WASHINGTON, July 13: Emergency meetings are underway at the International Monetary Fund (IMF) to discuss the grave economic situation in Pakistan amid reports that Islamabad might declare a moratorium on all debt repayments by Tuesday morning.IMF's Middle East Director Paul Chabrier, who was in Pakistan last week for discussions, is slated to brief the executives directors of the G-7 countries and the IMF board on Monday about Islamabad's parlous position, even as the Pakistani economy is said to be going down the tubes. Several western countries led by the United States are working on a bailout to arrest the collapse.Chabrier is expected to inform the executives directors of the G-7 countries that a major financial crisis will occur in Pakistan if the ESAF/EFF programme is not activated quickly. Under the programme, now on hold following Pakistan's retaliatory nuclear tests in May, Islamabad needs around $ 200 million immediately to ease its problems, out of an overall loan of $ 1.6 billion.Chabrierindicated in Islamabad that he will press for the release of the money, since the IMF was fully satisfied with the economic reforms carried out by Pakistan in line with the conditionalities and obligations. But panic buttons are already being pushed in Pakistan, although financial experts say some of it is aimed at forcing the G-8 countries to act quickly."If the G-7 countries do not resume the loan facility, Pakistan will declare moratorium on all debt repayments by Tuesday morning," Nation quoted unnamed sources as saying on Monday, adding that the government had reached this decision after a lengthy process of discussions on the subject.Pakistan believes it will be railroaded into signing the Comprehensive Test Ban Treaty (CTBT) in return for an economic bailout and reports about declaring a moratorium appear to be linked to that fear.Nation said Pakistan expects an unfavourable decision in retaliation (for not signing CTBT) from the IMF Board of Directors that meets in Washington onMonday. "Pakistan has linked the crucial decision (to declare a moratorium) to the outcome of the meeting of G-7 members of the IMF Board of Directors and they have been conveyed the message," the paper quoted sources as saying.Pakistan maintains that it will not sign the CTBT unless the international community guarantees the peaceful resolution of the core issue of Kashmir. The US has been pressing Islamabad not to link Kashmir to CTBT. Meanwhile, the Pakistani rupee is in a virtual free fall, being quoted at 65 rupees for a dollar in the open market.The official rates for spot buying and selling of dollar is 46.00 and 46.46 rupees. The rupee went down by more than ten per cent in the market last Thursday after the State Bank of Pakistan announced discontinuation of quota of foreign currency for overseas travelers and students studying abroad.Foreign remittances into Pakistan by its expatriates, from the Middle East, the UK and the US, has virtually dried up."I have not sent any money home afterthe tests. Things are very uncertain and I don't want to take a risk," Nadeem Siddique, a gas station attendant in Baltimore said. Students have had their journeys frozen and spouses have been stopped from joining their dear ones abroad because of the financial emergency.So dangerous is the situation in Pakistan that finance minister Sartaj Aziz, accompanied by Prime Minister Nawaz Sharif's brother and Punjab Chief Minister Shahbaz Sharif along with several senior officials, have left for the United Arab Emirates (UAE) and Saudi Arabia, presumably to appeal for a bail out.Sharif was quoted as telling the Pakistan media that he is carrying letters from the Prime Minister for King Fahd of Saudi Arabia and UAE President Sheikh Zayed bin Sultan Al-Nayhan. The team is traveling in a special plane and is expected to visit some other countries too.
