): As the world eagerly awaits news of Pakistan's $6 billion bailout package from the IMF, delays are piling up, with no end in sight. With negotiations dragging on for over a month now, Pakistan is beginning to feel the heat.
The recent delay has been attributed to Pakistan seeking assurances from its lender countries, especially China, which has loaned nearly $30bn to Pakistan.
But Pakistan is not the first country that is enduring this situation. Similar delays have plagued countries like Zambia and Sri Lanka in the past. But what's causing this hold-up for Pakistan?
Well, it seems that the crux of the matter lies in securing financial support from China.
According to Reuters' analysis, Zambia faced a 271-day delay in securing approval from the IMF for $1.3bn in financing. Similarly, Sri Lanka waited 182 days for the IMF to approve $2.9bn in support.
These delays were attributed to the need for assurance of financial support from lender countries, particularly China, which has been the largest creditor disbursing $138bn to countries from 2010 to 2021 and it is no wonder that Pakistan is looking to Beijing for support.
But as IMF negotiations continue to stall, one can't help but wonder – is China casting a shadow over these talks? And what does the future hold for Pakistan's struggling economy? Only time will tell, as Pakistan joins the ranks of a "small number of countries" that have faced significant delays in securing IMF support.
In the meantime, Bangladesh has raced ahead, securing $3.3bn under an extended credit facility and $1.4bn under a Resilience and Sustainability Facility.
Will Pakistan be able to catch up, or will it be left behind in the dust? Stay tuned for more updates on this nail-biting saga!