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| Pakistan looking forward to $10 bn bailout by Saudis, China |
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Sunday, August 24, 2008
Ongoing negotiations with IMF being dragged
By Ikram Hoti
ISLAMABAD: Negotiations with the IMF which commenced last week for a US$10 billion bailout package for Islamabad are expected to remain inconclusive as Pakistan is set to seek direct help from Saudi Arabia and China.
The negotiations are being held by a couple of IMF officials, who met the Pakistani economic managers in a process of charting out an expression of interest for the bailout package.
“We are making efforts to prevent the drift towards an IMF-assisted bailout that would obviously cause more difficulties as it would be governed by strings that are hard to fulfill,” said a senior Pakistani official involved in the talks.
The crisis deepened last month as the foreign exchange reserves dwindled and the rising import payments became the most difficult task for the public finance heads here. Pakistan now happens to be the only country in 2008 facing by international rating companies the threat of downgrading of its import-export balancing effort from the present B-1 status and inability to make on-time payments due in foreign exchange to international exporting companies.
A committee of experts, currently working out a bailout package and keeping a tight lid on the actual situation, is busy framing a strategy on war-footing. It is reportedly framing up a “suggestion” to the federal policymakers to approach Saudi Arabia and China for a $10 billion package split by 6-4, respectively.
Pleading anonymity, The News sources revealed that next Monday would be critical for meetings of the federal cabinet’s committee overseeing the formation of a strategy in this respect. “That is going to be the day when this country would have to decide as to how the two countries would be submitted with an agenda for loan, and on what terms,” said a senior official.
“A consensus has evolved in these meetings on averting a drift back to the IMF mechanisations. A week ago, some IMF officials did visit Islamabad to offer a package, and it was a soft mark-up deal. Its tranche-payment mechanism was attractive too, as the Fund seemed ready to release $500 million every month, which is close to what the actual requirement over the current financial year’s 12-month period would be. But the strings attached would be too harsh to meet,” said the official.
When asked to provide details on these strings and the bailout package to be split between Saudi Arabia and China, he said: “I am not supposed to hand out half-cooked measures. But the main idea is that Saudi Arabia should be offering a deferred-payment scheme for the current fiscal year on the provision of petroleum products imported from that country. It should be a 12-month scheme covered by assurances that the products would be used to keep the prices stable and no further loans would be acquired from other internal or external sources against the facility thus extended, which is not a harsh string.” A $4 billion offer is expected from China, he said and added that negotiations in this respect would be brisk as “the crunch has begun telling too adversely to sustain any further.” This money would be available in tranches of $500 million once agreed upon.
Explaining the IMF strings, he said the Fund would like Islamabad to immediately stop subsidising oil, electricity, gas and food items. “That would mean an immediate jump in the inflationary trend, which would directly be impacting the export-production lines, which is not acceptable to Pakistan,” he added. Apart from this, the IMF would also like to bind the tranche release to the reappraisal of the reforms conducted in the economic-management structure of Pakistan over the past few years.
On their part, members of the committee have been suffering from acute lack of orientation as far as identifying the actual nature and handling of the crisis is concerned. At one point, the committee was about to churn out the formula for stopping imports of non-critical items, which are, otherwise, a good source of revenue, prevent smuggling and, if banned, would help save only about $48 million in payments a month. This formula is expected to be rejected as wiser heads meet next Monday, the source added.
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Three killed as Sh Rashid escapes attempt on life
By Shakeel Anjum
RAWALPINDI: Awami Muslim League (AML) Chief and a candidate for NA-55 (Rawalpindi) by-election Sheikh Rashid Ahmad was wounded, while three people — a guard and two party workers — were killed when four gunmen more |
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12 soldiers killed in South Waziristan
ISLAMABAD: Twelve soldiers embraced martyrdom while two others were injured in a clash with militants during the ongoing operation Rah-e-Nijat in South Waziristan Agency (SWA), the ISPR said on Monday.
S more |
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Plan to attack five-star hotel foiled
By our correspondent
LAHORE: The CIA police here on Monday claimed to have foiled an attack on Americans staying at a five-star hotel and arrested six terrorists, including a suicide bomber.
Addressing a press conference, SS more |
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Govt taking court for a ride
By Ansar Abbasi
ISLAMABAD: She fought her case in the media. She won her battle in the judicial forum too. But still the government is bent on making an example out of her for refusing to follow the illegal dictates of her min more |
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Pakistan against arms race: Gilani
By Azeem Samar
KARACHI: Prime Minister Syed Yousuf Raza Gilani on Monday said Pakistan does not want to be engaged in an arms race with any country.
