In the midst of the catastrophic floods of biblical proportions, Pakistan's new government has made great strides: In order to give the battered country at least some financial breathing space and be able to stay in office, it has found additional donors.

The flood catastrophe, which has already killed more than 1,100 people, makes the headlines.

But even before that, the country was shaken by a deep economic crisis.

Christopher Hein

Business correspondent for South Asia/Pacific based in Singapore.

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Some transport workers, for example, only earn a tenth of their previous monthly wage of around 15,000 rupees (67.58 euros) because the government has banned the import of luxury goods to save foreign exchange.

The salary of just under 7 euros now covers half a canister of frying oil for the family of five per month – nothing more.

Others can no longer bring their goods onto the market because they cannot pay the diesel price.

Generators that power factories are shut down.

The shortage of raw materials and food, the high dollar exchange rate and the opposite fall in the external value of the rupee lead to a toxic mixture.

The poor, who spend half their income on food, go under first.

In view of the inflation rate of 21.3 percent, they can no longer afford school education for their children, medicine and sufficient food.

More and more children now have to go back to work to support their families.

At the same time, as in Sri Lanka, more and more people are trying to emigrate.

64 percent of the more than 225 million Pakistanis are younger than 30 years.

Conflict with ex-Prime Minister Khan

As in the other countries of South Asia, the International Monetary Fund (IMF), which is actually viewed critically, is very popular as a savior.

One problem with his commitment, however, are the conditions that the fund demands for fresh money.

The situation in Pakistan is particularly explosive because the country is politically divided.

The coalition government led by Prime Minister Shehbaz Sharif, who comes from an influential dynasty, drove the incumbent Prime Minister Imran Khan out of office in April with a vote of no confidence.

There are now charges against the popular former world cricket star Khan under the tough anti-terror law.

The IMF is now helping to stabilize the country and its government, which also plays an important role in the Afghan conflict: it is paying out the $1.17 billion tranche of a loan that has already been agreed.

Added to this are special drawing rights amounting to 720 million dollars.

The pledge from Washington will help Islamabad receive more funding from multilateral organizations.

But this is grist for Khan's mill: since he was deposed, he has spoken of an American-led conspiracy against him.

An "imported government" has received the blessing of the influential Pakistani military, without which nothing works in the economy.

In Pakistan, too, the IMF is seen as a largely American-led organization.

As Prime Minister, Kahn himself sealed a $6 billion aid package with the fund over a period of three years in 2019.