German Foreign Minister Steinmeier called on the world to do more to help prevent looming economic collapse in Pakistan, a key ally in the international fight against terrorism.
Steinmeier with Pakistani President Asif Ali Zardari
"We believe that the international community has to do what it can, what is required of it, and that is to express its readiness to stand at the side of Pakistan," German Foreign Minister Frank-Walter Steinmeier said Tuesday, Oct. 28, at a joint press briefing with his Pakistani counterpart Shah Mahmood Qureshi in Islamabad.
Pakistan is facing a balance-of-payments crisis and has just a few weeks to raise billions of dollars in foreign loans needed to meet debt payments and pay for imports.
Steinmeier said an agreement on help for Pakistan was needed within days.
"I hope the decision will be made soon," Steinmeier said. "It won't help to have it in six months, or six weeks. Rather, we need it in the coming six days."
Steinmeier will be travelling to Saudi Arabia and the United Arab Emirates later this week.
Looming economic meltdown
Pakistan's looming economic meltdown has roots in the political crisis that ended with former President Pervez Musharraf's resignation in August, and dozens of suicide attacks by Taliban militants around the country that have caused foreign investors to flee.
New Pakistani President Asif Ali Zardari faces major challenges
Islamabad's seven-month-old government has been reluctant to go to the IMF and has been looking for help from friendly governments. But little assistance has materialized.
Steinmeier said Germany would be willing to help Pakistan negotiate a deal with the IMF.
"We will support your country in the negotiations with the IMF," he said.
Pakistan's foreign reserves dropped some 75 percent over the last 12 months from $18 billion to around $4.3 billion. At the same time, the rupee has weakened by more than 27 percent against the dollar, the current-account deficit reached a record $14 billion in the year ending June 30, and inflation has risen to over 30 percent.
Prolonged power outages and skyrocketing electricity tariffs have already triggered countrywide protests in recent weeks, raising fears that the nuclear-armed Muslim nation might fall into chaos, and further complicate the ongoing fight against the Islamic insurgency in Afghanistan.
Islamabad has appealed to the Friends of Pakistan group, which held its first formal meeting during the recent UN General Assembly session in New York, for urgent assistance.
The group, which includes members of the European Union, the United States and China, plans to hold another meeting next month in Abu Dhabi to discuss how to provide financial help to Pakistan to prevent further destabilization.
Germany in for the long haul
Steinmeier said Germany had identified several areas of cooperation, focusing on increased German investment and support in the education sector.
"We are both of this opinion that the Pakistan-German relations need a comprehensive upgrade in all fields -- politics, economy, military and culture," Qureshi said.
German soliders in Afghanistan have increasingly come under attack recently
Earlier, in an interview with Pakistan daily The News, Steinmeier said in the short-term, Germany "would like to help solve" issues like extremist threats and the financial situation. In the long-term, Berlin wants to contribute to strengthening the rule of law, human rights and civil society, he added.
On Afghanistan, where Germany is planning to increase its troop numbers to 4,500, Steinmeier said Afghan-Pakistan cooperation was key to resolving the conflict.
"You will not stop al-Qaeda by drilling a well, but you might help reduce militant opposition if you provide job prospects to the young and uneducated in the border region," he said.