Pakistan may seek $874m more from IMF: Shaukat Tarin

[Naveed Yaseen]

By Amin Ahmed
ISLAMABAD: Finance Minister Shaukat Tarin has said that Pakistan may have to seek additional $874 million from the IMF in case the grant under the Kerry-Lugar Bill is jeopardised.

Speaking to newsmen here on Wednesday, Tarin said that Pakistan in budget 2009-10 had estimated American grant of $874 million, but the ongoing impasse on the bill had put the expected aid at stake and the government would have to take measures to bridge this amount.

If Pakistan does not get the grant, it will have to approach the IMF for converting the aid into loan under the Stand-by Arrangements (SBA), Tarin said. ‘Converting grant into loan will have no serious effect on the fiscal deficit,’ the minister claimed.

Pakistan is expected to get $1.5 billion annually in economic aid under the said bill. The intermediary costs rise due to consultancies, and Pakistan has told Washington to remove this condition,’ Tarin said.
In Washington, US Secretary of State Hillary Clinton was informed about this and she committed that such conditions would be removed from the bill over a couple of years.

Tarin estimated that the fiscal deficit during the first quarter of 2009-10 would be between 1.5 to 1.6 per cent of GDP against the target of 1.3 per cent. However, he said the government would be able to contain the fiscal deficit to 4.9 per cent projected for the entire fiscal year.

He attributed the reason for high fiscal deficit to early payment of salaries to government employees for Eidul Fitr in the mid of September according to rules of the business and delay in advance corporate tax.

He expected that the government would get Rs25 billion against corporate tax in October. The minister stated that the pledges by the Friends of Democratic Pakistan (FODP) were in tact and the country would get $2 billion.

‘The Japanese government would provide $500 million while Saudi Arabia, which pledged $500 million, will now give $700 million,’ he added.

Concerning National Finance Commission, the Finance Minister said that the deliberations of the commission would be completed in next two to three sessions.

The next session of the NFC will meet in Peshawar followed by another meeting in Karachi.

Earlier, speaking at the launch of book ‘A Journey Through Grassroots Development’ written by Shoaib Sultan Khan of Aga Khan Rural Support Programme, Tarin said that Pakistan was considered to be well endowed with natural, human and physical resources to become a prosperous and self-reliant country. ‘Yet it ranks very low in terms of social indicators,’ he remarked.


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