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Last Updated: Wednesday, 5 January, 2005, 22:44 GMT
IMF in tsunami assistance pledge
Tsunami victims in Aceh
The emergency loan is supported by economic policy advice
The International Monetary Fund (IMF) has offered up to $1bn (530m) in financial assistance to nations affected by the Asian tsunami.

A statement from IMF director general Rodrigo Rato came ahead of a donor meeting in Jakarta on Thursday.

The United Nations said earlier that aid pledges have topped $3bn.

Member nations given IMF emergency loans in the wake of natural disasters in the past have included earthquake-hit Turkey in 1999.

Among the other recent recipients were Bangladesh following floods in 1998, and Honduras, Haiti and the Dominican Republic after hurricanes in the same year.

Since 1962, 34 countries have been given more than $2.3bn under the programme.

Assessment requirements

A country applying for emergency assistance needs to describe the economic policies it intends to pursue.

This financing could be made available quickly and without an IMF program
Rodrigo Rato, IMF chief

It is also expected to indicate an intent to develop a more detailed policy programme under one of the fund's regular lending facilities.

An emergency loan is usually limited to 25% of its IMF quota and is subject to repayment within five years.

"This financing could be made available quickly and without an IMF program," Mr Rato said.

"The financing needs have yet to be fully assessed," he added.

"This, together with the most appropriate forms in which the assistance should be delivered, will be discussed tomorrow (Thursday) and in the coming days."

Debt relief

World leaders have raised hopes of a massive co-ordinated response to the disaster, ahead of the major conference in Indonesia on Thursday.

UN Secretary General Kofi Annan is expected to issue a formal appeal for funds at the meeting.

The donors at the conference will discuss whether to freeze debt repayments - or even wipe out debt altogether - from the affected countries, particularly Indonesia and Sri Lanka, which bore the brunt of the tsunami.

The agenda will also include how to co-ordinate the relief effort, and how a tsunami warning system could be set up.

US Secretary of State Colin Powell and the Australian, Chinese and Japanese prime ministers are among those expected at the talks.


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