ISLAMABAD: The US State Department said on Wednesday Pakistan had “a lot of hard work” ahead to achieve long term, sustainable economic recovery despite the International Monetary Fund and Pakistan striking a staff-level agreement for the provision on $3 billion in bailout funds under a stand-by arrangement (SBA).

The deal came under an SBA instead of Pakistan’s Extended Fund Facility (EFF) program that the country entered in 2019 and which was set to expire on Friday. 

The IMF board will meet today, Wednesday, to approve the staff-level agreement.

During a press briefing on Wednesday, a State Department spokesman, Matthew Miller, when asked about reports the US had played a “key role” in helping Pakistan secure the new IMF, said Washington stood by Pakistan during “difficult times.”

“We welcome the progress that has been made between the IMF and Pakistan in having reached a staff-level agreement,” he told reporters. “Our support for the country’s economic success is unwavering.”

He said the US would continue to engage with Pakistan through technical engagements and strengthen trade and investment ties but Pakistan had “a lot of hard work ahead to be on a long-term sustainable path to economic recovery and prosperity.”

“But we will continue to stand by them through that process,” Miller added.

When questioned about Islamabad having to pick a side in the growing global rivalry between Washington and Beijing, Miller said the US did not ask Pakistan or any other country to choose between the United States and China or any other country.

“Our relations with Pakistan build on our close people-to-people ties, and we will continue to seek ways to expand our partnership and economic ties,” the spokesperson said.

“Our economic cooperation with Pakistan reflects our vision for the region as one of – comprised of nations that are independent, strong, and prosperous. And our relationships are based on a spirit of respect and partnership.”

Pakistan, historically a close ally of Washington, has become increasingly close to China, which has provided billions in loans and is Islamabad’s largest single creditor. Pakistan faces a crippling economic crisis, with record-high inflation and critically low foreign exchange reserves depleted by continued debt repayment obligations.

Washington is also still a significant military partner, with the State Department last year approving the potential sale of $450 million worth of equipment to maintain Pakistan’s F-16 fighter jets.