Dar greenlights plan to raise $2bn from overseas Pakistanis

SWIT volunteers to raise $2m interest-free loan to help sail country out of financial crisis

KARACHI:

Finance Minister Ishaq Dar on Thursday gave the go-ahead for raising $2 billion from overseas Pakistanis to help the country navigate the current economic quagmire. 

Speaking at a conference titled 'Defining a roadmap for Islamization of Pakistan's economy', Saylani Welfare International Trust Chairman Bashir Farooqi sought the finance minister's approval for voluntarily raising $2 billion from overseas Pakistanis using the charity's global welfare network.

Dar, who was available via video conference link, issued directives to the State Bank of Pakistan (SBP) to document the raise of the proposed debt.

"The transaction should be transparent, well documented and there should be a well-defined method to raise the debt," said the finance czar. Farooqi said the debt will be raised for five years and it will be interest-free and the funds will be handed over to the government by the trust. 

"The government may use it to clear import goods stuck at Karachi port due to the low availability of foreign exchange reserves at present", added the trust's chairman.

Pakistan's full-blown economic turmoil, from its biggest-ever currency devaluation to a rash of emergency spending cuts, offers the clearest sign yet that the nuclear-armed nation faces the risk of default unless it receives massive support.

Pushed to the brink by last year's devastating floods, the country has reserves of just $3.7 billion remaining, or barely enough for three weeks of essential imports, while hotly contested elections are due by November.

Read 'Confident' Pakistan will meet IMF requirements: mission chief

It desperately needs the International Monetary Fund to release an overdue tranche of $1.1 billion, leaving $1.4 billion remaining in a stalled bailout programme set to end in June.

Although an emergency IMF mission has arrived in Pakistan, there are no guarantees amid a growing number of headaches after November's suspension of disbursements from the current package, which was topped up to $7 billion after the floods.

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A devaluation of 15% in the rupee and a rise last week in fuel prices could help eliminate some key snags, particularly as tax measures are apparently imminent.

Yet pressure is building as the bailout programme cannot be extended beyond June and the elections loom.