IMF board approves 7.6 billion dollar credit to Pakistan

[pkpatriotic]

IMF board approves 7.6 billion dollar credit to Pakistan
Tuesday, November 25, 2008

WASHINGTON: The International Monetary Fund (IMF) said Monday its executive board approved a credit of 7.6 billion dollars for Pakistan, the Fund's first rescue in Asia since the global financial crisis began.

The credit will "support the country's economic stabilization program," the IMF said in a brief statement.

The Fund and Pakistan had already announced an agreement in principle earlier this month on the package, aimed at staving off a balance of payments crisis that has raised the prospect of the violence-hit nation defaulting on its foreign debts.

Pakistan's precarious financial situation has caused worldwide alarm due to its role as a key ally in the US-led "war on terror" and its position as the Islamic world's only nuclear power.

 

[Chanakya.10]

What will IMF do if by chance Pakistan's government is unable to give this loan back to IMF in due time???? No offence by the way....

 

[Flintlock]

What will IMF do if by chance Pakistan's government is unable to give this loan back to IMF in due time???? No offence by the way....

They will lower Pakitsan's credit rating

What can they do other than that?

 

[eva syed]

bus ji.........5 years mein in peson se dewarien khari hon gi pakistan k girda gird aur after 5 year pakistan jab is malbay talay dab jaye ga tu usay bachanay koi masiha na aye ga...........hum pakistani tu pehle bhi roti daal k bhao mein phanse hein baad mein bhi yehi karien gay..........thats all.............

ghalib yahan kehtay.......
martey hein marnay ki arzo mein hum
mout ati hai per nahi ati !!!!!!!!!!

 

[fatman17]

IMF Clears Way for a $7.6 Billion Loan to Pakistan

By TOM BARKLEY

WASHINGTON -- The International Monetary Fund's executive board cleared the way Monday for a $7.6 billion loan to provide Pakistan with much-needed financing.

The troubled South Asian country will get immediate access to about $3.1 billion, with the rest to be phased in quarterly reviews, the fund said in a statement.

The 23-month standby facility is expected to form part of a broader international package to help Pakistan deal with a balance-of-payment crisis. The country needs about $4 billion in short order to pay for its imports and help repay its debt.

The IMF program aims to restore the confidence of domestic and foreign investors with a tightening of fiscal and monetary policies, while maintaining social stability through targeted spending, the IMF said.

"The Pakistani economy was buffeted by large shocks during FY2007/08, including adverse security developments, higher oil and food import prices, and the global financial turmoil," Takatoshi Kato, deputy managing director and acting chairman of the board, said in a statement.

He also blamed a jump in the budget deficit on a delay in allowing higher prices to pass through to domestic consumers, and said the central bank's financing of the deficit pushed up inflation and sharply reduced international reserves.

The IMF expects Pakistan's economic growth to slow to 3.4% in the current fiscal year, which began July 1, from 5.8% the previous year. It is forecast to recover to 5% next fiscal year.

It expects the country's budget deficit to be reduced to 4.2% of gross domestic product in the current fiscal year and 3.3% the following year -- from 7.4% at the end of June.

"The reduction will be achieved primarily by phasing out energy subsidies, better-prioritizing development spending and implementing tax policy and tax administration reforms," Mr. Kato said.

The State Bank of Pakistan, which recently conducted a two-percentage-point hike in the discount rate, will continue to tighten as necessary to bring down inflation and shore up reserves, the IMF said. The central bank is also expected to stop financing the government.

Write to Tom Barkley at tom.barkley@dowjones.com

 

[Geromix]

Well that is some good news from Pakistan,now everything depends on GoP on how they handle the situation from here.

No excuses for them now,they cant blame Mush any more.

 

[BanglaBhoot]

Not so much a bail-out

Nov 20th 2008 | DELHI
From The Economist print edition
Consider it as war reparations

THE manager of one of the classier hotels in Pakistan’s beautiful Swat Valley sounds wistful on the phone. His hotel has been closed for months, he says, but he looks forward to extending a welcome in happier times. Over 4,000 tourists visited Swat in 2007, drawn by its Alpine scenery and Buddhist archaeology. But the trade has dried up this year. Visitors are deterred by the Taliban encamped in the region and the mortar fire meant to oust them.

