WB agrees to fresh funds for cash grants

Pakistan had earlier rejected propositions to channel funds from other projects.

ISLAMABAD: The World Bank (WB) has agreed to provide Pakistan funds for cash grants for reconstruction and rehabilitation in areas affected by floods.

A WB delegation, headed by Mansoora Rasheed, a senior human resource economist, has arrived in Pakistan to discuss the release of such funds.

The WB has also agreed to provide $150 million in aid for areas affected by the war on terrorism. A summary for the provision of these $150 million will be presented for approval to the WB board next week.

According to a senior official of the ministry of finance, Pakistan refused the WB’s and the Asian Development Bank’s (ADB’s) proposal to divert funds from slow-moving projects financed by the WB to finance reconstruction and rehabilitation in areas affected by floods. Pakistan had made it clear that fresh funds should be provided for relief efforts and funds originally allocated towards other projects should not be diverted away. Earlier, the WB and ADB package worth $3 billion also included a siphoning of funds from existing development projects to reconstruction and rehabilitation efforts.

Sources said that the WB had earlier earmarked a billion dollars for reconstruction and rehabilitation efforts. The WB’s review mission will hold talks with Pakistani officials to figure out when to provide funds for the distribution of cash grants, said sources adding that it will also be decided whether the grants will be provided using individual cash grants of Rs20,000 each or family grants of Rs100,000 each. The latter is a part of the government’s package of Rs168 billion.

The two donor bodies had earlier proposed a memorandum of understanding that the country hires the services of an international management consultancy firm. Pakistan rejected the proposal and emphasized the need for fresh funds for flood victims. The country had said that the donor bodies may provide funds for the distribution of cash grants using the Watan card programme and reconstruction and rehabilitation efforts may be financed from the country’s internal resources and other external aid.

Sources indicate that the Watan card programme is seen as transparent by the international community since it operates through the National Database Registration Authority and the banking system.

Published in The Express Tribune, November 4^th, 2010.