Pakistan floods require new debt talks with IMF, foreign minister Bilawal says
Islamabad: Pakistan’s foreign minister said his country will need to revisit an International Monetary Fund package signed in August given the huge financial toll from recent floods, and he warned the US against pushing his country to choose between China and the West.
Bilawal Bhutto Zardari, 34, told Bloomberg News on Wednesday that damage from the floods is expected to exceed $30 billion and his government will need fresh talks with the IMF on the $1.1 billion loan. He reiterated his country’s need for debt relief and warned of a looming food crisis caused by the widespread flooding as well as the war in Ukraine.
“With the floods, all those figures, everything that that arrangement is based upon was washed away,” Bilawal said in an interview at Bloomberg’s Washington bureau. “We will have to have a more detailed conversation with the fund and other international financial institutions about how we’re going to approach this.”
Bilawal said more than four million acres of crops had been destroyed and that disruptions to the wheat-planting season will worsen the plight of Pakistanis. More than 1,500 were killed and millions displaced by the floods.
He said that rich nations responsible for global warming should help because Pakistan contributes 0.8 per cent of the global carbon footprint but is the eighth-most climate-stressed country.
Bilawal said Pakistan — which spent years building coal-fired power plants with tens of billions of dollars in Chinese funding — now hopes to focus on cleaner energy. He also suggested Pakistan’s choices on renewables would depend on whether industrialized nations want to get involved or leave the country to pursue cheaper options
As an example, he cited how after the global financial crisis, Pakistan was “in the naughty books” with the US and had to pursue infrastructure funding from China.
“We aspire to not only get out of this crisis, but we’d like to be able to be in a position to build back in a better manner, in a more climate-resilient manner, in a greener manner,” he said. “Either we do that or, if can’t get the financing together, we build back in a dirtier manner, in a cheaper manner, in a quicker manner.”
Given those pressing needs, Bilawal warned that countries like Pakistan can’t be forced to choose between the US and China.
“You can’t expect the entire world to decouple from anyone that you have this difference of opinion with,” he said. “We can’t live with these extreme sort of exclusionary politics, whether it’s domestically or internationally.”
He also repeated calls for the US to unfreeze billions of dollars of Afghan central bank funds following the fall of Kabul to the Taliban, noting that “it does set a bad precedent” and would worsen human rights in Afghanistan rather than pressure the government to improve its record.