ISLAMABAD (August 13 2008): The United States of America (USA) has turned down Pakistan's request for budgetary and balance of payments support, sources in the government told Business Recorder. The budget for fiscal year 2008-09 has envisaged a deficit of 4.7 percent, which is unlikely to be met as the Finance Minister had remained vague about revenue sources identified in the budget.At the same time, expenditure in general and subsidies in particular are unlikely to be curtailed, given the increase in the number of those living below poverty line due to rising inflationary pressures. Balance of payments position is also unlikely to improve if oil prices remain high in the international market. Therefore, any increase in exports, forecast at 15 percent for 2008-09 in the trade policy announced by Ahmed Mukhtar, is not expected to provide the necessary cushion to absorb the rise in the import bill.
Given the two deficits ie budget and trade deficit, the request by Pakistan government to the US team to extend assistance for budgetary support reflected its deep concerns over impending economic crisis. Sources said that Pakistan's request for further financial assistance had been placed before the US team, which was present in the Finance Ministry on Monday, for the third US-Pakistan economic dialogue, but the response was not encouraging.
"Pakistan's economy is in a serious condition, and the government has not prepared any contingency plan," sources quoted the leader of the US team, Assistant Secretary of State for Economic, Energy and Business Affairs, Daniel S Sullivan, as commenting.
The US team was also of the view that Pakistan is not aggressively seeking foreign and local investors, who are nervous due to the current state of political and economic affairs, sources said. "It was a very disappointing round of talks between the US and Pakistan as nothing was achieved in real terms," they added.
| Oh, I dunno - sounds like a message was conveyed. |