Finance Minister Miftah Ismail has repeatedly claimed that the harsh conditions agreed on behalf of the hapless people of this country in the sixth/seventh review documents uploaded by the International Monetary Fund (IMF) on 2 September reflect the best that could be agreed on at the time. Middle of this week past he claimed that he would now begin talks with the Fund on the devastation caused by the floods.
The question is why did Ismail not mention floods at all in the Letter of Intent (LoI) dated 16 August which required his signature as the Finance Minister was well as that of the Acting Governor State Bank of Pakistan (who has since been replaced by a full-time Governor). The LoI was submitted two weeks prior to the Fund’s Executive Board approval of the tranche release on 29 August and an additional four days before the seventh/eighth review documents were uploaded?
So what was the flood situation on 16 August? The National Disaster Management Authority’s (NDMA’s) daily situation report (covering the period from June when the floods began till 15 August) submitted to the Prime Minister’s Office reported 635 deaths with 196 in Balochistan followed by 141 in Punjab, 137 in Sindh and 122 in Khyber Pakhtunkhwa, more than 900 injured, 50,000 homes damaged or destroyed, an estimated 100,000 livestock lost, 2866.9 kilometer roads effected, 129 bridges destroyed and more than a million acres of crops destroyed. The total numbers affected by the floods on that day was estimated at 1,087,654 people with only 10,464 rescued and 15,205 in relief camps.
These statistics not only indicated the scale of the humanitarian disaster but also suggested that the projected Gross Domestic Product (GDP) for the current year (whether one takes the over optimistic budgeted 5 percent or the more cautious 3.5 percent projected in the Fund documents) would not be achieved which, in turn, would impact on: (i) revenue collections given that 600 billion rupees of the envisaged additional collections this year of 1.4 trillion rupees are premised on 5 percent growth rate; and which would (ii) trigger the contingency plan agreed by Ismail who as per Fund documents has agreed to horrendous conditions on the hapless people of this country in the event that the revenue target is unmet for even one month which includes levy of general sales tax on fuel as a prelude to reaching the standard 17 percent, streamlining GST on sugary drinks (60 billion rupees), withdrawal of other unwarranted exemptions such as those benefitting exporters (already limited to three months instead of the entire year) and levy of additional sales tax on cigarettes.
And in the unlikely event that NDMA did not share the report with Ismail on 16 August surely he was aware that the United States announced disbursement of 100,000 dollars in immediate assistance to support those affected by the severe flooding.
Why has Ismail still not initiated talks on the devastation caused by the floods given that the government declared a national emergency on 26 August? This query is all the more pertinent in the aftermath of the report by United Nations Office for the Coordination of Humanitarian Assistance (OCHA) Humanitarian Advisory Team in collaboration with humanitarian partners covering the period 27 August to 2 September which highlighted the following extremely disturbing facts: (i) number of destroyed homes doubled last week to over 436,000 with Sindh, Balochistan, Khyber Pakhtunkhwa (KPK) provinces most affected; (ii) half of all districts declared calamity hit by the government — 80 districts out of a total of 160; (iii) 1600 kilometers of roads destroyed in KPK alone; (iv) high flood risks remain in parts of the Indus river notably between Taunsa in Punjab and Kotri in Sindh; and (v) humanitarian appeal for 160.3 million dollars to protect 5.2 million flood affected people launched on 30 August has not yet been met.
The Sindh provincial disaster management authority has estimated 2 million acres of cultivated crops wiped out in that province. And the NDMA situation report till 7 September has given the cumulative death total of 1,355, injured 12,722, affected population 33 million out of which the rescued number 177,265 and population in camps are 634,749 or in other words, less than a million people have been reached out of the 33 million affected.
And flood relief assistance is appropriately being distributed under the Benazir Income Support Programme though funds would be diverted from which ever source was available and not from the budgeted amount of 360 billion rupees. The original allocation was 28.39 billion rupees which has been upped by the Prime Minister to 70 billion rupees this week past. From the original allocation of 28.39 billion rupees 20.867 billion rupees has been disbursed with the remaining balance of 7.524 billion rupees. The largest number of recipients were in Sindh receiving 12.311 billion rupees followed by Punjab at 3.545 billion rupees, KPK at 2.583 billion rupees and 2.426 billion rupees in Balochistan.
Former prime minister Imran Khan has through telethons received significant pledges though how many have been realized remains unknown. He appointed Dr Sania Nishtar as the focal point for extending relief assistance and on 2 September she announced that Punjab will launch Ehsaas cash and Ehsaas ration discount programme soon adding that all Punjab institutions including PDMA and district administration were assisting the flood affected people though no further details were shared.
While senior leadership of Pakistan Tehreek-e-Insaf is claiming that the money pledged will be used throughout the country yet details have not yet been provided.
A third source of funds, private charities, engaged in relief and rescue operations have also not shared details of their interventions which are considerable. There is an urgent need for some form of synchronization and a credible tracking mechanism needs to be established to provide a comfort level to all donors — local (government, opposition and private charities) and foreign. This sadly will be a major challenge as there appears to be no rapprochement in spite of the numbers affected and the scale of devastation between the government and the PTI.
The question that begs an answer is why did the Fund ignore this natural disaster of epic proportions, significantly more than during the pandemic, in its seventh/eighth review documents and why does the Fund continue to ignore its impact on the already fragile economy – a silence at odds with other multilaterals as Asian Development Bank has pledged 3 million dollars in assistance and the World Bank announced its decision to divert 300 million dollars from other programmes.
To conclude, one can only hope that Ismail responds to these legitimate concerns instead of focusing on the resumption of the Fund programme as his major achievement to date and the Fund mission to respond to genuine bafflement of the people of this country as to its ominous silence in spite of horrendous images on television screens around the world.
Copyright Business Recorder, 2022