There is some exuberance about the pledges Pakistan got from Geneva. It's good to have a sentiment booster. Still, the question is what we are getting in actual dollars immediately, which is the need of the hour, as SBP foreign exchange reserves are reportedly at $4.5 billion. One must see how the pledges in Geneva 2023 differ from what we got in Tokyo 2009 from Friends of Democratic Pakistan (FoDP).

In terms of immediate need, some relief is coming from KSA, where the commitments of deposits to the SBP have increased by $2 billion to $5 billion. However, the presser says that deposits' augmentation must be studied. Does it imply that this is connected to the IMF nod on the 9th review? Even if it is not, these additional deposits would give a breather of a month or two, and after that, the country would be back on a road where only IMF support can keep the economy afloat.

Hence, all roads lead to the IMF. With or without the materialization of the pledge. With or without immediate inflows of $2 billion from KSA. Period. Hence, nothing short of returning to the IMF can bring calm to the markets. The PM requested IMF for the relaxation of conditions. FM did consult with the IMF team on the sidelines in Geneva. But there is nothing about any concession or relaxation by the IMF yet.

Thus, the vitality of pledges from Geneva is likely to precipitate in the air soon. It's good to have these commitments. But we must evaluate what people expect and what is in the offing. The pledges of $8-10 billion included $3.5 billion from ADB and WB, which are mostly repackaged and refurbished. These have already been announced in some form and perhaps already part of the funding plan for the next three years. The new part is the Islamic Development Bank's commitment of $4.2 billion in the next three years. The remaining is around $400 million and change.

The essential news has to come from the Middle East. Saudi Arabia is committing to investment and deposits. That is encouraging. Something more can come from the UAE. However, these are the commitments made to the IMF by Miftah when he was the finance minister. Now one of the conditions of the IMF is to have the specifics of these commitments. This may imply that these commitments are linked to the IMF nod. Even if some of these are not, such as $2 billion deposits from KSA, it will buy a few weeks before the reserves dry again. And if these are used to protect the political capital of the ruling party, PMLN, the outcome could be even more disastrous. In that case, there would be no IMF and nothing more from these countries, and Pakistan will have to take a painful debt restructuring route.

Hence, it's wiser to go to the IMF now and then get all the money that should be used with fiscal prudence. And even then, debt restructuring (or debt reprofiling) is becoming necessary. However, in that case, the journey could be less painful. Hence, it's reiterated again in bold letters that all the roads are leading to the IMF.