Pakistan will seek an additional $4.5 billion loan from the International Monetary Fund to help revive an economy hurt by fighting the global war against terrorism, Bloomberg reported.
"We will ask the board of directors for the amount as the war on terror has caused serious economic problems," Shaukat Tarin, the finance adviser to the prime minister, said yesterday in a telephone interview from Islamabad. The additional funds would boost the country's total borrowing from the IMF to more than $12 billion, he said.
South Asia's second-biggest economy got a $7.6 billion loan from the IMF in November, to be disbursed over 23 months, as it sought to avoid defaulting on its debt. The country got $3.1 billion as the first installment by Nov. 27, boosting foreign- currency reserves held by the central bank to $6.9 billion in February from $3.45 billion four months ago.
President Asif Ali Zardari is facing pressure from the U.S. to step up the fight against Taliban and al-Qaeda insurgents along the border with Afghanistan. The country has received about $10 billion in aid from the U.S. since 2001, when former president Pervez Musharraf became an ally in the global campaign against terrorism. Musharraf quit in August.
Pakistani and IMF officials began two weeks of talks in Dubai, United Arab Emirates yesterday as part of a review for disbursing the second installment of the November loan, Tarin said, without saying how much the country is spending on fighting militants.
For the additional loan, Pakistan doesn't want to negotiate new conditions with the IMF at the end of 23 months, Tarin said. "We have met all major conditions" set by the IMF, he said.
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