Pakistan's prime minister on Monday asked the IMF for a pause in its demands for economic reforms before releasing more financial aid, as the country tries to rebuild after catastrophic floods.

Shehbaz Sharif said he was trying to persuade the International Monetary Fund (IMF) to give Islamabad some breathing space as it tackles the "nightmarish" situation.

The global lender wants Pakistan to withdraw remaining subsidies on petroleum products and electricity, aimed at helping the population.

Pakistan's economy has crumbled alongside a simmering political crisis, with the rupee plummeting and inflation at decades-high levels, but the floods and the global energy crisis have piled on further pressure.

Sharif came to office in April last year, ahead of the floods in July and August.

A $6-billion IMF deal negotiated by the previous government was restarted after Pakistan finally met conditions such as ending subsidies on fuel.

But Islamabad has so far only received half the funds — the last payment in August — with a further review of the package ongoing.

At the United Nations in Geneva for a conference on Pakistan's recovery from last year's catastrophic monsoon floods, Sharif was asked by reporters about the block on IMF funds.

"Even before these floods hit Pakistan, we were already facing humongous challenges," he said.

"Yet we had to again connect with the IMF and resurrect an agreement which was violated by the previous government — and accept even harsher conditionalities," said Sharif.

He said Pakistan was complying with the IMF's conditions "as best as possible" but asked "how on Earth" the additional burdens could be shouldered by the country's poorest.

"Yet we are committed to IMF's programme. We will do everything to comply with the terms and conditions. Though I am constantly trying to persuade them: please give us a pause," he said.

– 'Be considerate' –

Sharif spoke with IMF Managing Director Kristalina Georgieva on Saturday and asked her to "kindly be considerate and compassionate and give us some breathing space", he said.

"This is an ongoing dialogue. I'm sure one day soon we will be able to convince them through logic and through facts.

Finance Minister Ishaq Dar was due to meet an IMF delegation in Geneva on Monday, a Pakistani minister confirmed to AFP on condition of anonymity.

Foreign Minister Bilawal Bhutto Zardari told AFP in an interview he was "confident" that Dar would land the deal.

He said Pakistan was "committed to the broad economic reform that is required and we are committed to the IMF programme", he said.

He acknowledged that the devastation from the floods had "knocked us off centre, which does mean we need a little bit more time".

But he dismissed a question about Pakistan's prospects of obtaining financing if the IMF deal falls through.

"I can envision a scenario where we may have the IMF plus friendly countries, but I don't see any scenario that does not include the IMF," he said.

Economists and traders estimate the country has around three weeks of foreign exchange reserves left to service imports and a swift IMF cash injection is the only way to shore up the economy.

At the Geneva conference, Britain encouraged Pakistan to continue its macroeconomic reforms and conclude the ninth review of the IMF programme.

Development Minister Andrew Mitchell said it would be much easier for the world to help Pakistan "if Pakistani taxpayers are seen to be playing a core part in this effort".

Pakistan flood recovery needs 'massive' investment: UN
Geneva (AFP) Jan 9, 2023 –

The United Nations called Monday for more than $8 billion to help Pakistan recover from last year's devastating floods and improve its ability to resist the ravages of climate change, as financial pledges stacked up.

"No country deserves to endure what happened to Pakistan," UN Secretary-General Antonio Guterres told an international conference in Geneva.

The unprecedented monsoon floods last summer at one point submerged a third of the country and killed more than 1,700 people, while over 33 million others suffered its impacts.

Eight million people were displaced, millions of acres of agricultural land were ruined, and around two million homes were destroyed, while nine million more people were pushed to the brink of poverty.

"You will appreciate that we need to give 33 million people their future back," Pakistan's Prime Minister Shehbaz Sharif told the conference.

According to the Resilient Recovery, Rehabilitation and Reconstruction Framework that Pakistan presented on Monday, it will need $16.3 billion over the next three years for the initial efforts to rebuild and improve its ability to withstand climate change.

Pakistan's government has said the country should be able to cover half the cost, but is urging the international community to pay for the rest.

"We must match the heroic response of the people of Pakistan with our own efforts and massive investments to strengthen their communities for the future," Guterres said.

– 'Victim' –

In addition to donations, Guterres also called for a revamp of the global financial system to make it easier for crisis-hit middle-income countries like Pakistan to access crucial financing.

"Pakistan is also a victim of the man-made disaster of a morally bankrupt global financial system," he told reporters.

"A system that denies middle-income countries debt relief and concessional financing to invest in resilience and recovery — That must change," he said.

The World Bank meanwhile emphasised the need for Pakistan to "keep spending within sustainable limits".

"A truly resilient recovery will not be possible without additional fiscal and structural reforms," said Martin Raiser, the World Bank's vice president for the South Asia region.

He urged Pakistan to "address the inefficiencies that are muting investment" and to opt for "more progressive, wider-based taxation".

The Pakistani delegation is also due to meet with International Monetary Fund representatives in Geneva.

– 'Nightmarish' –

Sharif told reporters he had asked the IMF for a pause in its demands for economic reforms before releasing more financial aid.

The global lender wants Pakistan to withdraw remaining subsidies for petroleum products and electricity, aimed at helping households, before releasing the remainder of a $6 billion deal negotiated by the previous government.

But Sharif asked "how on Earth" the additional burdens could currently be shouldered by the country's poorest, describing the situation as "nightmarish".

Guterres lent his support. "Economic stability is very important," he said, before quipping, "The day we will all be dead, there will be perfect economic stability."

Pakistan, with the world's fifth-largest population, generates less than one percent of global greenhouse gas emissions but is one of the nations most vulnerable to extreme weather caused by global warming.

– 'Loss and damage' –

Guterres said Pakistan's "monsoon on steroids" proved the need for the agreement reached at the UN's COP27 climate summit in November to create a "loss and damage" fund, aimed at covering the climate-related destruction endured by developing nations.

"If there is any doubt about loss and damage, go to Pakistan," he said.

Several countries and organisations appeared to heed the call, with France pledging to contribute 360 million euros ($384 million) towards the plan, and an additional 10 million euros for humanitarian aid.

Washington meanwhile pledged another $100 million towards Pakistan's recovery, doubling its contribution from an initial announcement last August.

And the Islamic Development Bank pledged a full $4.2 billion in financing over the next three years.

The final amount of pledges should be announced later Monday.