Photo courtesy PID
The International Monetary Fund (IMF) on Thursday reiterated its support for flood-hit Pakistan during its time of need, as Finance Minister Ishaq Dar held his first formal meeting with the global lender after replacing Miftah Ismail.
“[IMF Mission Chief Nathan Porter] expressed the IMF’s support for Pakistan in this hour of need and in this context mentioned the meeting of the IMF managing director with Prime Minister Shehbaz Sharif [in New York],” read a statement issued by the Finance Ministry after a virtual meeting between Dar and Porter. It said the finance minister had briefed the IMF official on the economic situation caused by the devastating floods that left a third of Pakistan under water, including the impact on infrastructure, crops and the livelihoods of people.
It said that Dar had assured the global lender of Islamabad’s intent to take measures to reduce burden on the national economy while protecting vulnerable citizens, adding that he had also reaffirmed the government’s aim to address structural issues so that Pakistan is able to end its fiscal deficit and move toward sustainable growth.
Recalling the meeting between P.M. Sharif and IMF MD Kristalina Georgieva—during which she reportedly assured him of support in revising the conditions of an ongoing Extended Fund Facility—the finance minister said the government remained committed to undertaking reforms envisaged under the program.
Citing Porter, the Finance Division said he had congratulated Dar on assuming leadership of the Finance Ministry and shared the IMF’s assessment of the challenges facing Pakistan’s economy. “The IMF mission chief also discussed the support of international lenders for the country to mitigate the effects of flashfloods,” it said, adding that Dar had thanked Porter for the lender’s support at a difficult time for the global economy.
Under the conditions imposed on Pakistan by the IMF to revive a suspended bailout program, the government is required to further raise electricity and fuel prices—already touching record levels—over the next six months through taxes and the complete removal of all untargeted subsidies. Following this year’s floods, Islamabad has maintained its economic situation is “totally different” and urged the IMF to either reconsider the conditions or expedite the disbursal of the remaining $3 billion of the bailout program to help it rehabilitate the communities impacted.
According to local media, Porter asked the finance minister to provide specifics of any proposal seeking debt rescheduling from the Paris Club, to whom Pakistan owes $9.7 billion. However, he said the IMF was considering Pakistan’s request for relief during to help tackle the destruction caused by floods.
While the government has yet to complete a formal damages assessment, initial estimates suggest Pakistan suffered damages of nearly $30 billion.