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Pakistan's request for $1 billion write-off on track: US under-secretary

ISLAMABAD (November 07 2002) : Alan P Larson, the US under-secretary of State for Economic and Agriculture Affairs, said that Pakistan's request to the US for the $1 billion debt write-off was on track.

“The debt write-off of about a billion dollars for Pakistan is on track. The state of play-on it is that we need legislation to pass the Congress,” he said in a press conference here on Wednesday.

“That legislation is related to the budget that was not completed before Congress went into recess and the congressmen and congresswomen campaigned for the election,” he said.

He said the Congress has to come back after the election to resume work on the budget, and part of that will be to implement the law that we need to move ahead with the debt cancellation.

“I have assured the government that this is on track. There's no difficulty of any kind. It's just that we have to wait for the Congress to get back in session and for them to complete their work on the budget,” he said.

His press conference was held after a short visit to Pakistan where he met President Pervez Musharraf, finance minister Shaukat Aziz and other officials. He was also in Kabul for a day and a half, and from Islamabad he was to go on to India.

He said the basic focus of discussions in Islamabad was to consider how to build the trade and investment relationship. There has been a lot of accomplishment over the last three years to stabilise the economy, and Pakistan has escaped some of the turbulence that has affected some countries in other parts of the world, he said.

He said there was an opportunity to have the economy grow faster and make greater progress in alleviating poverty. Trade and investment can be very powerful tools for accomplishing the goal, he added.

Larson said the US supported the elections and was for the democratic process. He said in conversations with representatives of many of the political parties he found there was a shared interest in moving forward with an agenda on the economy that will promote growth and alleviate poverty.

About Pakistan's relations with the IMF he said no one was constrained to work with the IMF but a number of governments find that there is no way to alleviate poverty over time other than to have a sound financial strategy and reasonable budget stability, and that the IMF can help, both technically and financially,

He said Pakistan lived in a global economy and it was positive that Pakistan had been able to have growth rates that have accelerated over the last three years. H said he believed that this provided a good platform.

He said the most promising way for Pakistan to grow as an economy and to help all of its people participate in that growth and in that prosperity is to work with the World Bank and the Asian Development Bank and other bi-lateral donors, who share those same goals.

On the question of Financial Action Task Force he said its primary mission has been to combat money laundering or the practice of taking money that comes from criminal pursuits. The work of the Financial Action Task Force has expanded in the last year to include some activities designed to prevent the financing of terrorism, he added.

When asked about future aid to Pakistan he said he had a chance to talk with the government about the US continuing commitment to work with the government in many dimensions, including assistance.

He said the two sides were moving forward with fiscal year 2003 budget, and discussed with the government the details of that.

He said the US was formulating its budget for 2004, which under the US system begins October first of 2003.

He said the US saw its co-operation and partnership with Pakistan as a long-term, durable relationship. “We want to be a long-term, reliable partner; we want Pakistan to be a long-term, reliable partner of ours.”

He said: “We have been a champion of Pakistan in the international financial institutions, as well as in the Paris Club that handles debt issues. We have been strong advocates and supporters of what Pakistan has been doing. In our bilateral assistance relationship, we have been making a very, very major effort in 2002 and 2003, and, as I said, we are in the process of making plans for the 2004 effort. What we do with the resources that we are able to provide is something that is worked out in co-operation with the government.”

On the question of Pakistan, Turkmenistan and Afghanistan gas pipeline he said: “The pipeline project is a subject that I don't consider myself to be an expert on. I've heard a lot of interest in it, both in Afghanistan and here. I think that there is an obvious attraction to finding alternative ways of having Caspian energy resources to be able to get out to market, and the idea of having Turkmen gas, for example, go out through Pakistan to India is an idea that needs to be explored. I think there are some real opportunities here.

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