EDITORIAL: Once again we have to be arm-twisted by outsiders into doing what is good for us. IMF’s (International Monetary Fund’s) advice to Pakistan, about the “need to be transparent on climate-related actions that have budgetary implications to support policymaking and climate financing”, reflects on the kind of investments Pakistan will have to employ, and seek, to weather the storm that it finds itself at the centre of. It is also very timely, coming just ahead of the COP28 summit in Dubai, where caretaker Prime Minister Anwaarul Haq Kakar reminded the world of the promises and pledges made after last year’s devastating floods.
Nobody needs to be reminded that Pakistan is one of the worst-affected countries by climate change despite contributing one of the lowest amounts of carbon emissions to the atmosphere, of course, so the big question now is arranging the money to meet the challenge. So, while IMF’s advice is spot on, and Pakistan must indeed erect the kind of infrastructure that meets the demands of climate change, it should also know that its own “upfront conditions” rob the country of any leverage when it comes to fiscal experiments, however necessary. In fact, the best the Finance Ministry and Planning Commission can do — who have been directed to “come up with a proposal” that can be included in the next budget — is publish climate-related spending for the ongoing fiscal, which has also been asked for.
That makes COP28 far more important for countries like Pakistan than the rest of the world. It also makes IMF’s intervention, especially its timing, very crucial. Because directing the next budget from this far away is also an implicit recognition of the fact that Pakistan will definitely be on another bailout programme after the SBA (Stand-By Arrangement). And it was a smart decision to announce it to the world ahead of the summit, so some of the more prominent countries are encouraged to back their usual, headline-grabbing promises with solid action.
Last year’s experience alone shows that Pakistan has no time to waste. The floods affected about 35 million people and blew a near-$20 billion black hole in the economy, which was already on life support. The World Bank estimates that Pakistan will need about $348 billion — foreign funding, of course — by 2030 as nature’s fury inevitably worsens. Therefore, unless countries and institutions that have money to lend overcome their paralysis very quickly, climate problems will snowball in southeast Asia.
It’s a shame that no government gave this matter the importance it deserved till it was too late. Even now, if it hadn’t been for the Fund, the best effort would have been pleading hard enough at COP28 to get some of the money flowing. No thought would have been given to tweaking the budget, or at least getting the ball rolling on an effective action plan. That nobody cared even as glaciers disappeared and rainfall and extreme temperatures increased exposes the criminal negligence of successive administrations.
Yet, whether or not this matter gets appropriate attention even now, after it’s being forced to the top of the priority list, still depends on the outside world. It’s a tragedy that whatever can be done to save this country from extreme weather is only possible if someone else pays for it. That doesn’t mean, however, that the government would be able to wriggle out of drastic local reforms as usual. It will have to change the way some sectors and institutions are given the largest pieces of the pie, and it will no longer be able to protect interest groups and political mafias that have made it their privilege to forever live outside the tax net.
Copyright Business Recorder, 2023
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