Pakistan meets with the IMF as the US announces new aid

Pakistan officials went to Washington DC yesterday, seeking a break in the terms of repaying loans issued from the International Monetary Fund. While the Pakistani leaders were in town, the U.S. followed up on news of an expanded aid package to the flood devastated country.

From the IPS, writer Matthew O. Berger gives us more details on the political happenings yesterday.

On Saturday, Masood Ahmed, director of the IMF's Middle East and Central Asia Department, said in a statement that in addition to the "suffering to millions of people [the floods] also pose a massive economic challenge to the people and government of Pakistan."

"The scale of the tragedy means that the country's budget and macroeconomic prospects, which are being supported by an IMF financed programme, will also need to be reviewed," he said.

Ahmed said the Fund looked forward to meeting with Pakistani officials to discuss "ways in which the IMF can assist Pakistan at this difficult juncture." The specifics of what was discussed at Monday's meetings are not yet known.

If the terms are not relaxed, officials have said they will instead seek a new loan package under new terms.

Pakistan has already been promised emergency loans of one billion dollars from the World Bank and two billion dollars from the Asian Development Bank.

The floods are reported to have already taken over 1,600 lives and displaced 4.6 million people as well as causing massive infrastructure damage and covering 1.7 million acres of productive farmland.

Meanwhile, U.S. officials followed up on Secretary of State Hillary Clinton's announcement of an expanded emergency aid package at the United Nations on Friday by quantifying some of their efforts on the ground in Pakistan.

Noting that the U.S. is the "first and most among contributors" to the relief effort, Deputy Special Representative for Afghanistan and Pakistan Dan Feldman said the government was looking to redirect existing foreign aid funds to Pakistan to meet the needs of flood victims as quickly as possible.

Clinton had announced an increase in aid from 90 million to 150 million dollars. "This money is going towards local and international NGOs, towards U.N .agencies, towards operations for NDMA [National Disaster Management Authority] through the government of Pakistan" as well as in-kind and technical assistance, Feldman said.