Pakistan to seek increase in IMF package by $4.5 billion

[Naveed Yaseen]

AHMED MUKHTAR
ISLAMABAD (April 21 2009): Pakistan is making a formal request to the IMF for enhancing its Stand-By Arrangement by $4.5 billion from earlier $7.6 billion approved in November 2008. Prime Minister's Advisor on Finance Shaukat Tarin left for UK and then onward to Washington for spring meetings of Breton-Woods Institutions - IMF & World Bank - sources told Business Recorder.

He would make a request for enhancing Pakistan assistance package as Pakistan evoked lower than expected response from Friends Of Pakistan, sources said. Pakistan is likely to get now 8 times of its quotes than it contented at 5 times of quotes in last November, when the IMF excused for low resources availability. Now the IMF has also given informal consent of having enough resources to match Pakistan's original request.

Secondly Pakistan's performance is also much better than other crisis-ridden countries that could not go along with the IMF conditionalities and were unable to get second tranche of the Fund programmes. Tarin earlier said that Pakistan would decide for making a formal request to the IMF after seeing response from Friends of Pakistan.

This was not that good response Pakistan had envisaged and had lobbied for too. FOP could only offer $5 billion aid, which Pakistan had sought for $30 billion projects in addition to financial sector and security assistance from various donors.

In another move, a IMF delegation will be sitting in Dubai on May 4 with Federal Board of Revenue Officials to thrash out taxation measures for next fiscal year. This year's poor performance of the FBR has led many to eye untaxed sectors, which would now be taken into tax net. The FBR and the World Bank are quite disappointed with the tax collection of the last four months when the IMF has once revised down its targets and is likely to consider it again as the collection has shown a visible dip.

Tarin had also reiterated that he would tax each and every income earning Pakistani, so that distorted tax regimes are eliminated and after every couple of years the country should not land into troubled economic quagmire. The FBR has been complaining of the slow GDP growth rate in last few months with negative industrial growth and no imports growth.

http://www.brecorder.com/index.php?id=29132