Rehab of IDPs, flood victims: Pakistan to pay 7.5% of donor aid as admin cost

World Bank, which manages Multi-Donor Trust Fund, will charge 7.5% of total commitments as cost of credibility crisis

ISLAMABAD:

Pakistan will pay eight out of every hundred dollars as cost of “credibility” on money that it is lobbying to obtain during an upcoming donor meeting for rehabilitation of population affected by the ongoing Operation Zerb-e-Azb in North Waziristan Agency and in the recent floods.

The government is actively considering channeling the international assistance through the Multi-Donor Trust Fund (MDTF), which is administrated by the World Bank, say officials of Ministry of Finance and Economic Affairs.

The route is being adopted to ensure transparency and address credibility concerns of the international community, they added. However, the WB is charging 7.5% of the total commitments as administration cost, which is too high by all standards, they added.

The MDTF was established in August 2010 to rebuild war-ravaged areas, following the 2009 Malakand Operation. At that time too, international lenders and the donors had refused to give cash to Pakistan due to its weak internal controls and its credibility crisis.

Four years down the line, Pakistan is again facing the same situation where it needs $2 to $2.5 billion for rehabilitation of Internally Displaced Persons (IDPs) from North Waziristan and to compensate its flood-affected population. The officials said that the money is likely to be channeled through the WB-managed fund.

The government has not formally launched an appeal for international assistance but is going to hold a second donor meeting in Islamabad to sensitise representatives of the world aid community about its needs, according to the officials.

They added the government would not seek formal pledges but it will be up to the donors whether the commit any money.

The officials said the purpose of the upcoming donors meeting was to create a permanent vehicle to channel bilateral and multilateral donor contributions in case of unforeseen events, mainly natural disasters.

According to an assessment carried out by the army, at least $1.5 billion would be required for rehabilitation of IDPs and reconstruction of infrastructure. The Fata Secretariat and Ministry of States and Frontier Regions will give presentations to the donors about their needs.

The final assessment of the damages caused by the floods in Punjab, Gilgit Baltistan and Azad Jammu and Kashmir is still ongoing but initial estimates put the rehabilitation cost at over $500 million.

A meeting of the steering committee of the MDTF, which is an oversight body, is going to take place to work out  modalities. The government would seek reduction in administration cost besides seeking improvement in the working of the MDTF, as disbursements remain slow, said the officials.

The steering committee is co-chaired by Economic Affairs Division’s secretary and the World Bank’s country director.  At present there are eleven donors contributing to the MDTF, with the United States as the main donor.

Published in The Express Tribune, November 6^th, 2014.