Pakistan braced for more flooding in the south as officials began talks in Washington on Monday with the International Monetary Fund on how to shore up the battered economy to maintain stability. The IMF said it would review Pakistan's budget and economic prospects due to the magnitude of a disaster that has ravaged crops and infrastructure, left more than 4 million homeless and raised concerns that Islamist militants may exploit the chaos, according to Reuters. Estimates for economic growth this year range from zero to 3 percent -- below the official target of 4.5 percent -- with the United States worried a weak economy could destabilize a key ally in the war against militancy. Agriculture, the mainstay of the economy, has been hit hard. The floods have destroyed or extensively damaged crops over 4.25 million acres (1.7 mln hectares) of land -- including cotton, rice, sugar cane, maize -- Food Minister Nazar Muhammad Gondal told Reuters. The total area under cultivation is about 23 million hectares (57 million acres), Food Ministry officials say.fiscal IMF help may come in the form of lowering some of the fiscal targets of the loan program or allowing the government to abandon it and take IMF emergency funding for countries hit by natural disasters. Mohsin Khan, former head of the IMF's Middle East and Central Asia Department, said Pakistan's IMF program should be scrapped and a new one negotiated with fresh funding of about $6.5 billion. "It will be a very tricky balancing act but I would start with a realistic set of targets and say if things turn out to be better than expected, the targets can be revised," he said. He suggested Pakistan set up an independent body, in which the IMF and World Bank are advisers, to oversee the aid flows to ease donor concerns about corruption in Pakistan.
