LONDON: A respected British daily “Financial
Times” has urged the international community to help bail out
Pakistan from its current financial problems.
“President Asif Ali Zardari must be given the means to try
to overcome the current crisis as well as improve the country's
long-term prospects. The best hope is an IMF loan, augmented by
individual countries, that is flexible on conditions without
compromising on the most vital of reforms,” said the influential
paper in a comment.
The paper said amid global financial turmoil, countries are
queuing up to IMF for support and Pakistan is the most precarious
It noted that Pakistan's economy is in trouble with growth
slowing, high inflation, the current account deficit widening
in the past fiscal year and the IMF estimates the budget deficit
to have been 7.7 per cent of GDP.
“A loan from the IMF, possibly jointly with other international
institutions and bilateral donors, would shore up confidence. Pakistan
may need up to $ 15bn over two years. This should stave off any
However, FT said in order to address long-term problems,
structural reforms are needed, as they have been for years.
FT said IMF faces a dilemma of its ability to force reform
by attaching conditions to the loan as heavy-handed intervention
would be deeply unpopular in Pakistan.
But if some aspects of conditionality look too risky,
Pakistan's government should nevertheless be induced to endorse
tax reform, raise spending on education and commit to rebuilding
the country's institutions, it added.
The paper spoke of Pakistan's strategic importance and said
any loan will have a political dimension given country's unresolved
conflict with India over Kashmir and has also been sucked into
fighting on its Afghan border.