Pakistan's IMF Bailout: Good Money After Bad?

The Fund's tough conditions for its loan to Islamabad are unlikely to work without strict vigilance over the use of all its funds. Even then, can Pakistan's economy really be rescued?

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The International Monetary Fund (IMF) has imposed tough conditions on Pakistan for disbursing installments of the $7 billion loan that Islamabad negotiated with it under its Extended Fund Facility (EFF).

Such IMF credit comes not so much with avuncular indulgence as with tough conditionalities meant to stabilize macroeconomic variables. The IMF is also giving Pakistan a climate resilience loan of $1.4 billion. We should wish the country all the fortitude it can summon to swallow that bitter medicine. It is not in India's interest for any large poverty-ridden nation to implode in its neighborhood. Pakistan has a quarter of a billion people, 40% of them below the World Bank's poverty line for lower-middle-income countries, 42% of them illiterate and multitudes apparently in thrall to distorted versions of Islam. This is the 13th time Pakistan has tapped the IMF for bailout funds since 1991, when India last took a loan from the multilateral lender.