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economic relief it wants in lieu of supporting
ISLAMABAD, October 24
(Internews): Pakistan has prepared a 10-point
multi dimensional economic relief package that it expects from various
bilateral and multilateral quarters, sources said here Wednesday.
"The package details seeking an immediate and extensive debt-relief
ahead of a debt write-off has been forwarded to the United States," an
official of the Ministry of Finance confirmed.
Visiting US Under Secretary of State for Economic, Business and
Agricultural Affairs Alan P Larson had received the 10-point package and
had largely agreed on it with a view to fully support Pakistan in
acknowledgement of the support the country had extended to the US in its
war on terrorism, diplomatic sources also confirm.
The Pakistan government, through the proposed package, thanked the US
and its allies for committing $800 million immediate grant, and called
for bigger financial allocations in shape of cash grants to provide
certain immediate relief to its economy.
According to the sources, the package calls for re-profiling of $12
billion bilateral debt in order to bring it to a sustainable level so
that it could be serviced easily. This re-profiling will provide
temporary breathing space if not a permanent solution to the country's
The package also seeks a larger size of the Poverty Reduction Growth
Facility (PRGF) than the one, which was being discussed before Sept 11
terror attacks in New York and Washington.
Pakistan was earlier given to understand to get about $1.5 billion under
the PRGF by virtue of having maximum 90 per cent quota under $1.3
billion Special Drawing Rights (SDRs).
This quota could now be stretched to 130 or 140 per cent through a new
amendment in IMF rules as the Americans are fully supporting the
government of President Pervez Musharraf.
The PRGF was being sought on highly concessional terms and could be
offered to Pakistan at only 0.5 to 0.7 per cent service charges.
The sources said Larson had proposed enhancement of Pakistan's maximum
quota in the IMF from 90 per cent to 120 per cent. But he had not
disagreed that it could be further increased, as the country was
currently facing an unusual economic situation, they added.
The package wants new assistance from international financial
institutions on new and better terms and not on existing Houston or
Pakistan has so far been offered assistance under Houston terms and not
under Naples terms, which were relatively more favourable.
"But the future assistance is likely to be on new terms other than
Houston and Naples terms because of Washington's renewed support to
Islamabad, a diplomatic source said.
The sources said Pakistan was not against a debt write-off, but did
understand that it was not currently possible for bilateral donors as
their respective constitutions did not allow them to have such a
However, they said the US had assured that it would look for changing
laws as had been changed for lifting political and military sanctions
against Pakistan. -Internews
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