EDITORIAL: The international community has disbursed 58.14 million dollars for the people affected by floods so far against a joint flash appeal for 160 million dollars launched by the United Nations and the government represented by Foreign Minister Bilawal Bhutto Zardari.
The Minister of State for Finance, Ayesha Ghous Pasha, in an exclusive interview with Business Recorder noted that the government will seek additional funds from donors for foreign-funded projects that suffered massive losses due to flash floods and rains with one-third of the country inundated at present.
While the UN and the Foreign Minister’s plea clearly focused on rescue and relief operations that are ongoing and Ayesha Pasha’s focus was on rehabilitation, which would require a detailed assessment of the damage which, she stated, would be possible once the waters recede, yet an initial assessment of the damage has been made and presented to Ayaz Sadiq, the Federal Minister for Economic Affairs.
The onslaught of Covid-19 in March 2020 led to the quick disbursement of an emergency relief package of 1.6 billion dollars by the International Monetary Fund (as a small component of its worldwide Covid-19 relief package) and a cessation of all harsh upfront conditions agreed under the 6 billion dollar Extended Fund Facility (EFF) programme that required tight monetary and fiscal policies. The impact of Covid-19 on the general public as well as on the government resources compared to the 2022 floods was relatively small and therefore the country’s need much greater.
Other multilaterals, including the World Bank, ably chipped in as well. In addition, again as a global effort by the G-7 countries to provide fiscal space to debtor countries, a ‘Debt Relief Initiative’ was launched for a couple of years, which the government of Pakistan availed.
One would, therefore, hope that the government seeks similar support from the IMF, other multilaterals as well as bilaterals to ensure that relief and rescue operations followed by rehabilitation are financially implementable. In this context, one would hope that the failure to refer to floods by the IMF in its press release dated 29 August approving the disbursement of the 1.17 billion dollar tranche was an oversight, albeit inexplicable, and not a deliberate decision to insist on harsh upfront conditions that neither the general public can possibly withstand today and nor is there fiscal space for the government to manipulate.
However, the decision to further raise the prices of petroleum and products, reflecting a rise in petroleum levy of 17.50 rupee per litre to a whopping 37.50 per litre (with 2.50 rupee per litre reduction in petroleum levy for diesel) strengthens the argument that the Fund is in no mood to provide any leverage to the hapless government and people of this country.
It is important to note that the 2010 devastating floods are being compared to the 2022 floods with a consensus that the latter far outpaced the former in terms of damages to people’s livelihoods and infrastructure. In 2010 by the end of August worldwide donations for humanitarian assistance were 687 million dollars with a further 324 million dollars of uncommitted pledges. The UN spokesperson at the time referred to the relief effort as “a marathon at sprint pace” while acknowledging the shortcomings in the effort as needs far outpaced available resources.
The United Nations’ Office for the Coordination of Humanitarian Affairs revealed that by 2011 a total of 2.65 billion dollars had been raised in humanitarian support (the largest, as at present, by the US at 25.8 percent) followed by private individuals and organisations (13.4 percent) and Japan (11.3 percent). It maybe recalled that Hillary Clinton, the US Secretary of State at the time, suggested that Pakistan government enlarges its tax base by asking the wealthy to contribute more. Till date information on how much, if any amount, has been donated for the relief effort by individual wealthy politicians, including the Prime Minister and members of his family, the Finance Minister as well as the Zardaris and Imran Khan, has not been shared with the general public.
It is, therefore, necessary to explore all avenues to meet the emergency that has been declared, however, there are serious concerns given the apparent separation of donations procured by the eleven-party coalition government and the Pakistan Tehreek-e-Insaf (PTI) which need to be rationalized to ensure that each province receives its due share based on need and there is no duplication of effort.
Copyright Business Recorder, 2022