Thanks but no thanks, says Pakistan

Donors sought too much discretion in projects, wanted to divert money from existing programmes.

ISLAMABAD: Pakistan has said ‘thank you’ to the international community after the latter refused to budge from its demand for sweeping powers in awarding contracts and in monitoring and evaluating reconstruction projects.

“We have conveyed to the donors that Pakistan will do the reconstruction itself… as we cannot outsource monitoring and evaluation,” said Hina Rabbani Khar, the Minister of State for Finance and Economic Affairs.

Khar, who was also holding the same portfolio under former president Pervez Musharraf, announced that Pakistan would only accept additional aid from donors and that too should not be linked to any monitoring or evaluation conditions.

“If donors want to help Pakistan in reconstruction then they can give additional loans, as Pakistan will not encourage the reprioritisation of the existing loan portfolio,” said Khar.

The Asian Development Bank (ADB) earlier announced that it would give $2 billion for reconstruction out of which $1.5 billion will be diverted from ongoing or upcoming projects. The World Bank (WB) also announced a package of $997.5 million but $325 million was being withdrawn from the existing loan portfolio. The United States too had hinted at diverting a portion of the Kerry-Lugar portfolio for reconstruction.

Sources said that the ADB’s insistence on appointing a management consultant endowed with powers of awarding contracts, monitoring and evaluation and the negative effects of diverting money from ongoing or candidate projects led to this unusual development. However, Khar denied that the ADB’s condition was the reason behind rejecting the assistance offer.

“If they do not want to give additional money, that is it, thank you,” said Khar. Floods have submerged one-eighth of the country and affected one-tenth of the population, causing a loss of $9.7 billion, according to a joint survey of the WB and the ADB.

The Friends of Democratic Pakistan, an umbrella organisation of all donors, also gave Islamabad the cold shoulder in its last meeting in Brussels, Belgium. A joint communiqué asked Pakistan to mobilise domestic resources instead.

Khar said that, according to estimates, reconstruction would cost $6-9 billion (Rs516-774 billion) and that the government would meet this by reprioritising public sector development spending and adjusting the next budget instead of relying on donors.

Cash grants of Rs100,000 per family for affected families will cost $3 billion (Rs258 billion) and the country was ready to receive help from donors only on this account, she added.

She said that acting mechanisms given by donors will cause delays in the completion of projects and the government will bear the extra cost of consultancies that runs into millions of dollars for every donor. There are 26 donors working with Pakistan currently.

She said that Pakistan will only receive flood-related aid from the world for rescue, relief and early recovery and it has decided that it will primarily rely on domestic resources for reconstruction.

“Pakistan has decided to go through the normal channel for reconstruction and we will make our system stronger,” said Khar, while hinting at accepting only those loans from the WB and the ADB which have already been committed to various projects and have nothing to do with flood-related projects.

Pakistan has established a Flood Reconstruction Unit in the Planning Commission that will be responsible for presenting the proposal for these projects, their monitoring and their evaluation.

She said that in order to ensure the swift implementation of these projects, the three-tier approval procedure has been reduced to a single tier. About a year ago, the ADB had recommended the overhaul of the existing project approval mechanism to ensure quick implementation.

“Pakistan deserves to be helped out in an unusual manner keeping in mind the sacrifices it rendered in the war on terror,” she added.

The minister announced that the meeting of the Pakistan Development Forum (PDF) will be held on November 14 in Islamabad. The PDF last met in 2007.

She said that this time donors will be represented at the level of ministers. She added that this time the provinces will also be invited so that they can explain their social sector needs to the international community since provinces are responsible for their social sectors after the 18th amendment.

Published in The Express Tribune, October 22^nd, 2010.