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Pakistan may seek $874 mn from IMF

Pakistan may have to seek an additional $847 million from the International Monetary Fund (IMF) if the aid the US has proposed under a controversial bill does not come through, the country's finance minister has said.

business Updated: Oct 15, 2009 14:05 IST

Pakistan may have to seek an additional $847 million from the International Monetary Fund (IMF) if the aid the US has proposed under a controversial bill does not come through, the country's finance minister has said.

Pakistan, in its budget for 2009-10, had estimated a US grant of $874 million for the fiscal that began July 1 but the ongoing impasse on the bill had put this at stake and the government would have to take measures to bridge the gap, Dawn Thursday quoted Shaukat Tarin as saying.

If Pakistan does not get the US grant, it will have to approach the IMF for converting the $874 million into a loan under the Standby Arrangements but this would "have no serious effect on the fiscal deficit", the minister maintained.

Under the Kerry-Lugar Bill that is currently being considered by Congress, Pakistan is to annually get $1.5 billion in non-military aid for five years. Pakistan is opposed to the bill in its present form, saying it puts severe conditionalities on the manner in which the money will be utilized and impinges on its sovereignty.

Meanwhile, mixed signals have emerged from Washington on the Pakistani stand.

Secretary of State Hillary Clinton has been quoted as saying the conditions would be removed from the bill over a couple of years.

However, an explanatory statement issued by the US Congress on Wednesday says that the Kerry-Lugar Bill does not suggest any US role in micromanaging Pakistan's internal affairs, including the promotions or transfers of military officers.

The five-page statement issued by Senator John Kerry, Senator Richard Lugar and Congressman Howard Berman said that the legislation was not binding on Islamabad. Pakistani Foreign Minister Shah Mrhmood Qureshi, who is currently in Washington in a bid to resolve the controversy over the bill, was present when the statement was released.

The statement says that the Kerry-Lugar Bill does not seek in any way to compromise Pakistan's sovereignty or impinge on the country's national security interests. It says that any interpretation suggesting that Washington does not fully recognise and respect Pakistan's sovereignty would be directly to Congressional intent.