Pakistan asks provinces to fund flood recovery, an IMF condition provinces call unfair
ISLAMABAD: Pakistan’s government has asked provincial administrations to finance flood-recovery projects in line with the International Monetary Fund’s (IMF) conditions under its $8.4 billion loan programs, officials from the Sindh and Khyber Pakhtunkhwa provinces said on Tuesday.
The move comes as an IMF mission led by its chief Iva Petrova is in Islamabad for talks on the second review under a $7 billion Extended Fund Facility (EFF) and the first under a $1.4 billion Resilience and Sustainability Facility (RSF). A successful review could unlock about $1 billion in budgetary support and $100 million for climate-resilience funding from the lender.
Prime Minister Shehbaz Sharif has said the recent flood damages should be taken into account and “factored in” as the IMF assesses Pakistan’s fiscal performance, arguing that the scale of the disaster underscores the need for flexibility in the review process. The floods have killed more than 1,000 people and destroyed crops and infrastructure worth around $1.3 billion, according to initial government estimates.
The IMF has long urged Pakistan to improve coordination between federal and provincial governments on natural-disaster response and financing — a measure that officials say has prompted Islamabad to ask provinces to fund part of the country’s flood-recovery program. Provincial governments, however, say the move shifts the burden of a national disaster onto their already stretched budgets.
