 WASHINGTON: The International Monetary Fund and the World Bank have agreed to jointly provide more aid to flood-hit Pakistan during the current fiscal year but both also insisted that the country needed to continue its economic reforms, officials said on Thursday.
“In response to this (flood), I will ask the IMF Board to approve $450 million in emergency assistance to be made available this month,” said IMF Managing Director Dominique Strauss-Kahn.
“The World Bank is committed to helping the people of Pakistan during this time of need and has made $1 billion available to finance immediate recovery needs and longer-term reconstruction,” said the bank’s President Robert B. Zoellick while adding another $100 million to $900 million already committed.
The additional $100 million, announced after Mr Zoellick’s meeting with Finance Minister Hafeez Sheikh on Wednesday, will be made available during the current fiscal year.
The money will come from the bank’s fund for the poorest countries, the International Development Association, which means that the loans are concessional and carry no interest payments. This funding is already programmed money for Pakistan that is being diverted to meet immediate needs.
“We need to respond strongly to the crisis at hand, but we need to do it without losing sight of important economic reforms,” said Mr Zoellick while emphasising the need to continue the reforms Pakistan negotiated with the World Bank Group two years ago.
Mr Strauss-Kahn went a step ahead and indicated that Pakistan had already pledged to continue those reforms.
“Our dialogue with Pakistan on the current Standby Arrangement is progressing and the authorities have expressed their intention to implement measures for the completion of the fifth review of the programme later this year,” he said.
“We will stay in close contact as these efforts proceed. Completion of the fifth review will allow the Fund to disburse an additional $1.7 billion, bringing total IMF disbursements (including emergency assistance) to $2.2 billion in the second half of 2010,” Mr Strauss-Kahn said.
The finance minister told a joint briefing with the IMF chief at the Fund’s headquarters that “Pakistan remains committed to the reform efforts that will put public finances on a sustainable basis and lay the foundations for growth.”
Under a 2008 loan programme with the IMF, Pakistan pledged to implement tax and energy sector reforms, reduce inflation, curb budget deficit and give full autonomy to the State Bank.
“This disaster underscores Pakistan’s fiscal vulnerability and dependence on foreign aid. Renewed commitment to governance and fiscal reforms will be important to mobilise domestic revenues and ensure that funds reach the poor people it is intended for,” Mr Zoellick said.
He noted that “the response of donors to the floods will also depend on the government’s ability to deliver in this area.”
While announcing emergency funding on Thursday, the IMF also quoted its director for the Middle East and Central Asia Department, Masood Ahmed, as saying that given the disaster’s impact, some of the parameters of the existing loan arrangement may need to be changed. “The economic impact is going to be very significant,” Mr Ahmed said, noting in particular the floods’ devastating effect on agriculture. “The floods will lower growth and will affect the government’s budget because they will have to spend more and they’ll be able to raise less revenue. And Pakistan will have massive reconstruction costs down the road running into the billions of dollars.”
The IMF chief Mr Strauss-Kahn agreed, noting that the floods had already caused serious damage to the country’s infrastructure, severely impacted its economic outlook and resulted in a worsening of the fiscal situation.
“This natural disaster will have an important effect on the country’s economy,” he added.
A Pakistani delegation, led by the finance minister, held a series of meetings with IMF staff and management in Washington during the past week to discuss the disaster’s implications for the country’s budget and longer-term growth targets.
Discussions on Pakistan’s macroeconomic framework will continue in the coming weeks.
The IMF and Pakistan also agreed to hold the fifth review of an existing $11.3 billion loan arrangement in October.
Official sources said that the IMF had agreed not to attach new performance criteria or benchmarks to the loan programme initially negotiated in 2008. |
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Updated at: 07 February 2012
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| 3rd Test: England finish at 36-0 in 324-run chase against Pakistan  DUBAI: England, chasing a big 324-run target, closed the third day at 36-0 in the third and final Test against Pakistan at Dubai Stadium on Sunday.
Andrew Strauss (19) and Alastair Cook (15) were at the crease when the stumps were drawn. They need another 288 runs for a win with all ten wickets intact.
Pakistan, leading the series 2-0, made 365 in their second innings.
Scoreboard:
Pakistan 1st innings 99 (Asad Shafiq 45; S. Broad 4-36, J. Anderson 3-35)
England 1st innings 141 (A. Strauss ...
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Updated at: 07 February 2012
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| I’ve signed a British film: Veena Malik  ... claims Pakistani starlet Veena Malik, who is crossing over from Bollywood to international cinema
She is yet to make her Bollywood debut, but Pakistani starlet Veena Malik is already contemplating international cinema. The controversial actor informs BT that she has signed a British film, in which she has a powerful role. "I am getting many offers from across the globe. Recently, a UK film team was in Dubai and I was shortlisting a few offers that would suit me. I have zeroed in on a few ...
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| SC suspends membership of 28 MPs elected through by-polls  ISLAMABAD / LAHORE: The Supreme Court has suspended the membership of 28 parliamentarians who were elected to their seats in the National Assembly and Senate through by-polls held after the 18th amendment.
The order came on Monday as Chief Justice Iftikhar Muhammad Chaudhry resumed hearing of a ...
| | Pakistan will always remain relevant for Afghanistan's future: Gilani  ISLAMABAD: Prime Minister Yousaf Raza Gilani, talking to the media before heading for Qatar on Monday, said that Pakistan will always remain relevant in determining the future of Afghanistan.
Gilani headed to Qatar to discuss Afghan peace efforts in the ultra-rich Gulf state where the Taliban and ...
| | Kashmir – key milestone for Indo-Pak growth: Shankar  NEW DELHI: Indian Congressman and the former member of Indian parliament Mani Shankar described Kashmir issue being the biggest milestone to be surpassed if the two countries want serious progress on other sectors, reports SAMAA.
He said all the other longstanding issues would automatically come to ...
| | 50 trapped under debris after boiler explosion  LAHORE: At least 50 people were feared trapped under rubble of a three-storey building of a pharmaceutical company that collapsed due to a boiler explosion, Geo News reported.
Three houses alongside the building also razed to the ground.
According to the details, two dead bodies and five injured ...
| | SC deadline on 'by-polls legal cover' ends today  ISLAMABAD: Supreme Court of Pakistan’s deadline regarding legality of by-elections is ending today (Monday), Geo News reported.
According to details the fate of 28 parliamentarians hangs in balance as they would be rendered disqualified if government failed to have the 20th Constitutional amendment ...
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