IMF to Provide $450 Million in Flood Aid to Pakistan
“This natural disaster will have an important effect on the country’s economy. It has caused serious damage to the country’s infrastructure, severely impacted its economic outlook, and resulted in a worsening of the fiscal situation,” said IMF Managing Director Dominique Strauss-Kahn. “In response to this, I will ask the IMF Board to approve $450 million in emergency assistance to be made available this month.”
The emergency financing, which is subject to approval by the IMF’s Executive Board, would be provided under the IMF’s policy for Emergency Natural Disaster Assistance (see box). The funds are expected to be disbursed later this month.
IMF Survey online spoke to the IMF’s Pakistan mission chief, Adnan Mazarei, about the Emergency Natural Disaster Assistance (ENDA).
What does Pakistan need right now?
MAZAREI: The priority is immediate assistance to deal with the urgent humanitarian needs.
What is the significance of the $450 million ENDA assistance?
MAZAREI: As the Managing Director and the Minister of Finance for Pakistan explained in their press statements, the ENDA disbursement is fast, nonconditional, and additional to the existing Fund-supported program.
When will the disbursement be made?
MAZAREI: The emergency assistance can be disbursed on the approval of the Executive Board, which is expected within a couple of weeks.
Would the assistance lead to any reduction in other Fund disbursements?
MAZAREI: No. The ENDA will not lead to a reduction in our large assistance program for Pakistan. The next disbursement under the Stand-By Arrangement is about $1.7 billion on the completion of the fifth review, which is expected before the end of this year.
Will the fifth review provide for more flexibility in the overall program?
MAZAREI: Yes. The authorities’ macroeconomic program under the Stand-By Arrangement is being adjusted to take into account the additional expenditure required to deal with this humanitarian disaster. The money for this will come from our new emergency assistance as well as from other multilateral and bilateral assistance.
Assessing the cost
A Pakistani delegation, led by Finance Minister Abdul Hafeez Shaikh, met with IMF staff and management in Washington during the past week to discuss the disaster’s implications for the...
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