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ISLAMABAD, 4 July 2002 (IRIN) - Pakistan could finally be reaping the financial rewards of its unwavering support for the US-led war against terrorism. The International Monetary Fund (IMF) decided on Wednesday to release a US $114 million poverty reduction loan to the government - part of its overall three-year US $1.37 billion Poverty Reduction and Growth Facility (PRGF) arrangement. This, according to the IMF website, brings to about US $343 million the amount of money disbursed so far under the programme. PRGF loans carry an annual interest rate of 0.5 percent and are repayable over 10 years, with a five-and-a-half-year grace period on principal payments. However, in approving the loan, the fund said: "The Executive Board granted a waiver of Pakistan's non-observance of the quarterly revenue target for the period that ended March 31, 2002. The shortfall in revenue essentially reflected continued lower-than-expected imports in the aftermath of September 2001 events." The fund commended the government for "consolidating gains in macroeconomic stability and progressing with structural reforms in a difficult economic and political environment". But this was not the only money Pakistan raised this week. Also on Wednesday, the Canadian International Development Agency (CIDA) announced in a press release that its government had pledged US $10.2 million to "improve the lives of Pakistani women and provide quality basic education to Afghan refugee children in Pakistan". "CIDA and its partners are working to promote women's human rights, health, education, political participation, and economic empowerment in Pakistan," Canada's Minister for International Cooperation, Susan Whelan, was quoted as saying. According to a Dow Jones report, Pakistan, one of the world's poorest countries, is scheduled to receive about US $9.5 billion in loans and grants from its richer counterparts. Samina Ahmed, the International Crisis Group's (ICG) project director for Pakistan and Afghanistan, told IRIN on Thursday that the money pouring into the country was definitely a reward for President General Pervez Musharraf's cooperation with the west. "Absolutely, there is no doubt about it," she said. Ahmed said that when Musharraf took power in a coup d'etat in October 1999, financial aid in the form of bilateral and multilateral loans, as well as concessional grants and loans, dropped dramatically. The US imposed mandatory democracy sanctions and many financial agencies took their cue from this. After 11 September's events, however, many donors and agencies decided to give Pakistan "some breathing space, not only in loans and grants, but also in debt reservicing". Khadija Haq, President of the Islamabad-based think tank the Human Development Centre, said the increased aid Pakistan was attracting could not be attributed solely to its alliance with the Western coalition. The US $600 million package promised by the US could be described as a reward for cooperation, but much of the other money coming into the country could be attributed to strict reforms being implemented by Musharraf's government, she said. The IMF, Haq said, had probably agreed to disburse money to Pakistan because it acknowledged that budget deficit targets were impossible to meet with the need for increased defence spending, and because the security situation on Pakistan's borders had affected trade dramatically. According to a World Bank official in Pakistan, the country also increased its access to International Development Association (IDA) funds in the past financial year. "Usually Pakistan's access to the IDA funds hover around US $500 million," he told IRIN. Figures published on the IDA website indicate that access has increased by more than US $150 million. The official told IRIN that while the bank's management did not base its decisions on political factors, it was possible that politics played a role in where money was directed. "We [the World Bank] don't get involved in politics. We look at the country's economic performance and its implementation of reforms ... But there may be political influences because the people who sit of the board of executive directors represent their governments on the board and they may have their own political concerns and likes and dislikes," he said.