Pakistan Prefers Friends’ Aid to IMF Package: Khaleej Times

ntensive Pakistan-IMF consultations have been taking place in Dubai since Tuesday, for a bailout plan to avert possible debt default.

Pakistan has been trying to get International Monetary Fund endorsement for its current strategies for economic recovery that is imperative to persuade other multilateral lenders and friendly countries to come to its rescue.

Islamabad immediately needs 4 to 5 billion dollars to stabilise the economy and enhance confidence in its financial system — a pre-requisite to arrest ever-widening gap in balance of payments position amid rapidly depleting reserves and steep slide in rupee value. High inflation (25 per cent), unsustainable budget deficit, liquidity squeeze in the banking system due to government borrowing has multiplied economic woes.

It is apparent that both sides have agreed in principle on the need for help that was decided in their meetings in Washington in September. But Pakistan insists the IMF is only the last option and the current talks are a health-check and assessment of its financial restructuring plan, which does not include IMF funding at this stage. The plan is already underway to control expenditures side by doing away with subsidies on POL and electricity.

“It is not an extraordinary meeting but, yes, the circumstances have made it so”, says the Adviser Finance Shaukat Tareen. The IMF also confirms a formal request has yet to come but has been encouraging Islamabad to accept funding that may go up to $7 to 10 billion during next two years. The last time Pakistan came off an IMF programme was in December 2004, vowing it would never borrow from the agency again.

For more on this article, please click on the following link: Pakistan Prefers Friends’ Aid
to IMF Package: Khaleej Times