News

DATE=1/15/99 TYPE=CORRESPONDENT REPORT NUMBER=2-244220 TITLE=PAK / I-M-F (L-ONLY) BYLINE=SCOTT ANGER DATELINE=ISLAMABAD CONTENT= VOICED AT: INTRO: THE INTERNATIONAL MONETARY FUND SAYS IT IS MOVING FORWARD WITH A MULTI-MILLION DOLLAR LOAN PACKAGE FOR PAKISTAN. AS V-O-A'S SCOTT ANGER REPORTS, THE RESUMPTION OF THE LOAN IS WELCOME NEWS, BUT IT MAY NOT PROVIDE ANY LONG-TERM SOLUTIONS TO THE COUNTRY'S ECONOMIC CRISIS. TEXT: AFTER MEETING IN WASHINGTON, THE I-M-F HAS AGREED TO RESTART A STALLED 1-POINT-5 BILLION DOLLAR LOAN PACKAGE FOR PAKISTAN. THE MONEY WAS FROZEN LAST MAY AFTER PAKISTAN CONDUCTED NUCLEAR TESTS IN RESPONSE TO INDIA'S ATOMIC EXPLOSIONS. THE INTERNATIONAL COMMUNITY IMPOSED ECONOMIC SANCTIONS ON BOTH COUNTRIES AS A RESULT. THE ANNOUNCEMENT HAS BEEN WELCOME NEWS IN PAKISTAN. OFFICIALS SAY THE LOAN WILL END THE FINANCIAL CRUNCH FACING THE GOVERNMENT. THEY NOW ANTICIPATE OTHER DONORS RELEASING MONEY TO HELP THE COUNTRY FILL ITS MULTI-BILLION DOLLAR FINANCING GAP. BUT CRITICS SAY THE PACKAGE WILL NOT PROVIDE A LONG-TERM SOLUTION FOR A COUNTRY IN NEED OF AN ECONOMIC OVERHAUL. PAKISTAN'S FORMER AMBASSADOR TO THE UNITED STATES, MALEEHA LODHI, SAYS I-M-F LOAN PACKAGES ARE NECESSARY, BUT THEY DO NOT SOLVE LINGERING ECONOMIC PROBLEMS. ///LODHI ACT/// SOMETIMES, GOVERNMENTS HAVE SEEN LOAN PACKAGES AS SUBSTITUTES FOR REBUILDING CONFIDENCE AND SUBSTITUTES FOR REFORM. IN WHICH CASE, THE BAILOUTS BECOME PART OF THE PROBLEM AND NOT PART OF THE SOLUTION. ///END ACT/// PAKISTAN HOPES THE I-M-F AGREEMENT PAVES THE WAY FOR RESTRUCTURING OF A 32-BILLION DOLLAR FOREIGN DEBT. UNTIL NOW, IT HAS BEEN USING GRACE PERIODS TO DELAY PAYMENTS. NEXT WEEK, THE WORLD BANK WILL CONSIDER A 350-MILLION DOLLAR ADJUSTMENT LOAN FOR PAKISTAN TO USE IN AREAS OF BANKING AND PUBLIC UTILITIES. THE MONEY WOULD ALSO BE USED TO HELP REFORM THE GOVERNMENT'S TAX ADMINISTRATION. (SIGNED) NEB/SA/GE 15-Jan-99 8:29 AM EST (1329 UTC) NNNN Source: Voice of America .