Pakistan will ask international lenders for billions of dollars worth ofnew loans to rebuild the country after calamitous floods uprooted 33mnpeople and pushed its cash-strapped economy even closer to insolvency,reported Financial Timeslink.
Prime Minister Shehbaz Sharif said Islamabad was not trying to rescheduleits external debt, worth about $130b, but it did need “huge sums of money”for “mega undertakings” such as rebuilding roads, bridges and otherinfrastructure damaged or washed away in a deluge scientists have linked toclimate change.
“We are not asking for any kind of measure [such as] a rescheduling or amoratorium,” Sharif told the Financial Times. “We are asking for additionalfunds.”
Pakistan’s leader would not be drawn on the exact amount his government wasseeking, but repeated the $30bn estimate of the damage caused by thefloods, the worst natural disaster in the country’s 75-year history. “Thereis a gap — and a very serious gap — which is widening by the day betweenour demands and what we have received,” Sharif said at his home in Lahore’supscale Model Town neighbourhood.
The prime minister also hinted that the failure of the internationalcommunity to rally resources risked fuelling political instability in thenuclear-armed state, where populist opposition leader Imran Khan has beencapitalising on widespread discontent.
Khan’s Pakistan Tehreek-e-Insaf party on Sunday won six out of eight seatsup for grabs in by-elections held in three provinces. Analysts said theresults bolstered the ousted prime minister’s demand for early elections.
“We are obviously concerned because if there is dissatisfaction leading todeeper political instability and we are not able to achieve our basicrequirements and goals, this can obviously lead to serious problems,”Sharif said. “I’m not saying it in terms of any kind of threat, but I’msaying there’s a real possibility.”
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French president Emmanuel Macron has promised to host a donors’ conferenceto boost Pakistan’s fundraising efforts. No date has been set for theconference but Sharif said he expected it to take place in Paris inNovember. The UN is finalising its own assessment of the amount Pakistanwill need to rebuild after the floods.
Sharif, younger brother of former prime minister Nawaz Sharif, took powerin April after Khan lost a no-confidence vote. His government narrowlystaved off a liquidity crisis by securing a $1.1bn disbursement from theIMF in August as well as pledges of financing from China, Saudi Arabia andother bilateral lenders.
Pakistan has had a long and tortuous relationship with the IMF, which hasrepeatedly urged the country to abandon unfunded energy subsidies that havecost the state heavily at a time of rising global prices.
Khan introduced a round of petrol and diesel subsidies in his final days inoffice, which Sharif’s government slashed in June to control spending andmend fences with the IMF.
