"I don't understand what happened. I mean one day the needs assessment study talked of reconstruction costs of $2.7 billion and now they are talking of $5 billion."
"The government, as you know, had estimated $5 billion after the earthquake as the total cost of reconstruction."
"Yes but they pulled the figure out of a hat. I mean it's not as if they had undertaken any damage estimate at that time. And it's not as if the government has firm figures for any loss suffered during the earthquake even now...and I mean loss in terms of life or assets."
"Yes, but I think the Government thinks it can get money this way and save face with the people. Remember the Chosen One had claimed they had broken the begging bowl, so what I am saying is that this way they can justify their seeking foreign funding."
"I think there is a legitimate case for that but most of the money coming in is at market rates. I know the government is talking of concessional funding and all, but I think the bulk of the money is at market rates and the little that is in the form of concessional funding, which means a low rate of interest, is from the Pakistan programme in any case."
"What ever do you mean?"
"Each country is allocated a certain amount of concessional funding each year, a figure based on the country's needs and performance in terms of governance issues, and so they would probably be taking money from the 2006 and 2007 Pakistan programme to support the earthquake reconstruction efforts."
"I get it. So really it would impact on our future loans."
"Indeed it would."
"What about bilaterals?"
"They are different."
"What ever do you mean?"
"They need to ensure that the country concerned has exhausted all its own resources for the relief effort. And they have to ensure good governance of the way their money will be spent."
"We are a poor country, hundreds of thousands have been made homeless..."
"Hey, I know but our President is talking of defence expenditure as being different from the earthquake expenditure..."
"What ought he have said?"
"The relief effort was being carried out by the armed forces and there is a cost to that, then they would be involved in reconstruction and there is another cost..."
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