Pakistan vows IMF reforms as flood damage estimated at over US$16 billion
WASHINGTON: Pakistan’s finance minister has promised international lenders to stay true to economic reforms despite a new estimate that his country quickly needs more than US$16 billion to recover from devastating floods.
Finance Minister Ishaq Dar also said that a flood donors’ conference promised by French President Emmanuel Macron would take place next month which he hoped would help Pakistan both with immediate and longer-term needs.
The International Monetary Fund in late August released US$1.1 billion to Pakistan as part of a US$6 billion package sealed in 2019 as the new government of Prime Minister Shehbaz Sharif moved forward on reforms.
“It will be our endeavor, even at the cost of extra effort, that we should complete the program successfully,” Dar told AFP in an interview on Friday (Oct 14) evening in Washington.
Doing so “sends a positive signal to the international community and the markets,” he said, voicing appreciation to the “very responsive” promises of other nations for Pakistan.
Dar – who took the job for the fourth time last month after his predecessor quit – acknowledged political risks.
Former prime minister Imran Khan, the cricket star turned politician ousted in a no-confidence vote in April, has been plotting a return amid protests seeking an early election.
Khan late in his term slashed petrol prices, defying his own government’s package with the IMF, which says that subsidies should only benefit the neediest as Pakistan struggles to put its finances in order.
Dar said that some of his political allies had advocated letting Khan stay on longer to face the consequences of the economic crisis.
“It would have been selfish to have a political approach,” Dar said.
BILLIONS NEEDED AFTER FLOODS
The new government took over to face unprecedented monsoon rains that submerged one-third of Pakistan – the world’s fifth most populous country.
Such disasters are forecast to worsen in the coming years due to climate change, even though Pakistan contributes less than one percent to the carbon emissions heating up the planet.
Dar said that a new study commissioned in part by the World Bank and the Asian Development Bank found that Pakistan sustained US$32.4 billion in flood losses and would require US$16.2 billion for reconstruction and rehabilitation.