Bhutto Says Pakistan Economy Stands on Brink of Default
September 4, 2000 - 0:0
ISLAMABAD Former prime minister Benazir Bhutto Sunday warned that Pakistan's economy stands on the brink of default.
"With Islamabad on the brink of a default, emergency International Monetary Fund rules born of the South American crisis could have been triggered into effect," Bhutto said in a newspaper article published Sunday.
She said once Pakistan's reserves go down to $600 million, the IMF could ask the military regime of General Pervez Musharraf to come up with a stronger economic performance, failing which it could extend a standby loan to keep the country "just limping along in an oxygen tent", AFP reported.
One of the factors motivating the IMF in giving the oxygen assistance could be the impact of a Pakistani default on other South Asian economies, she said.
But a standby loan will be a double-edged weapon, she said. While it will give a short breather to the regime, it will simultaneously signal markets of the lack of confidence that international financial institutions have in the stewardship of the man who took over with great promise less than a year ago.
Because of corruption and recession, Pakistan's economy has been on the slide and on dole for many years.
The regime's cajoling and enticements have not made it revive.
Last year, the ousted civilian government got the foreign debt payments rescheduled but the military regime has no money to repay the lenders the five billion dollars that become due in 2001.
Bhutto said the IMF would make standby loan contingent on harsh economic measures.
"The generals will have the choice of cutting the bloated defense expenditure or burdening the Pakistani people further. They are unlikely to annoy colleagues.
It appears the common man will once again have to bear the burden of follies of the regime." "Appalled by the state holding citizens to ransom for money legitimately earned, many Pakistanis are fleeing to foreign shores. According to one estimate, about four billion dollars have been transferred to Canada alone," she said.
Bhutto herself went into self-exile just before a court convicted her, and her jailed husband Asif Ali Zardari, of corruption in April 1999. The present military regime has also instituted cases against the couple.
(DPA)
"With Islamabad on the brink of a default, emergency International Monetary Fund rules born of the South American crisis could have been triggered into effect," Bhutto said in a newspaper article published Sunday.
She said once Pakistan's reserves go down to $600 million, the IMF could ask the military regime of General Pervez Musharraf to come up with a stronger economic performance, failing which it could extend a standby loan to keep the country "just limping along in an oxygen tent", AFP reported.
One of the factors motivating the IMF in giving the oxygen assistance could be the impact of a Pakistani default on other South Asian economies, she said.
But a standby loan will be a double-edged weapon, she said. While it will give a short breather to the regime, it will simultaneously signal markets of the lack of confidence that international financial institutions have in the stewardship of the man who took over with great promise less than a year ago.
Because of corruption and recession, Pakistan's economy has been on the slide and on dole for many years.
The regime's cajoling and enticements have not made it revive.
Last year, the ousted civilian government got the foreign debt payments rescheduled but the military regime has no money to repay the lenders the five billion dollars that become due in 2001.
Bhutto said the IMF would make standby loan contingent on harsh economic measures.
"The generals will have the choice of cutting the bloated defense expenditure or burdening the Pakistani people further. They are unlikely to annoy colleagues.
It appears the common man will once again have to bear the burden of follies of the regime." "Appalled by the state holding citizens to ransom for money legitimately earned, many Pakistanis are fleeing to foreign shores. According to one estimate, about four billion dollars have been transferred to Canada alone," she said.
Bhutto herself went into self-exile just before a court convicted her, and her jailed husband Asif Ali Zardari, of corruption in April 1999. The present military regime has also instituted cases against the couple.
(DPA)