IMF might provide emergency financing

ISLAMABAD: The International Monetary Fund (IMF) has said that there is a possibility of providing emergency financing to Pakistan.

The fund is dedicated towards rebuilding in the wake of natural disasters and has been used in the past for countries which faced such disasters.

However, all options will be considered during talks with Pakistan authorities.

The IMF is committed to standing by Pakistan in this time of need, said Gerry Rice, Deputy Director of the IMF’s External Relations Department, while briefing newsmen in Washington.

He said that the IMF is holding a series of technical meetings with Pakistani delegations and has focused on getting a better sense of the impact of the floods on the economy.

He explained that these tragic floods will have a major impact on the country’s economy and the scale of the impact means that the country’s budget and macroeconomic prospects will need to be reviewed.

However, he reassured the media saying that the IMF is working with its Pakistani counterparts to assist them in designing measures to overcome these challenges whilst keeping the Pakistani economy on the path for sustainable growth.

Rice said that the IMF is already supporting the Pakistani economy via the standby arrangement, adding that discussions with the Pakistani delegation regarding the emergency relief fund are ongoing and active.

The IMF will be working with representatives from Pakistan as well as with representatives from the Asian Development Bank and the World Bank in efforts to get an assessment of damages caused by floods. However, the IMF will not wait till all details are finalised before it starts looking at some of the possible relief options.

He also said that a damage assessment being prepared with the World Bank and ADB (Asian Development Bank) will be finalised around October.

Finally, the IMF deputy director refused to comment on a question regarding debt relief for Pakistan and said that most of Pakistan’s debt is towards official and multilateral creditors.

These are the very same institutions that will be providing financing for rebuilding the Pakistani economy and the IMF thinks it would be helpful if bilateral donors provided grant assistance for the reconstruction of the economy.

Published in The Express Tribune, August 29^th, 2010.