Debt Dependence and Climate Finance: A Risky Gamble for Pakistan
- Seeking Climate Loans Amid Ongoing Debt
Applying for the IMF’s $1bn RSF while struggling with current loan conditions adds to financial stress. - More Conditions, More Burdens
RSF loans come with their own criteria, compounding the pressure of existing IMF programme requirements. - Interest Adds Long-Term Cost
Despite delayed repayments, interest accrues yearly, deepening Pakistan’s repayment obligations. - No Clear Economic Reforms
There’s still no solid plan to boost exports or reduce imports — loans are used for recurring expenses. - Climate Justice Undermined
Instead of receiving compensation for climate damage, Pakistan is forced into more debt for survival.
Summary:
Pakistan’s move to seek another IMF loan for climate resilience, while already under an Extended Fund Facility, reflects a troubling pattern of dependency without reform. The RSF offers delayed payments but still accrues interest, and its requirements stack on top of existing IMF conditions. Without addressing the root causes of its economic issues — such as import dependency and weak exports — Pakistan risks deeper entanglement in the debt cycle. This approach also undercuts the principle of climate justice, shifting the burden onto developing nations like Pakistan. Strategic planning and economic self-reliance are now more urgent than ever.
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