Financing reconstruction: Where is all the money?

Prime minister’s flood relief fund remains unused; UNDP unable to achieve many goals because of a lack of funding.

ISLAMABAD:

Nearly a year after the worst floods in 64 years inundated a fifth of Pakistan’s landmass and affected 20 million people, confusion abounds on the amount of aid that was actually received by the country, with the government and the United Nations offering sharply differing statistics – the UN claiming that a far higher figure has been spent than the government.

According to the data compiled by the economic affairs division of the finance ministry, the international community has disbursed only $661 million out of their total commitments of over $3 billion (Rs258 billion). Meanwhile, the Office for the Coordination for Humanitarian Affairs (OCHA) at the UN claims that pledges totalled $2.6 billion, of which 85% or $2.2 billion have already been released.

Immediately after the floods, the UN had made a flash appeal for $1.9 billion in aid to Pakistan.  Of the total pledges, $696 million or 22.8% was supposed to be disbursed to the government, and the remaining through the UN and its allied agencies.

The government of Pakistan had faced a tremendous credibility problem, with many donors unwilling to disburse aid through the government, choosing instead to disburse money through the UN and non-governmental organisations. The differences between what the government claims it has received and what the UN says has been disbursed are largely due to the fact that the government only counts the money it receives directly, whereas the UN counts money spent by aid agencies as well.

A finance ministry official said that Pakistan did not have a mechanism to determine how much money has been released through the UN system and where it was spent. In a recent meeting with the United Nations Development Programme (UNDP), the government asked for details of UN claims on how much money they have spent on aid. Government officials say the UN has yet to submit a reply.

Yet despite claiming to have received a much higher amount of donations than the government can account for, UNDP officials admit that they have not been able to achieve many of their goals because of a lack of funding.

“The early recovery phase, which ended on January 31, could not meet all targets as there was a funding gap of $571 million,” said Mehreen Saeed, a spokesperson for the UNDP.

Government officials also criticise the UN and international donor agencies for spending much of the aid money received on “administrative costs” that often include stays at expensive hotels for expatriate staff members as well as other amenities. A recent survey by Rozee.pk and YouGov suggests that working for foreign-funded NGOs is one of the highest paid professions in Pakistan, on par with the oil and gas sector.

Meanwhile, the government’s attempts to placate fears of corruption in aid disbursement do not seem to be going well as the body created to oversee the effort has been hobbled by legal challenges to its existence and high-profile defections from its management.

After the flood, Prime Minister Yousaf Raza Gilani created the National Oversight Disaster Management Council. Yet the body has remained ineffective since its existence does not have legal cover, according to one council member. The NOMDC was created through a government notification, rather than through legislation.

“How could a body ensure transparent use of money when it is itself not sure about its legal status,” said one council member who wished to remain anonymous because the NOMDC is not authorised to speak publicly about their work. He said that one member of the council – Sardar Mohammad Raza Khan, a retired judge from Khyber-Pakhtunkhwa – quit the NOMDC for this very reason.

In addition, government officials seem unwilling to comment on how the Rs6.8 billion collected through the Prime Minister’s Flood Relief Fund has been, or will be, spent.



Published in The Express Tribune, July 14^th, 2011.