Speaking as chief guest at the induction ceremony of second Chinese-m more |
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Punjab-Sindh water row Centre’s intervention sought
By our correspondent
ISLAMABAD: Tension between Punjab and Sindh over opening of the Chashma-Jhelum and Taunsa-Punjnad link canals has touched a new high as the former has sought the Centre’s intervention.
The Punjab has sai more |
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French, Dutch fight over giving LNG to Pakistan
By Khalid Mustafa
ISLAMABAD: Finance Minister Shaukat Tarin and his team is all set to thwart the attempt of an unscrupulous combine of oil industry heavyweights and some functionaries of the Ministry of Petroleum and Natural Re more |
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Nine killed as no let-up in rains
By Nisar Mahmood
PESHAWAR: Nine people were killed and scores of others injured as heavy rains and snowfall lashed various parts of the country for the fourth consecutive day on Monday.
Reports from the Shangla district more |
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Malik orders NUML closure as protest enters 5ht day
ISLAMABAD: The protest of the students of the National University of Modern Languages (NUML) against thrashing of Professor Malik Tahir by Registrar Brigadier (R) Obaidullah Ranjha entered its fifth consecutive more |
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Malik insists no Blackwater in Pakistan
By Muhammad Anis
ISLAMABAD: Interior Minister Rehman Malik while responding to an accusation from a PML-N parliamentarian told the National Assembly that Blackwater was not providing security to the president and the prime mini more |
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FBR gets list of properties rented out to foreigners
By Hanif Khalid
ISLAMABAD: Federal Board of Revenue (FBR) has received list of properties from Foreign Office, which were in use of foreigners in Islamabad, Karachi, Peshawar and Lahore, but these were not shown in annual tax more |
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Repealing of 17th Amendment
By our correspondent
ISLAMABAD: Prime Minister Syed Yousuf Raza Gilani has begun efforts to create consensus on repealing the 17th Amendment before presidential address to the joint sitting of the parliament.
The prime minis more |
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Three suspects held in Mohmand
By our correspondent
GHALLANAI: The security forces arrested three suspected persons during search operation in Safi subdivision of Mohmand Agency, official sources said Monday. The sources said the security forces carried out sear more |
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No presence of Blackwater, DynCorp in Pakistan, NA body told
ISLAMABAD: Secretary Interior Qamar Zaman again negated on Monday the presence of Blackwater, DynCorp or any other foreign security agency in the country. “Neither the Blackwater and the DynCorp nor any other s more |
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Govt urged to take up water issue with India
By Asim Yasin
ISLAMABAD: Pakistan Muslim League-Q, Parliamentary leader in the National Assembly, Makhdoom Faisal Saleh Hayat while urging the government to take up the issue of ‘water terrorism’ with New Delhi, has question more |
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Avalanche kills 17 Indian soldiers in held Kashmir
HELD SRINAGAR: Seventeen Indian soldiers were killed on Monday in an avalanche that slammed into a group of 70 combat troops at a high-altitude warfare training camp in Kashmir, the army said on Monday.
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Taliban defiant as Afghans flee ahead of assault
KANDAHAR: The Nato commanders urged the Taliban to surrender as troops dug in on Monday for a major assault on their key stronghold in southern Afghanistan, sending thousands of residents fleeing.
The Ta more |
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Plea to freeze foreign accounts
By our correspondent
LAHORE: The Lahore High Court (LHC) on Monday ordered the federal government to submit a reply within four weeks on a petition seeking freezing of accounts in foreign banks and recovery of illegal assets accumu more |
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Attack on Sh Rashid
RAWALPINDI: The PML-N candidate for by-polls from NA-55, Malik Shakil Awan, has announced suspension of electioneering for a day to mourn the death of those killed in the attack on the office of his rival, Shei more |
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Indian forces to halt Kashmir rally outside UN office
HELD SRINAGAR: The held Kashmir authorities deployed thousands of police and troops on Monday to prevent a protest outside the UN office here over the recent killing of two teenage boys by Indian security force more |
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briefs...
20 die in Afghan floods, avalanches
KANDAHAR: Twenty people have died in floods and avalanches triggered by some of the heaviest rain and snow in Afghanistan for 50 years, an official said on Monday. At more |
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