ISLAMABAD - The government has appointed Shaukat Tareen as Advisor to Prime Minister on Finance, Revenue and Economic Affairs, giving him a task to recover the sinking economy and take the country out of a looming threat of default on sovereign bonds.   Finance Ministry sources told TheNation that Shaukat Tareen, a renowned banker, after taking the driving seat in place of Syed Naveed Qamar would proceed today (Wednesday) to Washington to attend the annual meetings of the World Bank and International Monetary Fund. He will be the third head of the Ministry of Finance in six months. The PPP-led government first appointed Senator Ishaq Dar of PML-N as Finance Minister and after walking out of his party from the Cabinet, Syed Naveed Qamar took the charge. Shaukat Tareen also held an important meeting with Prime Minister Syed Yousuf Raza Gilani on Tuesday. A few months back the government constituted Economic Advisory Council aimed at counselling the Premier on economic matters and appointed Mr Tareen as its Convener.  He was also serving as Chief Executive of Saudi-Pak Commercial Bank. "He is tough task master, excellent team leader and has the ability to turn around the worsening economy", said former Minister of State for Finance, Omar Ayub who also worked under the newly appointed Advisor in 1990s in the Citi Bank. He said the govt had chosen the correct person to do the job.    However, it is yet to be seen how Shaukat Tareen would tackle the economic challenges at this important juncture in the history of the country when the success of economic policies to a large extent depended on security situation. The immediate challenge that the Advisor is going to face is to arrange US $ 3 to 4 billion on an upfront basis to ease the pressure on external front and protect Pakistan sovereign bonds from going to default, which have become the most riskiest in terms of investment for the investors. The Sukuk bond worth US $ 500 million is going to be matured in February 2009. Foreign Exchange Reserves have eroded by more than half in just 11 months. In October last, the country's total foreign currency reserves stood at US $ 16.4 billion, which have come down to US $ 8.1 billion by last week. The central bank is only left with US $ 4.7 billion, which are not enough to finance even two months' import bill. All this is putting extra pressure on Pak rupee which is fast losing its value against the American dollar and on Tuesday traded at the historical high of Rs 79.40 = 1 US dollar. This has led to downgrade of Pakistan credit rating by the international agencies. The Standard and Poor's has given CCC+ rating to Pakistan, which meant substantial risk in investing in Pak bonds.    Budget deficit is another major challenge for the Advisor. The gap between the government income and expenditure is ever widening, compelling the Finance Ministry to borrow money from the central bank, which is inflationary in nature.  The government is finding hard to arrange money from capital market that has yet to take roots in Pakistan. During the first 11 weeks of the fiscal year 2009, the government  borrowed Rs 173 billion from the State Bank of Pakistan despite its policy of net zero borrowing from the central bank. Inflation was soaring at the rate of 25 per cent during the first two months of the fiscal year 2009. The international development partners are forecasting year-end inflation at 20 per cent and economic growth at 4.5 per cent. Though the economic managers have been announcing various measures including Economic Stabilization Package, yet so far they could not bring a change in the gloomy scenario.