Pakistan

As an industrialist in Pakistan’s southern port city of Karachi recounts his woes, from frequent power cuts to a shortage of trained workers, his accountant barges in with a question. “Sir, how much should we earn from the farm this year?” the Financial Times reported. “Let me see how much we need to earn from the farm and get back to you,” the industrialist replies. The encounter provides a glimpse of one of Pakistan’s toughest economic challenges: reforming its chronically dysfunctional tax-collection system.

The Trading Corporation of Pakistan (TCP) has nearly reached on the brink of bankruptcy due to end of credit limit from Ministry of Finance (MoF) while several government departments also owe billion of rupees to the national entity, the Daily Times reported. The sources in MoF said Thursday that credit line for TCP of Rs 110 billion has been utilised and tenders for soft commodities are also sitting in cold storage. He said the governments of four provinces, besides Azad Kashmir administration and departments of Northern Areas are also defaulters of TCP for more than Rs 33 billion.

Officials from Pakistan have held talks with the International Monetary Fund (IMF) to discuss its $11bn loan package in the wake of the devastating floods, the BBC reported. The IMF's regional director, Masood Ahmed, told the BBC the organisation wanted to find a way to help Pakistan "through this difficult phase". This could include lowering some fiscal targets or allowing Pakistan to apply for emergency natural disaster funding.

Pakistan is to ask the International Monetary Fund to ease restrictions on a $10bn loan it received in 2008 after concluding that the recent devastating floods had made the conditions attached to the lending programme impossible to meet, the Financial Times reported. Abdul Hafeez Shaikh, Pakistan’s finance minister, will travel to Washington next week to ask the IMF to restructure the current loan or consider new financing, according to Pakistani officials.

Pakistan’s National Accountability Bureau (NAB) is said to be under “immense pressure” not to pursue cases of wilful default of bank loans because some leaders of opposition parties and a number of Pakistan People’s Party (PPP) stalwarts were among defaulters, sources told Dawn on Sunday. They alleged that the NAB had put off a meeting scheduled for Wednesday to review default cases because of “government pressure”. Top NAB officials may meet later this week to decide how to deal with the cases of wilful default in the light of new government instructions.

Hellas Telecommunications II, parent of Greece's Wind Hellas, said it had begun talks to seek support from shareholder Weather Investments as it expects to run short of cash and is considering restructuring alternatives. Weather Investments is an Italian holding company majority-owned by Egyptian tycoon Naguib Sawiris, with mobile, fixed, Internet and international communication operations in Algeria, Bangladesh, Egypt, Greece, Italy, Pakistan and Tunisia.

Pakistan will seek an additional $4.5 billion loan from the International Monetary Fund in April to accelerate the pace of economic growth and shore-up foreign exchange reserves, Shaukat Tarin, the economic advisor to country's prime minister, said. The South Asian nation, which was on the brink of an economic collapse after the balance-of-payments deficit widened to a record level, received $3.1 billion from the IMF in November as the first tranche of its planned $7.6 billion rescue package, The Wall Street Journal reported.

The International Monetary Fund approved a $7.6 billion loan for Pakistan on Tuesday to prevent it from defaulting on its debt and to help stabilize its economy, The New York Times reported. The loan, under discussion for more than a month, at first met strong resistance from the Pakistani government, which sought money on more generous terms from other countries. But Pakistan’s major allies--the United States, China and Saudi Arabia--insisted that it accept the loan and the IMF conditions before they offered assistance.