Pakistan will not seek additional funding from the International Monetary Fund (IMF) after the $5.28 billion pledged during the Friends of Democratic Pakistan (FODP) meeting on 17 April, considered adequate to meet the requirements of the country, Federal Minister for Parliamentary Affairs and Senator Babar Awan told Business Recorder, here on Monday.
He was talking to this scribe exclusively after addressing the business community of the Capital. IMF's Senior Advisor Di Tata had, in a press conference on 6 February 2009, estimated Pakistan's total requirement at $13.4 billion for 2008/09. This estimate included the external current account deficit plus amortisation of medium-term and long term debt and maturing short term debt.
Pakistan received $5.668 billion foreign loans during the first nine months of the current fiscal year. A total of $3.947 billion has been released by the IMF till date - $3.1 billion as first tranche of the $7.6 billion stand-by arrangement in November 2008, and $847 million on March 31 2009 as the second tranche. Thus around 70 percent of all assistance to Pakistan in the first nine months of the current year can be sourced to the IMF stand by arrangement.
International financial institutions (IFIs) such as the World Bank account for an additional 20 to almost 25 percent of total assistance during the first nine months of the current financial year. There has been little bilateral support so far, apart from China; however the government remained hopeful that once it followed the IMF programme to the letter bilateral sources would be amenable to providing assistance in due course. The pledges made during the FODP meeting reflect that the government's optimism was not misplaced.
The remaining requirements for the current fiscal year are estimated at $8.3 billion according to the IMF estimates. The FODP have pledged $5.28 billion leaving a gap of $3.02 billion. However the external current account deficit has declined by $2 billion due to higher remittances which in turn leave a gap of less than $1 billion.