KARACHI Oct 30 Pakistan's economic
troubleshooter believes that the country has no alternative to
seeking money from the International Monetary Fund to cope with
dwindling foreign reserves and a balance-of-payments crisis.
Pakistani officials had been in talks with the IMF in Dubai
since last week and Shaukat Tarin, the prime minister's top
economic adviser, told the Senate late on Wednesday the
negotiations would be completed on Thursday.
"We know IMF programmes harm nations financially. But, we
have no other option. Even then, we shall accept their
programme on our terms," Tarn told the Senate, according to the
state-run APP news agency.
"I would not like the IMF programme, if you ask me. But we
are sitting on a monster, facing a trade deficit of $20 billion
and current account deficit of $1.5 billion," said Tarin.
Tarin was not available for comment on Thursday.
The IMF had endorsed a financial plan drawn up by the
government, he said. Pakistan needs urgent help as its foreign
reserves dwindled to about six weeks of import cover.
Pakistan's economic woes began before the global financial
crisis set in but analysts say the crisis has compounded
Pakistan's difficulties by making donors reluctant to step in.
Pakistan has tried but failed in recent weeks to win any
large financial assistance from friendly governments and other
Tarin told the Senate that other lenders were looking for
IMF endorsement of a plan for Pakistan before stepping in.
"In this situation, even other donors would prefer that at
least we show our plan to the IMF or get it approved. Everybody
is looking towards its endorsement."
Central bank governor Shamshad Akhtar said in Dubai on
Wednesday that an IMF deal would be announced in due course and
there was "no possibility" Pakistan would default on its debt.
Pakistan's foreign exchange reserves have been dwindling by
$1 billion a month and have fallen from a high of $16.5 billion
in October last year, to $7.32 billion on Oct. 18, of which the
central bank accounted for $4.04 billion.
The latest data will be released later on Thursday.
Tarin has said there is an urgent need for $4 billion to $5
billion to fill a financing gap. The country also needs $10
billion to $15 billion to cover a current account financing gap
and undertake adjustments over the next two years.
Tarin later told the Geo News channel the country had 15 to
20 days to find cash and it was still hoping for help from
friendly governments and other lenders, he said.
The Friends of Pakistan grouping of potential donors will
meet in Abu Dhabi next month but officials say the meeting
should not be seen as a pledging forum.
Tarin told the Newsone television channel this week that
Pakistan was not specifically looking for cash commitments from
the group but various forms of help including free trade
agreements, securitisation of remittances and deferred
An IMF package is usually contractionary and often involves
cutting spending, raising taxes, accelerating privatisation,
increasing interest rates, and exchange rate flexibility to
correct fiscal and external imbalances and control inflation.
(Additional reporting by Augustine Anthony; Editing by Jan