THE IMF is a relatively new player in the climate space. It has moved rapidly to carve a role for itself by formally recognising long-ignored linkages between macroeconomic stability and climate resilience. Pakistan is now seeking over a billion dollars from its Resilience and Sustainability Facility (RSF). This offers Pakistan an opportunity to redefine its climate landscape and engage the IMF on five big strategic barriers to climate action.
In accessing the RSF, this is the time to start weaving benchmarks for climate resilience and sustainability in macroeconomic indicators. RSF is the IMF’s newest initiative that became operational in 2022 to provide longer-term concessional financing to build climate resilience. It has already committed $8 billion to almost a dozen countries, starting with Barbados. The last and largest is $1.4bn to Bangladesh earlier this year.
The support to these countries, mostly least developed or island nations drowning in debt, seeks policy and institutional, financial, regulatory, infrastructural, and social and economic reforms. These broad categories have enabled the IMF to support wide-ranging adaptation and mitigation-related interventions aimed at improving climate governance, policy environment, climate resilience frameworks, or strengthening financial systems. It is too early to see how far this playbook has spurred transformational change, but for Pakistan, several development partners have routinely extended support in these areas. What will then be the strategic arenas on which Pakistan and IMF can together build the architecture for the RSF?
It is important for Pakistan that the conditionalities associated with RSF disbursements are........