Pakistan Hopes for IMF ‘Lifeline’ as Donors Pledge Generous Sums

Date:

GENEVA — Pakistan Prime Minister Shehbaz Sharif on Monday ask­ed the International Monet­ary Fund (IMF) for a pause in its demands for economic reforms before releasing more financial aid, as the country tries to reb­uild after catastrophic floods.

The call came as the country received over $10 billion in pledges at a donors’ conference, hosted jointly by the government of Pakistan and the United Nations.

PM Shehbaz told the conference his country was “racing against time” to deal with towering needs.

“I am asking for a sustained international support plan. I am asking for a new lifeline,” he said.

He added the flooding immediately affected 33m people, destroyed more than 2m homes and damaged over 8,000km of roads and 3,100km of railway track.

“This is the greatest climate disaster in our country’s history,” agreed Foreign Minister Bilawal Bhutto-Zardari, decrying the “colossal calamity.”

Federal Planning Minister Ahsan Iqbal said the Post-Damage Needs Assessment — conducted jointly by the Government of Pakistan, World Bank, ADB, the EU and UN relief agencies — has estimated the aggregate cost of the calamity at $30.1bn, APP reported.

‘Breathing space’

Speaking to reporters on Monday, PM Shehbaz said he was trying to persuade the Fund to give Islamabad some breathing space as it tackles the “nightmarish” situation.

The global lender wants Pakistan to withdraw remaining subsidies on petroleum products and electricity, aimed at helping the masses.

“Even before these floods hit Pakistan, we were already facing humongous challenges,” he said.

“Yet we had to again connect with the IMF and resurrect an agreement which was violated by the previous government — and accept even harsher conditionalities,” said Sharif.

He said Pakistan was complying with the IMF’s conditions “as best as possible” but asked “how on earth” the additional burdens could be shouldered by the country’s poorest.

“Yet, we are committed to IMF’s programme. We will do everything to comply with the terms and conditions. Though I am constantly trying to persuade them: please give us a pause,” he said.

PM Shehbaz also spoke with IMF Managing Director Kristalina Georgieva on Saturday and asked her to “kindly be considerate and compassionate and give us some breathing space”.

“This is an ongoing dialogue. I’m sure one day soon we will be able to convince them thro­u­gh logic and through facts. That said, regardless, we will comply with the IMF programme.”

Later, Finance Minister Ishaq Dar also met with World Bank Vice President Martin Raiser on the sidelines of the conference.

He appreciated the financial and technical support exte­n­ded by the World Bank to cope with the challenge posed by the floods, the Ministry of Finance said in a tweet.

On Monday, Mr Dar also met with IMF Mission Chief to Pakistan Nathan Porter, ISDB President Muhammad Al-Jasser, and USAID, Deputy Administrator Isobel Coleman.

UN chief’s impassioned appeal

“No country deserves to end­ure what happened to Pak­istan,” UN Secretary General Antonio Guterres told an int­e­r­national conference in Gen­eva, which is seeking billions of dollars to support recovery from the disaster.

Mr Guterres said Pakistan and its people responded to “this epic tragedy with heroic humanity”.

“We must match the heroic response of the people of Pakistan with our own efforts and massive investments to strengthen their communities for the future,” he told the conference.

The UN chief said Pakistan’s “monsoon on steroids” proved the need for the agreement reached at the climate summit (COP27) in November to create a “loss and damage” fund, which is aimed at covering the climate-related destruction endured by developing nations less responsible for global warming than wealthy polluters.

“If there is any doubt about loss and damage, go to Pakistan,” he said. “There is loss. There is damage.”

Ahead of the conference, Achim Steiner, head of the UN development agency, told AFP that Pakistan would face “extraordinary amounts of misery” if the world did not step up and help.

Donors pledge

Meanwhile, Pakistan said on Monday that donors had committed to give more than $8 billion to help it recover from last year’s devastating floods in what is seen as a major test for who pays for climate disasters.

Officials from some 40 countries as well as private donors and international financial institutions are gathering for a meeting in Geneva as Islamabad seeks help covering around half of a total recovery bill of $16.3 billion.

Waters are still receding from the floods caused by monsoon rains and melting glaciers which killed at least 1,700 people and displaced around 8 million.

Pakistan Information Minister Marriyum Aurangzeb sent a tweet saying that pledges had reached $8.57 billion – more than it had initially sought.

Among the donors were the Islamic Development Bank ($4.2 bn), the World Bank ($2 bn), the Asian Development Bank ($1.5 bn) as well as the European Union and China, she said.

France and the United States also made contributions.

Earlier, United Nations Secretary General Antonio Guterres called for massive investments to help Pakistan recover from what he called a “climate disaster of monumental scale”.

“Pakistan is doubly victimized by climate chaos and a morally bankrupt global financial system,” he added. He later elaborated saying the current system was “biased” towards the rich countries who conceived it.

Additional funding is crucial to Pakistan amid growing concerns about its ability to pay for imports such as energy and food and to meet sovereign debt obligations abroad.

Pakistan’s finance minister is meeting an International Monetary Fund delegation on the sidelines of the Geneva meeting.

Prime Minister Shehbaz Sharif said the country was committed to the IMF programme but that he was asking the IMF for “breathing space” to meet its commitments, without elaborating.

In comments to the conference earlier on Monday, Sharif said Islamabad was willing to provide around half of the $16.3 billion bill but wanted donors to contribute the rest.

“I am asking for a new lifeline for people who need to power our economy and re-enter the 21st century with a future that is protected from such extreme risks to human security,” he said.

Millions of homes, tens of thousands of schools as well as thousands of kilometres of roads and railways still need to be rebuilt, the UN says.

Efforts to secure funding for the initial emergency phase of the disaster response were disappointing with a humanitarian aid package of $816 million less than half funded , UN data showed.

United Nations’ Development Programme Administrator Achim Steiner said the next phase of the Pakistan response represented a “monumental moment of reckoning for the entire world”. — Agencies

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Photo: A flood-affected family is seen at a makeshift tent on the outskirts of Hyderabad, Pakistan, on Oct. 3, 2022. — Xinhua/IANS

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