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$7.6-billion IMF loan for Pakistan

— Photo: AFP

An anti-IMF and World Bank rally in Islamabad on Wednesday.

ISLAMABAD: It is now official: the International Monetary Fund (IMF) will lend money to Pakistan to prevent the country from going into the red.

Shaukat Tareen, the recently-appointed adviser to the Prime Minister on Finance, told a news conference in Karachi on Saturday that Pakistan had asked the IMF for a stand-by credit facility of $7.6 billion.

This is the minimum amount it is entitled to based on its IMF quota, said Mr. Tareen. The loan is to be spread over 23 months, or seven quarters.

At a variable interest rate — depending on market conditions — between 3.51 per cent to 4.51 per cent, it is to be repaid between the financial years 2011-12 and 2015-16.

Pakistan will formally apply for the loan next week, but Mr. Tareen said the IMF had already agreed to lend the amount. Mr. Tareen said he was hopeful the first trance of $4 billion would be delivered this month, while the rest of the amount is expected over the next year.

He was emphatic that there were no painful strings attached to the loan. The IMF had endorsed Pakistan’s own plan for economic recovery, which did not include a cut in the defence budget. The media here had earlier reported the country’s defence expenditure was in the crosshairs of the IMF.

Mr. Tareen said the government would also continue to lobby friendly countries for financial help. While Pakistan’s immediate financial crunch looks set to end soon, its security troubles continue and are far from over.

On the heels of the killing of an American working for USAID and the kidnapping of an Iranian diplomat in Peshawar earlier this week, a Japanese and an Afghan journalist were injured on Friday in what was apparently an attempt to kidnap them while they were travelling in the Khyber Agency neighbouring Peshawar.

Motoki Yotsukura of Asahi Shimbun and Sami Yousufzai of Newsweek had bullet injuries after being shot at by three men. They were to meet and interview a militant leader in the Khyber Agency.

Earlier on Friday, three missiles fired by suspected U.S. unmanned aircraft killed 13 people in North Waziristan.

Nine Arabs and four local tribesmen were reported to be among the dead.

President Asif Ali Zardari, who is on an official visit to the U.S., said in an interview that such attacks were “undermining my [country’s] sovereignty and it is not helping win the hearts and minds of people.”

But he seemed to justify U.S. actions, too, in saying that “obviously, people who [are conducting] the strikes are confident that they are doing something, otherwise they wouldn’t be at it.”

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