EDITORIAL: The initial assessment of the massive devastation wreaked by the floods is estimated at 10 billion dollars that includes rehabilitation of the over 33 million displaced and loss in terms of property — public and private.

The country is at present in its relief and rescue phase for which the joint United Nations and Pakistan government appeal has projected an amount of 160 million dollars out of which only about half has, so far, been realised.

In addition to foreign government assistance and private pledges from overseas Pakistanis/non-Pakistani nationals during the Pakistan Tehreek-e-Insaf-sponsored telethon chaired by Imran Khan and donations channeled through local welfare/charitable institutions with offices abroad.

The Pakistan government, as per Finance Minister Miftah Ismail, is diverting assistance to the flood victims from the Public Sector Development Programme (PSDP) which was budgeted at 727 billion rupees though analysts claim that this was in all probability overstated for political reasons, defined narrowly as more outlay on development than the previous government — a pledge that in most years in the past has never been disbursed by the end of the year.

It is unclear whether there is any synchronicity between the different entities engaged in relief and rescue operations to ensure there is no duplication of effort in the delivery of assistance to the victims of the floods. And additionally there is serious concern amongst donors, foreign nationals and Pakistanis alike, that the assistance is actually reaching the victims rather than disappearing in the pockets of those who are tasked to deliver it.

Already, there are disturbing reports that instead of distributing 25,000 rupees per family, as announced by the government, 23,000 rupees is being disbursed. It is within this context that Transparency International-Pakistan (TI-P) has urgently recommended to the government, based on an assessment made during a donors workshop on experience gained after the 2005 earthquake and 2010 floods, to set up a nationwide tracking system of disbursements accessible to all, disbursement which must take account of the wishes of the affected communities, set up grievance and anti-corruption measures, and establish effective internal and external audit of the assistance.

The West is clearly focused on extending major assistance to several packets of conflict around the world today with assistance to Ukraine far outpacing any assistance to countries such as Pakistan which is not as geopolitically important and which is in the throes of a natural disaster not of its own making as Pakistan’s contribution to emissions that are the cause of the climate change is around 1 percent.

It is important to note that while at present the focus is on relief and rescue given that the country is in the throes of a mammoth natural disaster, however, to ensure a comfort level to international donors one would urge the government to begin to establish the nationwide tracking system of all assistance received and disbursed.

Pakistan’s internal capacity to deal with the crisis caused by the floods is exacerbated not only because of lack of fiscal space but also due to the ongoing Russia-Ukraine war with exports suffering and imports getting costlier which is further undermining the already fragile economy.

The rupee continues to depreciate in spite of the 1.17 billion dollars disbursement by the International Monetary Fund (perhaps partly because of the lack of any reference to the floods and the projected fallout in the voluminous Fund seventh/eighth reviews report, the World Bank however has pledged diverting around 300 million dollars from pledged assistance to flood relief while Asian Development Bank announced 3 million dollars flood assistance).

In addition, it has been reported that Pakistan’s dollar bonds due in 2031 further tumbled to 66.6 cents to the dollar.

The economy was already very fragile before the onslaught of the floods and as the massive scale of the disaster is becoming known, there are very disturbing signs on all macroeconomic indicators. One hopes that the government revisits its expenditure priorities because with revenue sources compromised due to the floods, the onus rests with the government’s capacity to slash non-flood-related current expenditure.

Copyright Business Recorder, 2022