ISLAMABAD - A Pakistani delegation has flown to Abu Dhabi to negotiate with International Monetary Fund, which would review the health of Pak economy and the outcome would determine the fate of $3 to 4 billion aid from the multilateral donors. Pakistan is scheduled to hold very crucial negotiations with the IMF during the next four days and the outcome of these talks would resolve whether the country would be in queue like 16 other world nations for the IMF Programme or get assistance from other multilateral lenders. The meeting venue has been shifted to Dubai due to the United Nations advisory, which prohibits the delegates to visit Islamabad because of deep security concerns. A Letter of Comfort by the IMF would secure $ 1.4 billion from the World Bank and an early release of up to $1b from the Asian Development Bank, which otherwise would be disbursed in the third and fourth quarters of the current fiscal year 2009, said the Finance Ministry sources. They said this amount included $500m under Accelerating Economic Transformation Programme and about US $ 500 million under Capital Market Reforms Programme. The IMF assesses short-term Pakistan needs at $4.5b and Pakistan makes it at $3.5b. An affirmative report from the Fund would not only send positive signals to the market but also avoid default on Sukuk bond of $500m due in February 2009. Pakistan's current account deficit in the first quarter has widened to $ 3.9b and the foreign exchange reserves can only support 6 weeks imports at a time when people prefer dollars to local currency. These parleys would be held under Article-IV of the Fund, a technical paper that states performance of the economy "according to the IMF view". Secretary Finance, Dr Waqar Masood would lead the team. However, he would depart today (Tuesday). A country normally can get aid up to its share in the IMF budget. However, in special circumstances, when the applicant is facing serious problems of balance of payments, the IMF can provide the assistance much more than the quota. Pakistan's share of the IMF budget is SDR 1,033.7 million. Pakistan is fast running out of options and is in need of foreign assistance during the next one and a half months. Any delay in the foreign aid would land Pakistan into the Fund lap, which is always ready to help on its own conditions, normally hitting hard the poor. After the IFIs, Pakistan is attaching great hopes from Friends of Pakistan meeting, being held in mid-November in Abu Dhabi. The IMF provides three types of assistance, surveillance, technical assistance and financial assistance. In technical assistance, the Fund advises on macroeconomic indicators. It assists in framing tax structure, revenue administration, monetary policy and exchange rate system. The IMF loans are provided under an "arrangement", stipulating specific policies and measures a country agrees to take on. The loan is released in phased instalments as the committed programme is carried out. Former Finance Minister, Sartaj Aziz who has experience in dealing with the Fund, says the IMF Programme emphasizes on economic stabilization, which leads to slow growth and ultimately unemployment. He says the Fund stresses on increase in interest rate, reduce expenditures, generate more revenue, and depreciate rupee, which according to him is a "classical model" and is rejected by contemporary economists. The contemporaries prefer accelerating economic growth to the Fund traditional model. The experts see certain other problems with the Fund Programme. They say the Fund usually offers same recipe for all types of problems in all countries because the staff that gives a set of recommendations does not know the exact nature of the needs of a country. Our Monitoring Desk adds: Pakistani officials are due to meet representatives from the IMF in Dubai on Tuesday (today) amid growing speculation that the country may formally ask for a balance of payments support programme, reports The US Daily. The CNBC news channel has reported that the seven-month-old civilian government would ask the IMF for $10 billion, though officials were unavailable or declined to comment on the report. "An IMF mission will be meeting with Pakistani authorities' officials starting tomorrow, Tuesday," said Niels Buenemann, the IMF's senior press officer, on Monday. Pakistan may need as much as $10b from donors over the next two years to avoid defaulting on its debts, the International Monetary Fund said, according to Bloomberg TV. Pakistan calculated "they needed financing somewhere in the region of $3b to $4b," IMF Regional Director Mohsin Khan said in an interview in Dubai. "We thought that it was closer to $5b; $5b this year and $5b next year." Pakistan may seek an IMF loan for the first time in four years to prevent the nation defaulting on its debt. "The most difficult measures that the government has had to take have been the elimination of subsidies and the commitment to zero net borrowing from the central bank,'' said Mohsin. "My guess would be that the other conditions that would be attached to any loan would be relatively minor compared to these." AFP adds: Adviser to PM on Finance Shaukat Tarin said Pakistan would not ask the IMF for the four billion dollars it requires to head off a balance of payments crisis. "It is a formal meeting which is mandatory for every signatory to hold with the IMF every six months," Shaukat told AFP on Monday. "We'll inform them about the present economic conditions of the country." Tarin said Pakistan needed three to four billion dollars to meet its needs. "The IMF is certainly one of the options we have, but we are not going to ask them for the money in Tuesday's meeting," he said. "It is a back-up plan that we'll opt for if and when it is needed." Talking to PTV, Tarin said the government has adopted strict measures to put the national economy on right track. "Action plan would help bring in $3 to 5 billion in the foreign reserves within 30 to 45 days," he optimistically said. He said problems of fiscal deficit and imbalance in payments will be addressed within 24 months as "you have to stand on your own feet. You have to build your reserves." The advisor said the country needs to create "revenue streams" in the long run to mitigate financial problems and improve living standard of the common man. In reply to a question about seeking financial assistance from International Monetary Fund, Shaukat Tarin said if the government contacted IMF, the assistance will be match Pakistan's own requirements. The government has abolished subsidies and is making efforts to overcome fiscal deficit. Besides, it will ensure zero percent borrowing from the State Bank of Pakistan at the end of every quarter, he added. Primarily, IMF stresses on the same steps, which the country is already taking, for good governance while issuing financial assistance to any country. If the government sought assistance from IMF, it will be cheaper and sufficient to steer the country out of economic crisis, the advisor observed.