ID :
23854
Sat, 10/11/2008 - 09:51
Auther :
Shortlink :
http://m.oananews.org//node/23854
The shortlink copeid
Pak seeks USD 10 bn bailout from US, UK to avoid bankruptcy
London, Oct 10 (PTI) Facing imminent bankruptcy, terror-stricken Pakistan has dispatched its top finance officials to Washington, London and other friendly world capitals seeking a lifeline of over USD 10 billion in emergency aid.
The mission to secure a six billion pound (USD 10.18
billion) bailout package is led by Shaukat Tareen, Pakistan
Prime Minister's Finance Adviser and Shamshad Akhtar, the
Governor of Pakistan's central bank, 'Daily Telegraph'
reported.
The Pakistani delegation is seeking an American and
British-backed lifeline to tide over the current crisis.
Oil-rich Gulf states have also been tapped to match
Western funds with extra billions to ensure that Pakistan,
which until recently touted itself as the 'next Asian Tiger',
avoids a balance of payments crisis, the report said.
Tareen, a suave former banker, was appointed this week
to spearhead the last ditch bid to avert the possible
bankruptcy after it was revealed that state reserves had
halved since democratic elections were held in March this year
and a coalition government led by the Pakistan People's Party
was formed.
"Tareen has given himself four weeks to salvage the
economy. High oil prices have combined with endemic corruption
and mismanagement to push Pakistan to the brink of
bankruptcy," the report said.
Pakistan's middle class shifted massive amounts of
capital overseas as a crisis of confidence in Pakistan's long
term future took hold following the assassination of former
Prime Minister Benazir Bhutto last December, it said,
analysing the cause for the latest crisis facing the nation.
A leading Pakistani private banker in Dubai, who has
acted as handmaiden to the exodus, said the collapse and
replacement of former President Pervez Musharraf's regime had
amounted to a devastating double blow.
"Capital flight has got to be stopped if the country
is to be turned around," he said. "But people take their cues
from the leaders. The looters are back in charge and if they
won't repatriate their money from Swiss bank accounts why
should we keep our money in Pakistan?"
While Pakistan's economy has repeatedly been on the
brink since independence in 1947, the stakes have never been
higher, the report noted.
Pakistan's new President Asif Ali Zardari, Bhutto's
widower, had hoped to raise a cash infusion at a 'friendly
states' summit in the United Arab Emirates next month. But the
economy has unravelled too quickly to wait, the report said.
"We have been here in the past but now Pakistan
urgently needs balance of payments support," said the
treasurer of a leading international bank in Karachi. "We need
some action this month."
Saudi Arabia and the conservative Arab monarchs have
signalled their willingness to divert part of their sovereign
wealth funds to shore up Pakistan. Gulf support will come at a
price with the Emirates determined to ensure its own food
security by buying up huge tracts of Sindh and Punjab
provinces.
Islamabad will be expected to grant blanket exemptions
on exports from its farms to the Gulf in return – an unpopular
move when 25 per cent inflation has forced the poor to
assemble in huge crowds for government subsidised wheat.
Pakistan has fallen a long way from the 'golden years'
of the Musharraf government, which appeared to have found a
formula for success, the report said. His regime provided six
years of currency stability as the economy grew six per cent a
year, doubling the gross domestic product.
Wholesale bank privatisation boosted the spending
power of the middle class but the money poured into a property
and stock market boom that has now evaporated.
Karachi, the country's economic capital, has borne the
brunt of the collapse. From its highs last year when it
attracted almost USD 1 billion of foreign investment, the
stock market has been practically shuttered.
Karachi Mayor Mustafa Kamal has had to scrap grand
plans for large scale projects that would improve the
infrastructure. "First it was inflation, then Musharraf's
political problems, then Zardari's election and now security,"
he said. "People are looking for things to settle down." PTI
The mission to secure a six billion pound (USD 10.18
billion) bailout package is led by Shaukat Tareen, Pakistan
Prime Minister's Finance Adviser and Shamshad Akhtar, the
Governor of Pakistan's central bank, 'Daily Telegraph'
reported.
The Pakistani delegation is seeking an American and
British-backed lifeline to tide over the current crisis.
Oil-rich Gulf states have also been tapped to match
Western funds with extra billions to ensure that Pakistan,
which until recently touted itself as the 'next Asian Tiger',
avoids a balance of payments crisis, the report said.
Tareen, a suave former banker, was appointed this week
to spearhead the last ditch bid to avert the possible
bankruptcy after it was revealed that state reserves had
halved since democratic elections were held in March this year
and a coalition government led by the Pakistan People's Party
was formed.
"Tareen has given himself four weeks to salvage the
economy. High oil prices have combined with endemic corruption
and mismanagement to push Pakistan to the brink of
bankruptcy," the report said.
Pakistan's middle class shifted massive amounts of
capital overseas as a crisis of confidence in Pakistan's long
term future took hold following the assassination of former
Prime Minister Benazir Bhutto last December, it said,
analysing the cause for the latest crisis facing the nation.
A leading Pakistani private banker in Dubai, who has
acted as handmaiden to the exodus, said the collapse and
replacement of former President Pervez Musharraf's regime had
amounted to a devastating double blow.
"Capital flight has got to be stopped if the country
is to be turned around," he said. "But people take their cues
from the leaders. The looters are back in charge and if they
won't repatriate their money from Swiss bank accounts why
should we keep our money in Pakistan?"
While Pakistan's economy has repeatedly been on the
brink since independence in 1947, the stakes have never been
higher, the report noted.
Pakistan's new President Asif Ali Zardari, Bhutto's
widower, had hoped to raise a cash infusion at a 'friendly
states' summit in the United Arab Emirates next month. But the
economy has unravelled too quickly to wait, the report said.
"We have been here in the past but now Pakistan
urgently needs balance of payments support," said the
treasurer of a leading international bank in Karachi. "We need
some action this month."
Saudi Arabia and the conservative Arab monarchs have
signalled their willingness to divert part of their sovereign
wealth funds to shore up Pakistan. Gulf support will come at a
price with the Emirates determined to ensure its own food
security by buying up huge tracts of Sindh and Punjab
provinces.
Islamabad will be expected to grant blanket exemptions
on exports from its farms to the Gulf in return – an unpopular
move when 25 per cent inflation has forced the poor to
assemble in huge crowds for government subsidised wheat.
Pakistan has fallen a long way from the 'golden years'
of the Musharraf government, which appeared to have found a
formula for success, the report said. His regime provided six
years of currency stability as the economy grew six per cent a
year, doubling the gross domestic product.
Wholesale bank privatisation boosted the spending
power of the middle class but the money poured into a property
and stock market boom that has now evaporated.
Karachi, the country's economic capital, has borne the
brunt of the collapse. From its highs last year when it
attracted almost USD 1 billion of foreign investment, the
stock market has been practically shuttered.
Karachi Mayor Mustafa Kamal has had to scrap grand
plans for large scale projects that would improve the
infrastructure. "First it was inflation, then Musharraf's
political problems, then Zardari's election and now security,"
he said. "People are looking for things to settle down." PTI
