Pakistan seeks massive loans to avoid bankruptcy

[Whiffleball]

Pakistan seeks $9 bln IMF bailout to avert crisis (http://www.guardian.co.uk/business/feedarticle/8021411)



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By Kamran Haider and Augustine Anthony

ISLAMABAD, Nov 14 (Reuters) - Pakistan has asked the International Monetary Fund for a $9 billion bailout along with help from other lenders to avert a balance of payments crisis, a finance ministry official said on Friday.

Credit ratings agency Standard & Poor's cited Pakistan's tardiness in securing foreign assistance for a decision on Friday to lower its rating on the nation's sovereign debt deeper into junk bond territory.

"We are asking $9 billion from the IMF, they are talking about $7.4 billion. IMF can give us up to $7.6 billion," a finance ministry official told Reuters on condition of anonymity.

Shaukat Tarin, Pakistan's top economic adviser, told Reuters on Thursday that the government would soon deliver a letter of intent to the IMF, paving the way for the world's lender of last resort to release funds rapidly.

Pakistan's 8-month-old civilian government is banking on goodwill towards a country undergoing a transition to democracy after more than 8 years of military rule.

The international community is concerned that an economic meltdown in the nuclear-armed state could play into the hands of al Qaeda and allied Islamist militant groups seeking to destabilise the Muslim nation of 170 million.

Another official told Reuters on Friday that the letter of intent would probably be sent before Monday, when potential donors are due to gather in Abu Dhabi for a "Friends of Pakistan" conference.

The conference of officials is not expected to result in loans being pledged, but it could pave the way for a ministerial meeting later.

Tarin told the Pakistan Senate on Thursday that the country was likely to receive $5-6 billion from the World Bank and other international financial institutions by December, according to the Associated Press of Pakistan.
He told Reuters a loan of $500 million from China could arrive within weeks.

Markets were disappointed when President Asif Ali Zardari and Tarin returned with little to show from a trip to Beijing last month to garner support from one of Pakistan's most steadfast allies.

China, like other potential lenders, is believed to have encouraged Pakistan to seek IMF assistance in order to introduce some discipline to economic management, analysts say.

Pakistani officials have been coy about saying whether a loan was being sought from the IMF due to domestic political considerations, but Tarin told the Senate that the Fund "has agreed to provide (a) facility on our own terms and conditions".

One condition would be that the government stops borrowing from the central bank, he added.


Pakistan's central bank said on Thursday it had received $200 million from the Islamic Development Bank.

State Bank of Pakistan's foreign currency reserves are barely enough to cover nine weeks of imports.

With the margin for error thinning by the day, S&P cut Pakistan's long term foreign currency sovereign credit rating to CCC from CCC+, putting it eight notches below investment grade.

Unless Pakistan gets the support soon it will default on a international bond set to mature in February. The bond market priced in a potential default for Pakistani debt months ago.

The central bank raised its key interest rate by 200 basis points to 15 percent on Wednesday, going some way to please the IMF.

A finance ministry official said the IMF would like to see Pakistani interest rates above the core inflation rate, currently running at around 18.3 percent.

Several economies have crumbled in the face of first soaring prices for raw materials earlier this year and more recently a deepening global financial crisis.

The IMF has already approved loan programmes for countries including Ukraine, Hungary and Georgia.

[Morfin]

I've got an idea: Pakistan, you can get your money when you start getting serious about fighting terrorism. Kick out al Qaeda. Stop giving them shelter. 'Til then, fuck you.

Airstrike Kills Qaeda-Linked Militant in Pakistan

PESHAWAR, Pakistan — A British militant who was a liaison to Al Qaeda and was a main suspect in the plot to blow up trans-Atlantic airliners in 2006 was killed Saturday in a missile strike by an American aircraft in northern Pakistan, senior Pakistani and American officials said.

The militant, Rashid Rauf, was among the five people killed in the attack by a remotely piloted aircraft in North Waziristan, close to the Afghan border, the officials said. He is perhaps the best-known of the figures killed in an American airstrike campaign there that has intensified since August and has caused increased strains between the United States and Pakistan.

In August 2006, Mr. Rauf, a Briton of Pakistani descent, was detained in Pakistan, triggering the arrest of 25 suspects in Britain in connection with what prosecutors said was a plot to destroy seven airliners headed for the United States and Canada. This September, a British jury convicted three of eight defendants of conspiracy to commit murder, failing to reach verdicts on the more serious charge of using beverage bottles filled with liquid explosives to blow up the aircraft.

But Mr. Rauf was not among those defendants. All terrorism charges against him in that case were dropped in December 2006. A year later, he slipped out of his handcuffs and ran from his guards after a court hearing in Islamabad, Pakistan, on a separate case in which he faced extradition to Britain.

Pakistani officials confirmed on Saturday that Mr. Rauf was the main target of the American missile strike, with Abu Zubair al-Masri, an operative of Al Qaeda. “Rashid Rauf and al-Masri were the targets and have apparently been killed in the missile strike,” a senior government official said.

In Washington, an American official confirmed the death of Mr. Rauf. “There are good reasons to believe, as the Pakistanis have said, that this major terrorist is gone,” the official said, speaking on the condition of anonymity.

Residents in the village of Alikhel, in the Mirali area of North Waziristan, said two missiles hit the well-guarded compound of a Taliban commander, Maulvi Khaliq Noor, Saturday morning. Three children were wounded in the attack, the residents said.

Brought up in Britain by parents who were Pakistani immigrants from Kashmir, Mr. Rauf, 27, settled in southern Punjab Province in Pakistan in 2002. He married into a family at the center of the Army of Muhammad, an outlawed Islamist group.

When Pakistani authorities arrested him in August 2006, the interior minister at the time, Aftab Ahmed Sherpao, called him “a key Al Qaeda operative.” Mr. Rauf was described at the time as being instrumental in devising the airline plot.

The British police, who had the group in Britain under surveillance at the time, complained that the Pakistani police arrested Mr. Rauf too early and forced them to round up the suspects in Britain before enough incriminating evidence had been gathered.

Mr. Rauf’s escape was an embarrassment to the government because it showed police laxity a day after Pervez Musharraf, who was president then, had announced that the security forces had thwarted militantism and that stability was returning to Pakistan.

Mr. Rauf was wanted in Britain as a suspect in the murder of an uncle who was stabbed in Birmingham in April 2002.

The missile strike in North Waziristan on Saturday was the third by the Americans in almost three days. Since August, there have been more than two dozen strikes by remotely piloted aircraft, including one last week that hit a settled area in the North-West Frontier Province outside the tribal region.

American military commanders have declared the strikes successful in eliminating important Qaeda and Taliban figures.

But the Pakistani authorities have protested that the strikes are an infringement of national sovereignty and harm the government’s efforts to persuade the Pakistani public that the war against the militants is in the country’s interest.

Many Pakistanis argue that the American missile strikes are responsible for the suicide bomb attacks that have struck law enforcement targets, funerals and politicians in the North-West Frontier Province and in Islamabad, the capital.

After the strike on Saturday, a Taliban spokesman, Ahmadullah Ahmadi, said that no foreigners had been killed.

“Americans have killed innocent people and none of them were foreigners,” he said in a statement issued on behalf of a top militant commander, Hafiz Gul Bahadar, in Miram Shah, the main town in North Waziristan.

Mr. Ahmadi said the militants would seek revenge. “We will avenge the death of innocent people by striking in settled areas” against security forces, he said.Link (http://www.nytimes.com/2008/11/23/world/asia/23rauf.html?_r=1&hp)

[Grieves]

They could just sell some of their nukes.