IMF Bailing Out Pakistan at $7.6B Price Tag

Bailing out the economically ill Pakistan is not only an effort to stave off poverty and unemployment, but takes on special significance when you consider how extremism can flourish in economic instability. (And since the ouster of Musharraf, extremism already has the advantage of political shakiness in Asif Ali Zardari's government.) More details on the deal from Dawn:

"The 23-month stand-by arrangement is subject to the approval by the IMF Executive Board, which is expected to meet next week to discuss the programme, under the Fund’s emergency financing mechanism.

The IMF said the proposed loan amounted to some 500 per cent of Pakistan’s quota in the Fund.

The conditions attached to the programme will give greater oversight rights to the IMF, which will designate a set of experts for this purpose. Pakistan will also be required to reduce its expenditure, although the IMF had promised that the required cuts will not affect development projects.

Although an IMF package is not seen as very attractive, it will restore confidence of other donors in Pakistan’s ailing economy and may open doors to bilateral assistance from friendly nations and other financial institutions."

Dominique Strauss-Kahn, managing director of the International Monetary Fund, said in a statement that the package was crucial "to restore the confidence of domestic and external investors by addressing macroeconomic imbalances through a tightening of fiscal and monetary policies; and to protect the poor and preserve social stability through a well-targeted and adequately funded social safety net."