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| India-Pakistan |
| Pakistan to seek waiver from IMF |
| 2009-01-23 |
| ISLAMABAD: Pakistan would have to seek waiver from the International Monetary Fund on the targeted expenditure cut under the 23-month standby bailout loaning programme for getting its second tranche through upcoming review next month. According to well-placed sources, the perpetuation of inflationary pressures despite increase of base interest rate by the central bank to 15 per cent have not allowed the government to cut the current expenditures that keep on rather inflating. So much so that certain Ministries and their Attached Departments are, reportedly, facing blockages of salaries due to cash starvation at the national exchequer. The sources told TheNation that the extraordinary security situation, both internal and external, had also increased pressures on the overall current expenditures that the government was supposed to cut under the agreement with the IMF. Initially, the internal security was a problem, while unusual movement of the armed forces to stay alert on both western and eastern borders has incurred a lot of additional cost that was never budgeted in the fiscal policy of 2008-09, the sources said. Therefore, the sources said, the government would explain to the IMF this extraordinary situation arising out of the tensions which escalated with India, during the FundÂ’s mission here to review basically the second quarter of the current financial year ending December 31, 2008. Although the real impact of these extra-pressures on the current expenditures would be covered in the second review of the ongoing quarter after it ends on March 31, 2009, the upcoming review mission would certainly note the directions of the economy, the sources said. Therefore, they need to be explained that the current expenditures were beyond the governmentÂ’s control to be curtailed within the stipulated period in the given security scenario, the sources added. Keeping in view the criticality of the contingency defence and security needs, the sources hoped that IMF might not ask for a formal request for waiver on the targeted expenditure cut. Secondly, the sources feared that wrath of expenditure cut might be coming down to the development side that the government had already agreed with the IMF to reprioritize. |
| Posted by:john frum |
| #1 "Ummmmmm no. Next!" |
| Posted by: Frank G 2009-01-23 19:16 |