April 08, 2008	Tuesday	Rabi-us-Sani 1, 1429

ISLAMABAD, April 7: Major international donors have been told by the coalition government that it cannot act on their advice to stick to the economic reforms agenda pursued over the past eight years.

Informed sources told Dawn on Monday that drastic measures were needed to steer the country out of the crisis which the World Bank, International Monetary Fund and Asian Development Bank said was worrying them.The donors want the new government to implement the agenda primarily designed to promote ‘good governance’. They criticised the PML-Q government for not undertaking the second generation reforms and warned that any major deviation could plunge the country into a serious economic crisis.

Local officials of the World Bank, IMF, ADB and International Finance Corporation (IFC) avoid offering any direct comment on the economic situation in Pakistan. However, they have been saying privately that all is not well and that they are ready to ‘rescue’ the new government provided “it stays the course and avoids taking new measures hurriedly”.

They are of the view that if there is no continuity and consistency in polices, things would get worse, particularly in terms of ensuring better GDP growth rate over the next few years.

“There is a slowdown in economy due to various reasons and this is not good for the country,” a source said.

An economic team led by Finance Minister Ishaq Dar is leaving for Washington on April 9 to attend a four-day joint meeting of the World Bank and IMF, beginning on April 11.

The sources said that although the WB-IMF meetings were part of the Article IV consultations, the delegation would apprise the heads of the Bretenwood institutions of the state of economy and short-, medium-and long-term ‘corrective measures’ Pakistan needed to adopt.

Finance Minister Ishaq Dar told Dawn that he was not going to the United States to seek any budgetary support from the World Bank and the IMF. He said he would discuss the overall economic situation and seek their views on it.

Responding to a question, he said he was not taking with him any ‘begging bowl’ which was the hallmark of the previous government. “This begging bowl was never broken by the Shaukat Aziz government.”

Mr Dar said the coalition government would have to devise new economic policies and implement them wisely and prudently to clear what he called the “huge economic mess” left by the previous government.

Asked if he would discuss any new financial arrangement with the World Bank and IMF, he said that acquiring foreign loans would not solve the economic problems faced by the country.

“Over $70 billion of loans were acquired over the past eight years by the previous government, but do you see any positive impact on the economy,” the finance minister asked.

Pakistan’s debt liabilities, he said, had increased manifold which were now causing serious problems for the economy.