KARACHI, Dec 31: The newly-elected Jamali government has already declared that the government has enough support for balance of payment and will not go for a new IMF loans after the completion of $3 billion plus Poverty Reduction and Growth Facility (PRGF).

The finance ministry officials say the new government may take its own decision in talks with multilateral donor agencies on poverty reduction strategy which provides basis for the continued support under PRGF. Analysts believe that Pakistan, which joined the IMF on July 11, 1950, is likely to open talks with the IMF seeking more flexibility in their conditionalities.

Economic Adviser to PM on finance Shaukat Aziz and SBP Governor Dr Ishrat Hussain have been quoted in press that Pakistan will not need fresh aid from the IMF after the current programme ends in 2004. “This should be the last programme,” said Shauket recently.

It is widely claimed that the present government will continue the economic reform agenda agreed with the IMF by the previous military regime as all the negotiations with the donor agencies were held by Shaukat Aziz who is presently serving as adviser to the PM on finance.

The economic indicators are showing a steep rise. The foreign exchange reserves have risen to a record high of over $9 billion, home remittances have touched a high growth of over 126 per cent to $1.784 billion in July-Nov 2002 period with an average of $356.89 per month and the foreign direct investment (FDI) registered an increase of 186 per cent to $463.1 million in the same period. All these sound indicators have enabled the country to have a very comfortable external liquidity position.

Pakistan’s total external liabilities — public & publicly guaranteed debt, private non-guaranteed debts, IMF and foreign exchange liabilities — stand at $36.50 billion.

However, the officials say the ongoing lending/disbursement by the World Bank and the Asian Development Bank for various sectors/projects undertaken by these two banks would go on as per schedule.

The current World Bank lending to Pakistan as of July 2002 amounted to $1.157 billion. The projects include: Financial sector ($390 million), energy & mining sector ($350 million), urban development ($21.5 million), transport ($3 million), rural sector ($306.1 million), public sector governance ($28.8 million), global information/communications technology ($21.9 million), education ($22.7 million) and environment ($13 million).

Five more projects worth $314.61 million to be undertaken by the World Bank are in the pipeline, awaiting the final approval by the WB board. Pakistan joined the World Bank in 1950. Since then, the Bank has approved 242 loans, amounting to $13 billion, of which 146 are interest free IDA Credits.

The Asian Development Bank, a contributor to the economic uplift of Pakistan, in May 2002, announced $2.5 billion assistance over the period from 2003 to 2005. This is a part of ADB’s new Pakistan country strategy and programme. Over 70 per cent of the assistance will finance programmes aimed at reducing poverty, reviving economic growth, and promoting good governance. By sector, 35pc is likely to go to energy, transport and communications, followed by social infrastructure (25pc), governance, finance and trade (23pc), and agriculture, natural resources and rural development (17pc). Pakistan has been a member of ADB since 1966.