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Thursday, September 17, 1998

US offers Pak $5 bn bail-out package

PRESS TRUST OF INDIA  
ISLAMABAD, SEPT 16: The United States has offered Pakistan a handsome financial bail-out package of around five billion US dollars if the Nawaz Sharif government manages to ward off the stiff domestic resistance by signing the Comprehensive Test Ban Treaty (CTBT), according to media reports.

The bail-out package which also includes a five-year moratorium on its debt repayment commitments, was finalised with the US authorities when Prime Minister Nawaz Sharif's special envoy and his younger brother Shahbaz Sharif, had visited the United States recently, The Nation reported quoting official sources.

But apart from the foremost pre-condition of the signing of CTBT a number of stiff economic conditions have also been attached with the package, such as large scale privatisation, rationalisation of tariffs, removal of subsidies, good governance and imposition of agricultural tax, the report said.

The total packages includes an augmented but long-term financial support from the International MonetaryFund, the World Bank and other international lending agencies while the US authorities have also promised to return nearly 600 million dollars which Pakistan had paid to the US 10 years ago in return for 28 F-16 aircraft which were never delivered.

The report further said that the financial package offered now to Pakistan was even better than what it was offered before May 28 for not carrying the nuclear tests.

The package would help Pakistan overcome its difficult balance of payment problems and the country's foreign exchange reserve would swell to $2.5 billion from the current precarious levels of $700 million, the report claimed.

It further said the signing of CTBT by Pakistan would also open up the flow of foreign funds into Pakistan.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.


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