Pakistan wants IFC to go in a big way

Pakistan government wants the International Finance Corporation (IFC) "to go in a big way" in the country. Pakistan, sources said on Monday, has vast room in housing mortgage and banking sector, etc.
IFC is a member of the World Bank Group, and it promotes sustainable private sector investment in developing countries as way to reduce poverty and improve people's lives. So far, the IFC does not have "a very active programme in Pakistan," though they have financed some ventures.
Asked to comment, the sources said Pakistan's "credit worthiness has been increasing," and referred to the country's improved credit ratings and risk evaluations by Moody's and Standard & Poor's (S&P).
OPIC and EXIM Bank, which were close to public sector, have now opened to Pakistan's private sector. They have upgraded their credit, and extended a 1.2 billion dollar loan to Pakistan for purchase of eight 777 Boeings, at a lower 4.2 percent interest. "Our economic worthiness is increasing."
PIA has inducted three new Boeing 777-200ER, and is scheduled to get two to three long-range aircraft in the new calendar year.
"Those delivered were on 4.22 percent exposure fee. Now, Pakistan's credit rating has been improved by Organisation for Economic Co-operation and Development (OECD), by Moody's by S&P. Therefore, Pakistan is paying less on the remaining aircraft- on which our exposure fee would be three percent- and on spare parts, 4 to 2 percent in 12 years."
Of Overseas Private Investment Corporation (OPIC), the sources said, they have a programme to help- if you go with a viable project. OPIC wants to encourage foreign investment in Pakistan.
"For instance, they have 125 million dollar in guarantee which they have provided to the National Bank, for a 40 or 60 million dollar for investment in Pakistan. So, they have a counter guarantee- $40 million for UBL and another $25 million for MCB."
About foreign direct loan, the sources said, OPIC has given $150 million to Citibank for foreign investments in Pakistan, and additional $150 million dollars- as well as offered $75 million dollar guarantee for investment in Pakistan.
About $3 billion multi-year US assistance package offered to Pakistan at Camp David in 2003, the sources said "Pakistan is getting around $700 per year," for the last two years. Out of the total, $1.5 billion is for military and economic assistance, each.
The United States has written off $1.5 billion, out of $3 billion outstanding debts.
Under IDA-13 of the World Bank, which has now been completed. Pakistan got $1 billion in three years; while under the new IDA-14, the country is to get $1.5 billion ie an increase of 50 percent, each year, while the increase in case of India and Bangladesh is of 30 percent. Now, the sources said, Pakistan also represents Afghanistan and Nepal in International Development Association (IDA), which is part of the (WB). With IMF, Pakistan completed its PRGF programme successfully; and declined to accept last two tranches, which were subsequently extended to Sudan, as a gesture of goodwill.
Pakistan again was the first country that went to the international capital market by floating euro-bonds of $500 million, which were over-subscribed by $2 billion-which reflected confidence in Pakistan economy.
Asked to comment, the sources said Pakistan's credit worthiness has been increasing, and referred to the country's improved credit ratings and risk evaluations by Moody's and Standard and Poor's.
On matter of more aid coming from the US, the sources said while it was correct. However, the sources referred to the fact that the Pakistan economy had started an upward swing even before 9/11, and cited that in IMP, Pakistan graduated for Poverty Reduction and Growth Facility (PRGF) before September 11, 2001. Hence, it would not be correct to construe that we got PRGF and Paris Club rescheduling because America was very kind to us.
"Pakistan fared well during stand IMF's bye-arrangement, and the mission came to the country in the first week of September, 2001. They announced -that Pakistan qualifies for PRGF and a country cannot qualify for Paris Club, unless they have completed any programmes, which means, had we not graduated for PRGF, we would not have been qualifying for Paris Club.
The sources said, with over $12 billion national reserves, boosting exports of over $16 billion, high growth rate and inflation under check, Pakistan today is "in a much more comfortable" state of affairs economically. Pakistan does have good relations with International Financial Institutions (IFIs).