$8b hole in relief target

International donors have only provided half of the $16.3 billion Pakistan estimates would be needed for flood relief

International donors have only been able to provide half of the $16.3 billion that Pakistan estimates would be needed for its flood relief “resilient, recovery, rehabilitation and reconstruction framework” which the government is calling 4RF. It is unlikely that there will be any sudden windfall that helps fill this massive gap, since the response to the UN’s $816 million emergency fund was also poor, and several potential donors have quietly expressed concern over Pakistan’s economic dithering.

This is also despite the fact that 4RF has been developed with the help of several international financial institutions and government bodies, including the Asian Development Bank, European Union, UN Development Programme, and World Bank Group. Also concerning is that several analysts have pinned offsetting the economic impact of the floods on high public spending on relief, recovery and rehabilitation to jumpstart stalled segments of the economy. Given the country’s cash crunch and other economic woes, this would be impossible with outside intervention, which has not come.

Meanwhile, the negative economic outlook means that other investments and loans will also be harder to come by, and some suggested government-level interventions actually involve revenue-reducing measures. This, in turn, translates into a repeating cycle where we can’t make money unless we have some money to begin with.

Ahead of the January 9 donor conference, the government has estimated that it will be able to cover almost $5 billion of the $16.3 billion target on its own, while about $814 million will be coming in from community support organisations and another $2.5 billion through public-private partnerships. Depending on the release schedule, this may not even cover the first year of estimated expenses under the plan — about $6.8 billion. Even the government’s contribution is predicated on the efficient reallocation of resources, something that history has shown is unlikely to happen.

Published in The Express Tribune, December 23^rd, 2022.

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