22 Aug 2010

Pakistan floods seen as massive economic challenge - IMF

7:20 am on 22 August 2010

The International Monetary Fund says the floods which have devastated Pakistan will present a massive economic challenge to its government and people.

The IMF will start talks with Pakistani officials in Washington to see how the fund can best give help.

The BBC reports the government has asked the World Bank and the Asian Development Bank to carry out damage assessments which officials say will take a month.

The most immediate pressure on the Pakistani government is to reprioritise its proposed budgets.

The floods began last month in north-west Pakistan after heavy monsoon rains and have since swept south, through the Punjab and Sindh provinces.

Officials say that about 6.5 million acres of crops there have been washed away.

About one-fifth of the country is underwater and an estimated 20 million people are affected.

The National Disaster Management Authority estimates that nearly one million houses have either been washed away or seriously damaged.

The government of Punjab province says it will need $US1.3 billion for immediate relief and short-term rehabilitation of roads, dykes, the electricity network and the irrigation system.

In June, the government announced a $US33 billion budget for 2010-11 with a projected gap of $US8 billion which it proposed to bridge through foreign loans and borrowing from banks.

This gap could now widen by a further $US2 billion.

The United Nations issued an appeal on 9 August for $US459 million to cover the first 90 days of the disaster. Almost 70% of this has been raised so far.