- Title: USA: Pakistan faces hard choices amid budget constraints and catastrophic floods
- Date: 25th August 2010
- Summary: SULTAN KOT, SINDH PROVINCE, PAKISTAN (AUGUST 23, 2010) (REUTERS) PAN OF SULTAN KOT ROAD AND HOUSES SUBMERGED IN FLOOD WATER MAN HOLDING CHICKEN AND ANOTHER MAN CARRYING BASKET OF CHICKENS ON HIS HEAD WALKING THROUGH KNEE DEEP WATER WASHINGTON, D.C. UNITED STATES (AUGUST 23, 2010) (REUTERS) (SOUNDBITE) (English) MASOOD AHMED, IMF DIRECTOR OF MIDDLE EAST AND CENTRAL ASIA DEPARTMENT, SAYING: "They will have to make hard choices in reallocating government investments toward higher priorities and find ways to mobilize the resources. But despite all that, what this makes even more imperative is that the international community, which has been active in helping Pakistan, will need to redouble its efforts to help the country overcome some of its difficulties imposed by this catastrophe." SULTAN KOT, SINDH PROVINCE, PAKISTAN (AUGUST 23, 2010) (REUTERS) FAMILY WALKING THROUGH DRY RAIL TRACK SURROUNDED BY FLOOD WATER THREE VILLAGERS CARRYING RATION BAGS TRACTOR CARRYING VILLAGERS DRIVING OFF ALLEY WITH HOUSES SUBMERGED IN WATER HOUSES DEMOLISHED BY FLOOD WATERS MAN SITTING ON ROOFTOP OF HOUSE TALKING ON CELL PHONE
- Embargoed: 9th September 2010 13:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: International Relations,Disasters / Accidents / Natural catastrophes
- Reuters ID: LVAESTXMCVSGAIXGUV9NPWB7ADFS
- Story Text: Pakistan faces hard choices as it decides how to allocate scarce resources for rebuilding following devastating floods, a senior International Monetary Fund official said Monday (August 23) on the first day of economic talks with Pakistani officials.
Masood Ahmed, director of the IMF's Middle East and Central Asia Department, said in an interview that while the catastrophe was still unfolding, it was clear the floods will have a major and lasting impact on Pakistan's economy.
Pakistani Finance Minister Abdul Hafeez Shaikh will join the talks in Washington on Wednesday (August 25), but he has already said he wants the IMF to ease restrictions on the $11 billion loan program approved for Pakistan in 2008.
Ahmed said the options available to the Pakistanis are to adjust the current Pakistan IMF program to factor in fiscal pressures arising from the floods, or to opt for emergency funding provided by the IMF to countries hit by natural disaster.
Even before the floods, Pakistan's economy had been pounded by a two-year financial crisis. The floods are set to compound the country's economic woes as the government is forced to deal with a growing humanitarian crisis, widespread damage to food crops and infrastructure, and lower tax revenues.
Ahmed said the talks will focus on the impact the floods will have on growth, inflation, and the budget.
"They will have to make hard choices in reallocating government investments toward higher priorities and find ways to mobilize the resources," Ahmed told Reuters Television.
He said foreign aid will be vital to help the government cope given domestic funding constraints.
"Despite all that, what this makes even more imperative is that the international community, which has been active in helping Pakistan, will need to redouble its efforts to help the country overcome some of its difficulties imposed by this catastrophe," Ahmed added.
As Pakistan appeals for aid, there are misgivings among donors about corruption and how well the money will be spent.
Meantime, in Pakistan, relief camps are springing up around cities such as Sukkur and supplies of food and shelter are pouring in but many people are choosing to remain in their flooded villages to protect what remains of their homes and possessions from looters.
In more remote villages, food is running out.
The worst floods in decades have killed nearly 1,600 people and made over four million homeless. - Copyright Holder: REUTERS
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