October 24, 2008	Friday	Shawwal 24, 1429

ISLAMABAD, Oct 23: Pakistan needs hard cash in 15 to 30 days to fill a financing gap ranging between $3.5 and $4.5 billion to build up dwindling forex reserves, Adviser to Prime Minister on Finance Shaukat Tareen said on Thursday.

Briefing the media on options for a bailout of the economy, Mr Tareen said “the government cannot wait for more than 30 days to get cash assistance from multilateral lenders and friendly governments merely to avoid recourse to the International Monetary Fund.”

“We are running out of time. We cannot wait for long.”

Mr Tareen said Islamabad had not “formally” asked for a facility from the IMF. “We are still hoping to secure funds from other multilateral lenders and friendly governments.

“We have not formally requested the board of the IMF for a facility, as of now. When we believe we won’t get enough money from ‘plan A or B’, the government will make a formal request,” he said.

“We have started discussions with the IMF in advance to be ready for all options. In case of no from other sources, we won’t have to wait for long to get IMF facility,” Shaukat Tareen said.

Under plan A, the government is looking for $1.5 billion from the World Bank, $1.6 billion from ADB, $800 million from DFID, $500 million from the IDB and $1.5 billion from workers’ remittances bonds.

“This is in excess of our needs and does not include assistance from the ‘Friends of Pakistan’ forum,” the adviser said. “Friends of Pakistan have good intention to help us. But we cannot wait as these governments take time for taking decision.”

He brushed aside an apprehension that “friends of Pakistan” were not ready to provide cash. “We have discussed only the agenda items for the dialogue in Abu Dhabi with the president. We have to give menu to Friends of Pakistan for help,” he added.

In reply to a question, Mr Tareen said ‘Friends’ were “ready to help us, but we are running out time”.

“You will see all friends will come to help us. It is just a matter of time,” he added. “But time is of the essence.”

He further said that Pakistan was in dire need of assistance to build its foreign exchange reserves. The reserves at present were only enough to fund imports for two months.

He agreed with a questioner that the current global crisis may have diverted attention of friendly countries from Pakistan for the time being, but added that they would help Pakistan eventually. “The Saudi oil facility is still on,” he said. It would be taken up in the meeting in Abu Dhabi next month.

Shaukat Tareen said Pakistan would prefer aid from the United States and the European Union to preferential market access. “We will be willing to negotiate free trade agreements (FTAs) with USA and EU rather than just seeking one-time cash assistance,” the adviser remarked.

The IMF has already started spadework for offering assistance to developing countries, including Pakistan.

He said a “home-grown” economic stabilisation programme had already been submitted to the IMF. “The governor of State Bank and the finance secretary have already left for Dubai for discussions with Fund representatives,” he added.

Mr Tareen said the proposed plan required Pakistan to bring down the fiscal deficit to 4.3 per cent. “We have said we will not borrow money from the State Bank this year. We have said we will keep the exchange rate flexible and curtail expenditure.”

Any IMF facility would have to be on the basis of a plan Pakistan has proposed to the fund. “I would love to have more money coming. The IMF programme is for 24 months. We will make a long-term policy to sustain growth,” Shaukat Tareen said.

In reply to a question, he said the notification regarding changes in the national finance commission (NFC) would be made soon. “The file is already on my table. It involves some legal problems, which will be rectified soon,” he added.