Pakistan and the International Monetary Fund (IMF) have successfully completed negotiations on the 12th and final review under the three-year Extended Fund Facility (EFF) programme for an amount of $6.4 billion. This means Pakistan will no longer be requiring more assistance from the Washington-based fund. For a country whose single largest component of public spending is foreign debt servicing – Pakistan currently pays 24% of the GDP repaying foreign loans – the end of another extensive borrowing scheme can only be good news.

The government and IMF officials have been quick to point out that the successful review indicates the country’s ability to stand on its own feet without requiring foreign aid. The Finance Minister, Ishaq Dar, went further and hailed the end of the loan scheme as a success for the government’s policies – despite that fact that it failed to achieve targets on net domestic assets and budget deficit.

While there is truth in these claims, the end of this loan scheme does not necessarily mean ‘goodbye’ to the IMF. If the economic situation worsens, Pakistan may yet have to return to the body for help – true end to dependence will come once local economic indicators show growth and revenue collection is increased greatly. Pakistan has a long history of borrowing from the IMF – since 1958, Pakistan has availed 16 programmes. The end of one scheme does not mean permanent economic success.

This government has surely improved the economy from the state it found it in when it came into power, but core economic indicators are still growing too slowly. The key now would be to focus on tax collection and sound economic policy rather than to rely on a foreign aid package always being there. The sooner it can free our GDP from debt servicing, the sooner the government can focus on actual development.