[An Nahar] With foreign reserves diminishing fast, Pakistain is on the brink of an economic crisis that may force its new government to ask for an unpopular bailout from the International Monetary Fund requiring a sweeping overhaul of the country's economy.The troubles could inject a new element of instability into the nuclear-armed nation of 180 million people that Washington is relying on to combat Islamic snuffies at home and to help negotiate an end to the war in neighboring Afghanistan.
Pakistain's foreign currency reserves stood at just $6.4 billion as of May 17, down from more than $14 billion two years ago. That is only enough to cover about 1.5 months' worth of imports while the IMF considers adequate foreign reserves for any country enough to cover three months of imports.
Bottoming out could bring painful consequences: A run on the banks by panicked citizens anxious to convert savings into dollars amid fears of a devaluation, a withdrawal from the stock market, a collapse of economic activity and higher unemployment.
The presumptive head of the new government, former Prime Minister
Nawaz Sharif... served two non-consecutive terms as prime minister, heads the Pakistain Moslem League (Nawaz). Noted for his spectacular corruption, the 1998 Pak nuclear test, border war with India, and for being tossed by General Musharraf...
, has made fixing the economy his main priority. But even though a crisis may be only six to nine months away, his incoming government appears hesitant about taking IMF money. They know it will come with conditions attached that would likely stir discontent on the streets, such as raising energy prices and broadening tax collection significantly.
"If we manage for six months, then of course we don't have to go" to the IMF, said Sartaj Aziz, a key economic adviser to the government about to take power. He told The News Agency that Dare Not be Named that in his view, the country might not need a bailout if it moves quickly enough to boost growth and gets help from key allies such as Soddy Arabia
...a kingdom taking up the bulk of the Arabian peninsula. Its primary economic activity involves exporting oil and soaking Islamic rubes on the annual hajj pilgrimage. The country supports a large number of princes in whatcha might call princely splendor. When the oil runs out the rest of the world is going to kick sand in the Soddy national face...
, which would come with fewer strings attached.