IMF approves US $123 million for sixth tranche

The IMF has credited Pakistan with US $123 million following the fifth review of the country's performance under a three-year Poverty Reduction and Growth Facility (PRGF) arrangement amounting to $1.47 billion. This brings the total of disbursements to date under the PRGF to $738 million, which runs until November 2004. The PRGF is the IMF's concessionary facility for low-income countries. Programmes supported by the PRGF are framed around comprehensive, country-owned Poverty Reduction Strategy Papers (PRSPs). Pakistan developed a PRSP in 2001 under the leadership of President Pervez Musharraf. "The government of Pakistan has responded well to the IMF's criteria, and it all seems to be going on track," an economist for the IMF in Pakistan, Dr Zaffar Iqbal, told IRIN in the capital, Islamabad. "The commitment from the government is there and we will continue to enjoy these good relations so long as this is there," he added. "Most structural reforms planned through April were broadly on track except for limited progress on privatisation owing largely to regional security concerns that resulted in a lack of investor interest, and for setbacks in energy sector reforms," said IMF Deputy Managing Director and Acting Chair Eduardo Aninat in a statement issued on Thursday. "Further progress was made towards the completion of a full Poverty Reduction Strategy Paper and in strengthening the monitoring of intermediate social outcomes to ensure that higher human development expenditure translates into better public service delivery," he stated. However, some human development experts argue that more attention should now be paid to social indicators, which have increased over the past few years. "They should be keeping an eye on the surveys such as the household income expenditure survey and the mortality rates, which haven't changed at all," Shaheen Rafi Khan, an economist for the Sustainable Development Policy Institute , Rafi Khan told IRIN in Islamabad. According to the Pakistan Economic Survey for 2001-02, 30 percent of the population lives below the poverty line. The IMF did raise concern over the financial performance of the power utilities in the poverty stricken nation, saying it remained disappointing due to high line losses, nonpayment of bills in certain areas and electricity tariffs which did not cover costs. PRGF loans carry an annual interest rate of 0.5 percent, and are repayable over 10 years with a five and a half-year grace period on principal payments.