August 23, 2010 / 6:08 AM / 9 years ago

Pakistan starts IMF talks, seeks help from floods

SUKKUR, Pakistan (Reuters) - Pakistan braced for more flooding in the south as officials began talks in Washington on Monday with the International Monetary Fund on how to shore up the battered economy to maintain stability.

Niaz Mohammad carries his sandals and a sack of supplies as he wades through waters while fleeing the flooded village of Sultan Kot, about 51 km (31 miles) from Sukkur in Pakistan's Sindh province, August 23, 2010. REUTERS/Akhtar Soomro

The IMF said it would review Pakistan’s budget and economic prospects due to the magnitude of a disaster that has ravaged crops and infrastructure, left more than 4 million homeless and raised concerns that Islamist militants may exploit the chaos.

Estimates for economic growth this year range from zero to 3 percent — below the official target of 4.5 percent — with the United States worried a weak economy could destabilize a key ally in the war against militancy.

Agriculture, the mainstay of the economy, has been hit hard. The floods have destroyed or extensively damaged crops over 4.25 million acres (1.7 mln hectares) of land — including cotton, rice, sugar cane, maize — Food Minister Nazar Muhammad Gondal told Reuters.

The total area under cultivation is about 23 million hectares (57 million acres), Food Ministry officials say.

IMF help may come in the form of lowering some of the fiscal targets of the loan program or allowing the government to abandon it and take IMF emergency funding for countries hit by natural disasters.

Mohsin Khan, former head of the IMF’s Middle East and Central Asia Department, said Pakistan’s IMF program should be scrapped and a new one negotiated with fresh funding of about $6.5 billion (4.2 billion pounds).

“It will be a very tricky balancing act but I would start with a realistic set of targets and say if things turn out to be better than expected, the targets can be revised,” he said.

He suggested Pakistan set up an independent body, in which the IMF and World Bank are advisers, to oversee the aid flows to ease donor concerns about corruption in Pakistan.

Dan Feldman, the U.S. deputy special representative for Afghanistan and Pakistan, said rebuilding from the floods could take years. “The sheer impact still needs to be assessed, but will certainly be staggering,” he told reporters.

He said more than 30 countries had pledged to contribute over $700 million for Pakistan.

The government is under intense pressure to deliver assistance to a public seething at its handling of the crisis. Any unrest could fuel a Taliban-led insurgency the military had said it made serious progress against before the floods hit three weeks ago.

Authorities have been accused of moving too slowly, and Islamist charities, some with suspected links to militant groups, have rapidly provided relief to Pakistanis, already frustrated with their leaders’ track record on security, poverty and chronic power shortages.

Since the floods struck, the Taliban had not staged any major attacks, but a suicide bomber on Monday killed pro-government cleric Noor Mohammad and 21 others in a mosque in South Waziristan on Monday, officials said.

“People were leaving the mosque after prayers when the bomber moved ahead to shake hands with my father and exploded the device,” said the cleric’s son, Noor Khanan, adding the bomber was a young boy.

South Waziristan, a semi-autonomous ethnic Pashtun region, was a stronghold of al Qaeda and Taliban militants before the government launched a military offensive last October.

Hours earlier, a bomb blast at a meeting of tribal elders killed seven people in Kurram tribal region near Afghanistan, a government official said.

In a third attack, a bomb planted under a cart went off in a market on the outskirts of the northwestern city of Peshawar, killing three people and wounding six, police said.

SOUTH ON ALERT FOR FLOODS

The worst floods in decades have been spreading through the rice-growing belt in southern Sindh province district by district, breaking through or flowing over embankments.

International Organisation for Migration spokesman Saleem Rehmat told reporters about 80 percent of the 3.9 million people in Sindh affected by the floods were displaced.

Hundreds of thousands of people have fled cities, towns and villages in the province for safer ground, disaster management officials said, adding that growing water pressure in the Indus River was one of their biggest concerns.

Food is running out in remote villages. Two exhausted-looking men wading along a flooded road in Sindh in search of supplies said they had walked for three days from their flooded village.

One of the men, Daim, was carrying a sick-looking chicken and two nearly lifeless large chicks in a basket on his head. There had been a third chick but he and his hungry companion had roasted it the night before, he said.

In other parts of the country, the scale of the humanitarian disaster is gargantuan, and growing.

At least half a million people are living in schools in flood-hit areas. The cramped, unhygienic conditions, combined with food shortages and intense heat, raise the spectre of potentially fatal disease outbreaks, such as cholera.

There are more than 120,000 case of suspected dengue and malaria, while skin infections and diarrhoea have affected hundreds of thousands more, the U.N. said.

Water has receded in some areas, but uncertainty has not.

Slideshow (37 Images)

In Mehmood Kot in southern Punjab, villagers headed back to their homes in tractors and donkey carts. Some picked up clothes and pots from the rubble of houses smashed by the floods.

“I have lost what I saved for my children,” said farmer Mohammad Mossa, 65, a father of seven. “Where will I get money for seeds?”

Additional reporting by Augustine Anthony and Kamran Haider in Islamabad; Asim Tanveer; Lesley Wroughton and Rachelle Younglai in Washington; Writing by Michael Georgy; Editing by Sanjeev Miglani and Peter Cooney

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