Should Pakistan’s current macroeconomic situation justify IFIs to withdraw their support to the country?

The current macroeconomic situation in Pakistan, where, according to recent estimates, the total debt would constitute about 60% of the GDP, raised concerns on the likelihood of Pakistan to repay its loans, and, consequently, on whether International Financing Institutions should continue lending to this country.

Contrarily to this position, we are of the opinion that investing in poverty reduction could contribute to macroeconomic stabilization, and that investing in activities that target the poor would contribute to reduce the vulnerability of the most vulnerable segments of society to the effects of macroeconomic instability.

We believe that the challenges that Pakistan is facing at the moment are actually an argument to continue the support to this country, not to withdraw it.