International Monetary Fund (IMF) Managing Director Rodrigo de Rato on Monday announced that the Fund and other international donor agencies were ready to extend Pakistan as much funds as it needs for rehabilitation of quake victims and reconstruction of devastated areas.
Rato made this pledge during a joint press conference with Prime Minister Shaukat Aziz, here. He said, "Above all, I offer my deepest sympathy and condolence over the loss of lives and the sufferings caused by the massive October 8 earthquake. I have met President General Pervez Musharraf and Prime Minister Shaukat Aziz, as well as the members of the government's economic team, and had assured them that the IMF is ready to support Pakistan at this difficult time."
The IMF MD said he went to PIMS in the Capital to see the earthquake survivors and was greatly impressed by the care they were receiving from dedicated medical staff and volunteers.
"I also met Abdul Sattar Edhi to get firsthand information about the situation."
Rato added that Pakistan's economic gain is extremely impressive and the credit goes to market-oriented structural reforms programme. His advice was that Islamabad should continue with the reforms to sustain the current growth rate.
The IMF managing director said Pakistan's success story on economic front showed strong commitment of the government to its reform programme, which mainly focused on banking system, privatisation and trade liberalisation.
He said the programme and economic achievement improved the private sector's confidence substantially and at the same time enhanced its ability to compete in the world economy.
According to Rato, Pakistan was at the moment confronting short-term economic challenges; the need for emergency support and reconstruction in the areas affected by the earthquake.
He was of the view that widening of the budget deficit might be unavoidable for Pakistan to meet its future economic targets and recommended fiscal disciplinary measures to reduce inflation rate.
Rato welcomed initial measures of the government for tightening of monetary policies, but suggested further tightening for more improvement.
He maintained that Pakistan was also confronted with the sharp increase in international oil prices and said the authorities have appropriately allowed a substantial pass-on of this raise to the domestic petroleum products prices to help safeguard the budgetary position.
The IMF MD termed sustainability of higher economic growth rate, low living standards and poverty as short-term challenges and recommended that Pakistan should take tough measures for improvement in these areas.
He told a questioner that Pakistan's economic growth and better standing in the international rating make it an attractive destination for foreign direct investment. However, he wanted to see better mobilisation of domestic resources to increase the level of foreign investors' confidence.
Rato said that Government of Pakistan should expand tax net and strengthen revenue collections.
He appreciated confidence-building measures between India and Pakistan and said that the ongoing work towards liberalising trade between the two countries would benefit both.
The IMF managing director also assured that the Fund would continue to provide Pakistan policy advice and technical assistance to push forward its programme of economic progress.
Shaukat Aziz on the occasion said that the government was fully conscious of its economic challenges and taking all possible measures to sustain the current growth rate.
He said the government welcomes IMF's advice on economic policies and would give it due importance in framing policies. "Pakistan's reforms programme, which is based on deregulation, privatisation and liberalisation of economy, was a permanent feature," he added.
The Prime Minister said that Pakistan will present a clear picture of earthquake loss and funds required for reconstruction at the UN-sponsored conference scheduled on October 24 at Geneva.
He ruled out the possibility of seeking funds from the IMF for meeting budgetary targets and told a questioner that Islamabad did not seek write-off of its loan from the IMF during Monday's meetings.
Earlier, the IMF managing director held separate meetings with the President and Prime Minister, assuring them that IMF will play its role in seeking funds for relief and rehabilitation of earthquake victims.
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