WASHINGTON, Aug 26 (Reuters) - Senior Pakistani finance officials joined talks at the International Monetary Fund in Washington on Thursday to try to work out the impact to the economy from the worst floods in decades.
IMF spokesman Gerry Rice said Pakistan’s Finance Minister Abdul Hafeez Shaikh and Central Bank Governor Yaseen Anwar had joined the talks, which began on Monday at IMF headquarters.
He said the sides were exploring all options for salvaging Pakistan’s economy, including easing conditions on an existing $11 billion IMF loan program and financing under an IMF facility for countries hit by disasters.
Under such a facility, Pakistan stands to get just over a $1 billion in IMF funds.
The floods have wiped out villages, roads and bridges, leaving tens of thousands of people stranded or homeless, heightening concerns about a nation that is already battling Islamist militants.
The IMF talks are still in the early stages and should last until late next week. Pakistani officials are also due to meet World Bank President Robert Zoellick on Wednesday, a World Bank spokesman told Reuters.
Asked how the talks are progressing, Rice said: "They are ongoing at a technical level and are focused on getting a better sense of the impact of the floods on the economy."
The IMF said in a statement earlier this week the floods will have a major impact on Pakistan’s economy and the scale of the flooding means that budget resources will need to be reviewed.
The World Bank and Asian Development Bank are currently doing a damage assessment of the flooding, which will determine the cost of rebuilding. Cost estimates by independent analysts have ranged from $4 billion to $15 billion.
"We don’t want to wait until all of the final details are in before we start looking at some of the possible options for how we can assist," Rice added. "We are looking at all options."
He said donors should provide grants, and not loans, to Pakistan to help with the rebuilding effort so that it does not add to the country’s debt burden. More than $800 million has been donated or pledged so far by donor countries, the foreign ministry has said.
Aid has been slow to flow to Pakistan and analysts said this was due to concerns by donors about how the money will be spent.
IMF Director for the Middle East and Central Asia, Masood Ahmed, told Reuters an IMF-supported economic framework would help provide some economic stability within which resources can be rationally allocated. He urged donors to "redouble efforts" to help Pakistan’s flood victims.
(Reporting by Lesley Wroughton; Editing by Eric Walsh)
