September 1, 2010 / 9:13 PM / 9 years ago

World Bank boosts Pakistan flood support to $1 bln

WASHINGTON (Reuters) - The World Bank has increased funding to help Pakistan cope with catastrophic flooding by $100 million, to a total of $1 billion, the bank said in a statement on Wednesday.

“The World Bank is committed to helping the people of Pakistan during this time of need and has made US$1 billion available to finance immediate recovery needs and longer-term reconstruction,” the statement quoted World Bank President Robert Zoellick as telling Pakistani Finance Minister Hafeez Shaikh in Washington.

The funds are being diverted to flood use from money already earmarked for Pakistan. They will come from the International Development Association, the bank’s fund for the poorest countries, and are concessional and carry no interest payments, the statement said.

Zoellick also told Shaikh that continued economic, institutional and governance reforms were critical to maintaining donor confidence.

“We need to respond strongly to the crisis at hand, but we need to do it without losing sight of important economic reforms,” he was quoted as saying.

“Renewed commitment to governance and fiscal reforms will be important to mobilize domestic revenues and ensure that funds reach the poor people it is intended for. The response of donors to the floods will also depend on the government’s ability to deliver in this area,” he said.

Shaikh is part of a delegation visiting Washington for discussions with the International Monetary Fund about Pakistan’s $11 billion IMF loan program.

While vowing to remain on track with the 2008 IMF loan program, under which the country pledged to implement tax and energy sector reforms, the minister also said he would seek understanding from the international community about the troubles Pakistan faced from the catastrophic floods.

Pakistani Information Minister Qamar Zaman Kaira said on Wednesday the country would register economic growth of just 2.5 percent in the year to June 2011 because of the impact of flooding, trimming an earlier 4.5 percent target.

Reporting by Paul Eckert; editing by Mohammad Zargham

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