The damage to Pakistan’s tourist industry, which brought in $276m in 2007, is one example of the price the country is paying for the war on terror. On November 14th the finance ministry announced its estimate of the full bill: $8.5 billion for this fiscal year, which ends in June 2009, and a staggering $34.5 billion since 2001.

This includes the direct cost of mobilising the army, which is now waging fierce battles against militants in Pakistan’s border regions. It also covers a long tally of indirect burdens, from the cost of accommodating displaced people to the higher insurance premiums charged on sea-freight. Such calculations are notoriously hit-and-miss. But the decision to publicise them now is a reliable index of the government’s mounting frustration.

Pakistan is running out of cash. On November 15th, the IMF said it would ask its board to lend Pakistan $7.6 billion over 23 months. Pakistan hopes friendly governments will add their financial support. So far it has won warm words but no hard cash, other than, the government says, the promise of a $500m loan from China.

The government feels it is asking not for charity but for recompense. Even trips to Dubai, where it met the IMF, are an additional cost it has to bear because terrorists blew up the Marriott Hotel in Islamabad, deterring foreign officials from visiting. The money it is requesting is not a bail-out, says Ashfaque Khan of Pakistan’s finance ministry. No sir. We are paying for our war, which is also your war.

That war’s ledger has two sides, of course. Pakistan received over $10 billion in foreign aid from 2001 to 2006, according to the OECD, a quarter of it from America and Britain. America has also provided $8.9 billion in military help in the past seven years. It has paid for the food, clothing and housing for some 100,000 Pakistani troops in regions like Swat. It also reimburses Pakistan for the use of its seaports and airstrips. (Mr Khan complains that reimbursement arrives only after detailed scrutiny and a seven-to-eight month delay.)

In July Joseph Biden, America’s next vice-president, proposed a tripling of non-military aid to Pakistan to $7.5 billion over five years. He wants to go beyond a transactional relationship, whereby America provides aid in exchange for services. That sounds nice. But the Pakistanis feel that some outstanding transactions have yet to be settled in full

Pakistan and the cost of the war on terror | Not so much a bail-out | The Economist

 

[shchinese]

What will IMF do if by chance Pakistan's government is unable to give this loan back to IMF in due time???? No offence by the way....

do you really believe 7.6 billion is a lot of money when compared to the 2 trillion USD cash we Chinese have? keep my words in your mind dude, China has a lot of friends, with large economic interests even the US can be called China's friend, however, China has only one single ally, there is only one single nation in this world that China calls it ally, that is Pakistan.

the following news is censored in your country, but not in mine, in our native language:

而根据英国《金融时报》报道，一名巴基斯坦官员表示，札尔达里已经得到中国领导人的保证，称中国“绝不会让巴基斯坦拖欠国际支付款项。”“初始援助为五亿美元，并承诺还会增加。”

ÖйúÔ®Öú°Í»ù˹̹ÎåÒÚÃÀÔª - ÖнðÔÚÏß

basically it says:

The Chinese leadership has promised that China will never let Pakistan to have any overdue for its international debt. The first stage assistance is valued at 500 million USD and China has promised to increase it soon.

the message here is clear:

the blank cheque has already been promised.

China did the same thing for Hong Kong in 1997, check the history book and see what happened at that time. One more interesting thing to mention is that in 1997, the Chinese foreign reserve is only about 60-100 billion USD, compared with the current 2 trillion USD.

 

[pkpatriotic]

do you really believe 7.6 billion is a lot of money when compared to the 2 trillion USD cash we Chinese have? keep my words in your mind dude, China has a lot of friends, with large economic interests even the US can be called China's friend, however, China has only one single ally, there is only one single nation in this world that China calls it ally, that is Pakistan.

the following news is censored in your country, but not in mine, in our native language:



ÖйúÔ®Öú°Í»ù˹̹ÎåÒÚÃÀÔª - ÖнðÔÚÏß

basically it says:

The Chinese leadership has promised that China will never let Pakistan to have any overdue for its international debt. The first stage assistance is valued at 500 million USD and China has promised to increase it soon.

the message here is clear:

the blank cheque has already been promised.

China did the same thing for Hong Kong in 1997, check the history book and see what happened at that time. One more interesting thing to mention is that in 1997, the Chinese foreign reserve is only about 60-100 billion USD, compared with the current 2 trillion USD.

^^^^^ your remarks are above the comments.........we Pakistanis proud to have chinese as friend for all season.
Long live & friendship