Press Release: IMF to Provide US$450 Million in Immediate Emergency Assistance to Pakistan and Work Toward Completion of Stand-By Arrangement Program Review
September 2, 2010Press Release No. 10/326
September 2, 2010
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), announced today that the Fund will provide around US$450 million in immediate emergency financing to Pakistan to help the country manage the aftermath of the massive and devastating floods that have hit the country.
â€œThe floods in Pakistan are first and foremost a human tragedy still affecting millions of people. But this natural disaster will also have an important effect on the countryâ€™s economy as it has caused serious damage to infrastructure, severely impacted economic outlook and resulted in a worsening of the fiscal situation,â€ Mr. Strauss-Kahn said. â€œIn response to this, I will be asking the IMF Board to approve $450 million of emergency assistance to be made available this month.â€
â€œOur dialogue with Pakistan on the current Stand-By Arrangement is progressing and the authorities have expressed their intention to implement measures for the completion of the fifth review of the program later this year. We will stay in close contact as these efforts proceed. Completion of the fifth review will allow the Fund to disburse an additional $1.7 billion, bringing total IMF disbursements (including emergency assistance) to $2.2 billion in the second half of 2010,â€ Mr. Strauss-Kahn said.
Mr. Strauss-Kahn made the announcement after meeting with Mr. Abdul Hafeez Shaikh, Finance Minister of Pakistan, as the IMF and Pakistanâ€™s authorities discuss the countryâ€™s economy in light of the floods. Commenting on these discussions, Mr. Shaikh said, â€œPakistan remains committed to the reform efforts that will put public finances on a sustainable basis and lay the foundations for growth.â€
The emergency financing would be provided under the Fundâ€™s policy for Emergency Natural Disaster Assistance (ENDA). The ENDA amount will be allocated to Pakistanâ€™s budget to support the authoritiesâ€™ emergency response. The ENDA funding, which is subject to approval by the IMF Executive Board, will be disbursed this month. The emergency assistance comes on top of the $7.3 billion provided under the current Stand-By Arrangement, in place since November 2008.