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IFIs ready to work with present govt on long-term basis

TAHIR DHINDSA

ISLAMABAD: International financial institutions (IFIs) are prepared to work with the military government on a long-term basis, highly-placed official of one of the donor agencies in Islamabad said.

Talking to Business Recorder here on Friday, he said all lending contracts with Pakistan will operate as usual with the current government, after it has fulfilled four major requirements considered necessary for any 'de facto' government, by the IFIs.

The four major criteria are: First, it should be fully in control of the situation. Second, It should be committed to carry forward reforms agreed with IFIs as contractual obligation. Third, the government should show commitment for fulfilling all international obligations, including debt servicing. And fourth, the government should be recognised by the international community, specially the neighbours.

If any de facto government fulfills all these requirements, IFIs wait for a few months and then go ahead with ongoing work 'as usual'. The military government of General Musharraf fulfills all these four requirements and a period of a few months has also lapsed. Therefore, he said, the IFIs are working fully with the government on different development projects and other loans.

Commenting on the forthcoming visit of the International Monetary Fund (IMF), which will decide the fate on the next tranche of US $ 1.6 billion Enhanced Structural Adjustment Facility (ESAF), which is about US $ 280 million, he said there should be no problem in disbursement. The official said, the mission is coming to review progress on different benchmarks stated in Policy Framework Paper (PFP).

He said since the government has already shown progress on major benchmarks like imposing general sales tax (GST) on utilities, and resolving tussle with independent power producers (IPPs), there is little chance that the IMF would deny the release of next tranche.

However, the government needs to maintain pace on structural adjustment policy and other economic reforms, the official concluded.