War against terror bill Pakistan to seek release of $1.2bn

ISLAMABAD: Islamabad will take up with US authorities concerned the reimbursement of $1.2 billion war against terror bill borne during May, 2008 to March, 2009, on the sidelines of IMF Executive Board meeting due in Washington from March 25 to 27.

Advisor to Prime Minister on Finance Shaukat Tarin told The News in an exclusive talk: we will ask the US administration to immediately clear the dues amounting to $1.2 billion (Rs 95 billion).

Tarin said, Pakistan is experiencing financial constraints and if the said amount gets reimbursed, Pakistan would be at ease to achieve the target of 4.2 percent fiscal deficit set under the IMF bailout package.

Coming to IMF Executive Board meeting, he said: I would also place the formal request with Fund seeking the additional $4.5 billion other than $7.6 billion loan under the SBA (stand by arrangement).

To this effect, Pakistan would be seeking enhancement of IMF funding quota from five times to eight in the IMF Executive board meeting. And in case the IMF increases Pakistan quota to eight times, Islamabad would be having additional $4.5 billion in foreign reserves under the stand by arrangement.

Ukraine and Iceland had been given the eight times quota funding so Pakistan would follow the suit to this effect, said Tarin.

The executive board meeting will also approve the second tranche of $840 million from International Monetary Fund (IMF) under 23 months $7.6 billion loan. Pakistan was to get $750 million as second tranche, but now would receive $840 million because of the upward fluctuations in exchange rates against the special drawing rights (SDR).

To a question, Tarin said that the government and a consortium of major commercial banks would strike the deal by end of the current month for generating Rs98 billion in a bid to erase the circular debt that is affecting the smooth running of energy sector. He said that the government requires Rs80 billion net to resolve the circular debt in energy sector.

He disclosed that the whole details of the projects which are to be marketed in Friends of Pakistan meeting to be held in Tokyo on April 17, will be provided to the ambassadors of the member countries of FoP so that respective countries could have ample time to identify the areas in the projects on which they intend to provide funding.