Pakistan: IMF to provide $1.1 billion after floods
August 30, 2022
The money was part of a government bailout loan from 2019, but recent payments had been withheld. The crisis has prompted the Pakistani government to consider resuming trade with India.
Flooding has been reported in all four of Pakistan's provinces. Pictured is a flooded residential area in the southwestern Balochistan province.Image: Amer Hussain/REUTERS
The money was originally part of a government bailout loan from 2019, but the final payments had been held up after the previous administration of Imran Khan did not meet the IMF's demands to cut energy subsidies.
"Alhamdulillah the IMF Board has approved the revival of our EFF program," Pakistan's finance minister Miftah Ismail said on Twitter.
The IMF has also agreed to extend the program by an additional $1 billion, he later added.
Flooding has been especially severe in the southeastern province of Sindh, which contains most of the Indus River Delta and the Sukkur Barrage
It comes as the United Nations launches an appeal on Tuesday for $160 million to fund emergency aid.
The country's planning minister Ahsan Iqbal believes reconstruction could cost upwards of $10 billion.
IMF welcomes spending cuts
The current government of Prime Minister Shehbaz Sharif attracted widespread criticism in recent months after it imposed three fuel price hikes — cumulatively totaling 50% — and raised the cost of electricity to effectively end the subsidies of his predecessor.
However, the policies brought government spending in line with the IMF's existing requirements for the massive loan. In a statement, the IMF did not mention the floods specifically but instead welcomed the new spending cuts.
"Pakistan's economy has been buffeted by adverse external conditions, due to spillovers from the war in Ukraine, and domestic challenges," the IMF's deputy managing director Antoinette Sayeh said.
"Steadfast implementation of corrective policies and reforms remain essential to regain macroeconomic stability, address imbalances and lay the foundation for inclusive and sustainable growth."
Catastrophic flooding continues in Pakistan
According to official figures, 1,061 people have died so far amid severe monsoon floods in Pakistan. The disaster has been devastating to the country, which was already mired in economic crisis.
Image: Shakeel Ahmed/AA/picture alliance
A country under water
Much of the country looks like this aerial shot of the northern Pakistani city of Charsadda. It’s "a climate dystopia on our doorstep," said Pakistan's Climate Change Minister Sherry Rehman. According to the Statistical Meteorological Office, there has been twice as much rainfall across the country than usual at this time of year. In some areas, even four times as much.
Image: Abdul Majeed/AFP/Getty Images
Saving what can be saved
A group of men near Peshawar use a makeshift raft to carry their belongings to higher ground. Pakistan is currently being hit by the worst floods since 2010, when almost a fifth of the country was under water, and more than 2,000 people died.
Image: Muhammad Sajjad/AP Photo/picture alliance
Entire villages washed away
Like so many others, this man lost his house in Jafarabad to the floods. Since the monsoon rains began in June, nearly one million homes have been destroyed or damaged, and entire villages have been washed away. According to the National Disaster Management Authority, this year's flooding has affected more than 33 million people, one-seventh of the population.
Image: Amer Hussain/REUTERS
A country engulfed
The floods have hit Pakistan in the middle of a severe economic crisis. Rising commodity prices were already causing hardship, but now prices for staple foods like onions, tomatoes and chickpeas are also skyrocketing. According to government figures, the state of Pakistan itself has recently come close to insolvency.
Image: Fayaz Aziz/REUTERS
Wading through troubled economic waters
The IMF is set to decide on Aug. 29 whether to approve the resumption of a $6 billion loan program to help Pakistan service its external debt. This does not take into account the funds the country will need to repair the damage caused by this monsoon season, not to mention aid for the people who have been affected.
Image: Muhammad Sajjad/AP Photo/picture alliance
Thousands sleep in tents
Thousands of people displaced by the floods are now living in temporary camps like this one in Charsadda. Many are located along highways and railroad tracks because their embankments are often the only dry ground to be found. Each day, more people arrive with what belongings they were able to rescue from the water.
Image: Abdul Majeed/AFP
International aid arrives
Rescue workers unload tents for those stranded by the floods in the Swat Valley on Aug. 28. Planes from Turkey and the United Arab Emirates have begun bringing supplies to the capital of Islamabad, and Pakistan's National Disaster Management Agency has also begun distributing relief. But one senior officer reported that there are hardly any landing sites available in the affected areas.
Image: Naveed Ali/AP Photo/picture alliance
Relief efforts delayed by widespread destruction
The floods have affected all four provinces in Pakistan. Countless roads and bridges have been destroyed, making relief efforts difficult. This family in Peshawar has taken shelter in a tent. Whether they can also be supplied with food will only become clear in the coming days. But the weather forecast is some cause for hope: There is no rain expected in the coming week.
