Pakistan Clinches Last-Minute IMF Deal

Welcome back to World Brief. I’m back in the wildfire haze of Washington, D.C. Today, we’re looking at Pakistan’s IMF deal, former Brazilian President Jair Bolsonaro’s judicial defeat, and Russian forces leaving the Zaporizhzhia nuclear plant.

Welcome back to World Brief. I’m back in the wildfire haze of Washington, D.C. Today, we’re looking at Pakistan’s IMF deal, former Brazilian President Jair Bolsonaro’s judicial defeat, and Russian forces leaving the Zaporizhzhia nuclear plant.

Pakistan Secures IMF Deal

After months of negotiations, Pakistan secured a $3 billion short-term agreement with the International Monetary Fund (IMF) on Friday. The nine-month deal came just hours before Islamabad’s current agreement with the IMF was set to expire. Once Pakistan receives final approval for the timeline of aid from the IMF board in July, Pakistan will receive its first $1.1 billion allotment.

Pakistan has grappled with a severe economic crisis for months. As of February, Islamabad had just $3.7 billion in foreign reserves, barely enough finances to cover a month of imports; since then, Pakistan has been hanging on the precipice of total default.

The latest IMF deal, which is expected to replace the remaining $2.5 billion out of a $6.5 billion agreement finalized in 2019, will set Islamabad “on the path of sustainable economic growth,” Pakistani Prime Minister Shehbaz Sharif said. Pakistani officials hope the new agreement will increase prospects for foreign direct investment and allow more foreign creditors to finance Pakistani businesses.

Pakistan faced a long road to reach a deal with the IMF. To receive the debt assistance, Islamabad had to adopt some austerity measures, including modifying next year’s fiscal budget by raising taxes by $750 million, ending import restrictions, and increasing interest rates to 22 percent. Pakistan currently has the fifth-highest total outstanding credit with the IMF.

The IMF lifeline won’t solve all of Pakistan’s problems, as “underlying structural factors that triggered Pakistan’s current crisis would still be in place,” FP’s Michael Kugelman wrote in this week’s South Asia Brief. Islamabad still struggles with corruption, a poor public welfare system, water and energy shortages, and an insufficient agriculture sector. “Barring badly needed large-scale reforms that are too politically risky, the next economic crisis could be just around the corner,” Kugelman wrote.

A blow to Bolsonaro. In a stunning decision, Brazil’s electoral court ruled on Friday that former President Jair Bolsonaro had violated the country’s laws and blocked him from running for public office until 2030. Five of the seven judges said Bolsonaro’s unsubstantiated claims that the country’s voting system was rigged during last year’s presidential campaign represented an abuse of his presidential powers.

Bolsonaro’s ineligibility will take effect immediately upon the publication of the decision. The former right-wing leader, who called on his supporters to attempt a coup on Jan. 8 after Luiz Inácio Lula da Silva’s election win, is expected to appeal the ruling. However, Bolsonaro may lack friends on Brazil’s Supreme Court, especially after calling some of its justices “terrorists.”

Fleeing Zaporizhzhia? Ukrainian officials are keeping an eye on the Zaporizhzhia nuclear power plant after Russian officials ordered more troops to leave the facility on Friday, including representatives from Russia’s state-backed nuclear energy agency. Ukrainian intelligence chief Maj. Gen. Kyrylo Budanov alleged that the Kremlin approved a plan to blow up the station and a cooling pond, having already mined four of its six power units.

Moscow’s forces have maintained control over the facility since March 2022, using it as a military base. Zaporizhzhia is the largest nuclear power plant in Europe and supplies 20 percent of Ukraine’s electricity. “A small action, deliberate or accidental, could trigger a meltdown at the site, with devastating impact on human life and the environment,” FP’s Anchal Vohra argued in May.

South Africa’s Ramaphosa cleared. In more judicial news, South African President Cyril Ramaphosa was found not guilty by a public watchdog on Friday for failing to report the theft of thousands of dollars hidden at his private game farm. The allegations came in 2020, when police discovered that at least $580,000 hidden in a sofa at the Phala Phala reserve was stolen. Ramaphosa said the cash came from a buffalo sale.

Opponents said the president did not properly report the theft to Brazil’s police because he wanted to hide that he had not disclosed more than half a million dollars, which some people believed the president should be required to do for ethical reasons. However, the ruling affirmed Ramaphosa’s claims that he did not abuse his power by failing to document the cash and its theft. A criminal investigation is still ongoing.

A French police officer on Thursday was handed a preliminary charge of voluntary homicide after doing what?

A. Fatally shooting a 17-year-old during a traffic stop
B. Beating a man in handcuffs to death
C. Negligent driving that resulted in the death of a child
D. Starving a detained man in the backseat of the officer’s vehicle

The deputy mayor of Helsinki, Finland, may lose his job over an illegal art project. Paavo Arhinmaki faces legal action for spray-painting graffiti with a friend in a railway tunnel last weekend. The Finnish public has called for Arhinmaki to pay for the damages—worth $3,830—and resign from his post. Arhinmaki has since apologized for his “stupid fooling around.”

A. Fatally shooting a 17-year-old during a traffic stop

The deadly shooting incited several days of riots in response to the French police’s increasing heavy-handedness—a trend Michele Barbero documented last month.

To take the rest of FP’s weekly international news quiz, click here or sign up to be alerted when a new one is published.

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