IMF and Pakistani officials began talks on Monday to discuss the terms of Pakistan's 11-billion-dollar loan. IMF chief Dominique Strauss-Kahn (pictured) has said the organisation would do its part to help the flood-wrecked country.
AFP - Officials from the IMF and Pakistan held talks Monday amid reports that the flood-battered country was asking the fund to ease terms of a nearly 11-billion-dollar loan.
"I can confirm the meeting," one official said but declined to elaborate on the specifics of the discussions at the Washington-based International Monetary Fund headquarters.
But Masood Ahmed, director of the IMF's Middle East and Central Asia department, said Pakistan's budget and macroeconomic prospects, being supported by an IMF financed program, would have to be reviewed due to the deadly floods.
The nearly month-long floods have killed 1,500 people and affected up to 20 million nationwide in the country's worst natural disaster, with the threat of disease ever-present in the miserable camps sheltering penniless survivors.
There are fears that losses could snowball to 43 billion dollars.
Pakistan floods in pictures
A young flood survivor carries a child as he evacuates the flooded area in Tando Hafiz Shah, in southern Pakistan's Sindh province. (Photo: AFP)
A man sits next to a truck surrounded by water in the flood-affected village of Visandawali, some 30 kms south of Muzaffargarh, in Punjab province. (Photo: AFP)
A family wades through water in the flood-wrecked village of Visandawali. (Photo: AFP)
An elderly woman cradles an infant as flood-affected Pakistanis return home to Bassera village in Punjab province. (Photo: AFP)
Flood-displaced Pakistanis receive food at a distribution point in Sukkur, Sindh province. (Photo: AFP)
Flood survivors at a camp in Sukkur on August 17. (Photo: AFP)
A farmer moves his animals to high ground in the flooded area of Pathan Wala. (Photo: AFP)
A flood survivor receives a bottle of water from a van in the village of Bassera, Punjab province. (Photo: AFP)
Flood survivors evacuate a flooded area of Pathan Wala on August 16, 2010. (Photo: AFP)
A father carries his child through the flooding in southern Pakistan. (Photo: AFP)
Millions of Pakistanis have been displaced by the devastating floods. (Photo: AFP)
Flood victims cross a damaged bridge in the Kasbag Gujarat region. (Photo: AFP)
The cost of rebuilding Pakistan will run into many billions of dollars. Aid organisations have expressed concern that funds will prove insufficient, urging donor countries to do more to help the flood-stricken country. (Photo: AFP)
The IMF meeting with the Pakistan officials would "evaluate the macroeconomic impact of the floods, assess the measures they are taking to address this impact, and discuss ways in which the IMF can assist Pakistan at this difficult juncture," Ahmed said at the weekend.
Pakistan's finance minister Abdul Hafeez Shaikh will ask the IMF to restructure the current loan or consider new financing, Pakistan officials said last week.
"Either the fund steps forward and allows plenty of relaxations on the current program or we make a fresh start and discuss a new program with performance criteria that are tailored to our new economic realities," one official told the Financial Times.
"The present program is not looking sustainable."
Even before the floods there had been speculation that Pakistan might seek a new loan agreement with the IMF.
But in light of the natural disaster, Islamabad now fears it will not be able to meet key IMF-set targets on inflation and budget deficit levels.
IMF Managing Director Dominique Strauss-Kahn wrote to Pakistani President Asif Ali Zardari at the outset of the disaster that "the IMF stood with Pakistan at this difficult time and will do its part to help the country."
The IMF in 2008 approved a 7.61-billion-dollar rescue package for Pakistan as the country struggled to cope with bloody attacks by Islamic radicals, 30-year-high inflation and fast-depleting reserves.
It was augmented to 10.66 billion dollars last year under the program that was extended to end in 2010.
So far, Pakistan has received about 7.27 billion dollars from the IMF loan.
Date created : 2010-08-23