No need to wait for the donors
The existing federal and provincial budgets can be restructured to make a jump start, and the donors will follow.
Rescue, relief, rehabilitation and reconstruction are the four Rs involved in any disaster. And to be effective, they require institutions and money. A serious institutional failure is being witnessed in the sluggish response to rescue and immediate relief. A new, non-political institution has been proposed for other medium-term operations. The rationale is said to be the mounting image and trust deficit standing in the way of donations, not only from abroad but also locally. While the proposal has been made with good intentions, it undermines the justification for an elected government to govern.
What is needed is the assessment of the damage, a plan and a mobilisation of resources. Some initial assessments are already there — Rs180 billion by Khyber-Pakhtunkhwa, Rs80 billion by Punjab and Rs68 billion by Azad Jammu and Kashmir. Balochistan and Gilgit-Baltistan have not yet made the effort and for Sindh it is a bit early. The federal government, with the assistance of the World Bank, will soon be engaging in a formal and more technical assessment based on information provided by the provinces. On face value, provincial demands so far add up to Rs328 billion. When the remaining demands are available, the total damage is likely to be around Rs860 billion (around $10 billion). The plan has to mainly consist of replacing the damaged infrastructure and compensation to rebuild lives and livelihoods.
The last point must be given top priority. As the waters recede, people will start moving back to their abandoned abodes and will need to be compensated promptly. Here, there are lessons to be learnt from the experience of the October 2005 earthquake. Given the affected population of 20 million, some 3.3 million families are to be catered for. The family heads, male or female, with names in the Nadra database, should be allowed a lump sum of Rs100,000 each, no questions asked. The amount should be disbursed through electronic cards, like with the Swat IDPs. No grand designs of rebuilding entire towns or villages should be entertained. The job of the government is to provide help; the people know best how to rebuild. This operation can cost around Rs400 billion. Another Rs400 billion would be required for repairing the damage to infrastructure, leaving Rs60 billion for subsidies on fertiliser, seeds, etc.
There is no need to wait for donors. The existing federal and provincial budgets can be restructured and re-prioritised to make a jump start, and the donors will follow. To begin with the expenditures in the federal budget, there is fat even in the public sector development programme. It would be unwise to apply an across-the-board cut. But the following is doable. First, the Peoples Works Programme I and II are, respectively, the discretionary funds allocated to parliamentarians and the prime minister. Thirty billion rupees allocated here can easily be diverted. Second, all new schemes should be deferred to next year and the Rs31 billion allocation saved. Third, the ongoing schemes should be examined on a case-by-case basis to cough up another Rs39 billion. Fourth, there is no need for “other development expenditure” of Rs123 billion during an emergency. This includes large transfers such as the Benazir Income Support Programme. Fifth, the provinces should follow the same principles to reduce development expenditure. Finally, the largest addition to the current budgets of the provinces and the federation, the 50 per cent jump in salaries, should be rescinded this year and allowed at the rate of 25 per cent from the next year. On the whole, these expenditure cuts may yield around Rs400 billion.
New taxation and foreign assistance will have to make up the rest. A flood surcharge on incomes, imports and domestic sales, and in the case of provinces on property, vehicles and registrations will be in order.
Published in The Express Tribune, August 20th, 2010.
What is needed is the assessment of the damage, a plan and a mobilisation of resources. Some initial assessments are already there — Rs180 billion by Khyber-Pakhtunkhwa, Rs80 billion by Punjab and Rs68 billion by Azad Jammu and Kashmir. Balochistan and Gilgit-Baltistan have not yet made the effort and for Sindh it is a bit early. The federal government, with the assistance of the World Bank, will soon be engaging in a formal and more technical assessment based on information provided by the provinces. On face value, provincial demands so far add up to Rs328 billion. When the remaining demands are available, the total damage is likely to be around Rs860 billion (around $10 billion). The plan has to mainly consist of replacing the damaged infrastructure and compensation to rebuild lives and livelihoods.
The last point must be given top priority. As the waters recede, people will start moving back to their abandoned abodes and will need to be compensated promptly. Here, there are lessons to be learnt from the experience of the October 2005 earthquake. Given the affected population of 20 million, some 3.3 million families are to be catered for. The family heads, male or female, with names in the Nadra database, should be allowed a lump sum of Rs100,000 each, no questions asked. The amount should be disbursed through electronic cards, like with the Swat IDPs. No grand designs of rebuilding entire towns or villages should be entertained. The job of the government is to provide help; the people know best how to rebuild. This operation can cost around Rs400 billion. Another Rs400 billion would be required for repairing the damage to infrastructure, leaving Rs60 billion for subsidies on fertiliser, seeds, etc.
There is no need to wait for donors. The existing federal and provincial budgets can be restructured and re-prioritised to make a jump start, and the donors will follow. To begin with the expenditures in the federal budget, there is fat even in the public sector development programme. It would be unwise to apply an across-the-board cut. But the following is doable. First, the Peoples Works Programme I and II are, respectively, the discretionary funds allocated to parliamentarians and the prime minister. Thirty billion rupees allocated here can easily be diverted. Second, all new schemes should be deferred to next year and the Rs31 billion allocation saved. Third, the ongoing schemes should be examined on a case-by-case basis to cough up another Rs39 billion. Fourth, there is no need for “other development expenditure” of Rs123 billion during an emergency. This includes large transfers such as the Benazir Income Support Programme. Fifth, the provinces should follow the same principles to reduce development expenditure. Finally, the largest addition to the current budgets of the provinces and the federation, the 50 per cent jump in salaries, should be rescinded this year and allowed at the rate of 25 per cent from the next year. On the whole, these expenditure cuts may yield around Rs400 billion.
New taxation and foreign assistance will have to make up the rest. A flood surcharge on incomes, imports and domestic sales, and in the case of provinces on property, vehicles and registrations will be in order.
Published in The Express Tribune, August 20th, 2010.