Pakistan moves US, UK for $10 billion emergency bailout

Mumbai: Terror-stricken Pakistan is seeking emergency funds from the US and the UK to the tune of $10 billion to emerge from the shadows of bankruptcy.

Pakistan has dispatched some of its top finance officials to Washington, London and other friendly countries seeking a lifeline of over $10 billion in emergency aid.

The delegation, led by Shaukat Tareen, finance advisor to Pakistan prime minister and central bank governor Shamshad Akhtar will seek a lifeline backed by the US and the UK to tide over the current crisis.

Pakistan has also approached oil-rich Gulf states for matching western aid to ensure that the country averts a balance of payment crisis.

Tareen has been specially assigned the job of coordinating a bailout after the country's foreign exchange reserves halved since the elections held in March this year and the formation of a coalition government led by the Pakistan People's Party.

High oil prices have complicated matters for Pakistan, whose economy has already been shattered by mismanagement and endemic corruption.

Pakistan also saw large-scale capital flight with the elite middle class and political heavy weights shifting funds to foreign countries amidst domestic uncertainties.

Pakistan's president Asif Ali Zardari was expecting to raise funds at a summit in the United Arab Emirates next month but the problem at home has worsened that there is no time now to wait.

Some Gulf countries, including Saudi Arabia, had signalled their willingness to divert part of their sovereign wealth funds to help Pakistan. But that was against owing huge tracts of Sindh and Punjab provinces in order to ensure food security for the Gulf emirates

The Gulf countries had also sought blanket exemptions on exports from its farms to the Gulf in return.

While the Musharraf government could manage a doubling of Pakistan's gross domestic product, with a six per cent growth rate and relative stability for around six years, much of the investment had gone to real estate and the stock market.

Now that the stock and realty boom has ended, Karachi, the country's economic capital, has borne the brunt of the collapse.

Meanwhile, minister for industries Ashwani Kumar said India too is increasingly being absorbed into the vortex of the global financal crisis even as the government and the Reserve Bank are doing their best to safeguard the interests of the people and steer it out of its adverse effects.

With the US accounting for 75 per cent of the country's exports, he said the country is going through a really rough patch and might take some time to return to normalcy.