Bilawal wants IMF not to push flood-hit people towards more inflation

As the flood-hit areas are still reeling from the cataclysmic climate disaster, Foreign Minister Bilawal Bhutto-Zardari urged the International Monetary Fund (IMF) and global institutions not to push the affected people towards further inflation.

Islamabad had last month kicked off formal talks with the IMF to discuss an economy-rescuing plan that also includes an instalment of a $1.1 billion loan payment from a $6.5 billion bailout package, which was designed to ward off Pakistan's economic meltdown in 2019.

To meet the IMF's demand for the loan, the government has already hiked up the price of petroleum products which will move the already record-high inflation upwards and an increase in the rates of power, gas, and other commodities are also in the pipeline.

The bailout package is critical for the nation of 220 million as the State Bank of Pakistan-held foreign exchange reserves are at a critical level of around $3 billion, for the week ended January 27, which is enough to cover imports for less than a month.

While addressing a donor conference for Sindh’s flood-stricken population in Karachi, the foreign minister said: “A natural calamity like the floods was doomsday before the doomsday for us.”

At the occasion, Bilawal also inaugurated the release of funds to construct homes for the affectees in the province. Jointly organised by the Sindh government and the United Nations Development Programme (UNDP), the conference discussed the rehabilitation of areas impacted by catastrophic flooding in the province.

Initially, these funds will be utilised in Sindh’s eight calamity-hit districts — Larkana, Sukkur, Dadu, Hyderabad, Thatta, Shaheed Benazirabad, Umerkot and Tando Allahyar.

Also present at the summit, Sindh Chief Minister Murad Ali Shah said around 2.1 million homes were damaged during the province’s devastating floods.

The Sindh administration, meanwhile, has signed an agreement to reconstruct these homes under a public-private partnership.

Chief Executive Officer Housing Khalid Shaikh and Sindh Rural Support Programme’s Hadi Bux signed the agreement.

More than 1,700 people were killed and 8 million displaced by last year's flooding, which also destroyed about a million homes and businesses across the country of 220 million people, according to disaster management officials.

About 5 million people — mainly in Sindh and the southwestern province of Balochistan — are still exposed to floodwater months after monsoon rains and melting glaciers caused the disaster.

“Such a calamity has never occurred in history. One out of seven Pakistani were affected by the floods in Sindh,” FM Bilawal said, while he appreciated UN Secretary-General António Guterres’ efforts in this difficult time.

“Their standing crops have been washed away and despite tiresome efforts, they have not been able to prepare their lands for the Rabi crop and may not be able to make their flooded lands fit for the upcoming Kharif crop,” Bilawal said.

The foreign minister said it is the government’s success to get more than what was asked for from global institutions.

“The floods impacted over 30 million people, while crops were destroyed across 0.5 acres of land. There is a need for $1.5 billion to construct homes in Sindh,” Bilawal said.

The PPP chairman also highlighted the support received from global financial institutions, particularly the World Bank, and spoke about the federal finance minister’s ongoing talks with the IMF.

“Hopefully, the negotiations with IMF will remain positive. It is IMF’s responsibility to provide protection to the flood victims. We are placing the burden of inflation on the IMF’s insistence and request it to ease the conditions with the nation affected by flood devastations,” the minister said.

Commenting on the relief efforts in the province, FM Bilawal insisted on targeted relief for flood-affected areas which should focus on agriculture, energy, and fertilisers.

"This will be possible when the IMF’s conditions are relaxed. We have the solution and plans for the challenges and problems being faced," Bilawal added.