Re: US$5.9BLN Pledged in Donors Conference
This article provides an interesting breakdown of the aid provided..it is interesting how the initial impression of the money was and the reality:
VIEW: The donors’ conference illusion —S Imam
The total reconstruction cost, estimated by the Pakistan Planning Commission, stood at $10-12 billion. But the World Bank and the Asian Development Bank estimates ranged between three to four billion dollars. The huge variation in the estimates clearly indicates that none of the figures was based on a firm calculation of reconstruction costs
The November 19 conference in Islamabad was an exercise in duping the people of Pakistan in which the government of Pakistan was joined by some international ‘donors’. Most of the ‘donations’ were in fact offers for loans — no entrepreneur would miss the opportunity of doing business.
Some of the pledges were indeed grants but most were loans for which the interest rates have yet to been negotiated for determining Pakistan’s future financial burden.
The conference is being described as a great success but the success is a mere illusion, even in terms of securing loans. The tentative estimates of reconstruction costs, besides rehabilitation expenditure, calculated by independent Pakistani engineers came to over seven billion dollars for roads and public buildings only. The total reconstruction cost, estimated by the Pakistan Planning Commission, stood at $10-12 billion. But the World Bank and the Asian Development Bank estimates ranged between three to four billion dollars.
The huge variation in the estimates clearly indicates that none of the figures was based on a firm calculation of reconstruction costs, leave alone construction according to earthquake-resistant criteria.
But why did the government of Pakistan not agree to the estimates of independent engineers and its own planning agency? The people of Pakistan in general, and those affected by the earthquake in particular, may be forgiven for not understanding why the Pakistan government chose to go by the donors’ estimate of our needs — around $3.2 billion.
And how did the ‘donors’ arrive at this figure of $3.2 billion. Since the disaster has caused sweeping destruction involving all physical, structural and social sectors, the sector-wise breakdown of costs, which normally forms the basis of their estimates, has not been assessed.
Apparently the donor community and the government of Pakistan both wanted to paint a win-win picture. But a win-win picture for them did not take into account the needs of the people for whom they intend to launch the reconstruction project.
The major points scored by the government of Pakistan in agreeing to the meagre figure for reconstruction and rehabilitation are probably the following:
(1) Pakistan conveniently secured what it was offered/wanted;
(2) It would be under no pressure whatsoever now, to reduce its defence spending or cancel the F-16 or AEWACS aircraft deals;
(3) The domestic opposition has been silenced by proclaiming ‘success’.
At the end of the day, the possible benefits likely to accrue to the ‘donors’ against their financial and physical endeavours to mitigate the miseries of the disaster area may be as follows:
(1) The World Bank, ADB and the Islamic Development Bank will make profits on loans ‘donated’ by them;
(2) The ‘donors’ will be crowned with the additional feather of great service to humanity.
**The aid agency, Oxfam, has raised the point that the pledges made on November 19 will create another mountain of debt. In its immediate reaction, after the announcement of $5.8 billion ‘donations’ by Prime Minister Shaukat Aziz it said, “Oxfam is disappointed that most of the money in the new pledges is in the form of loans instead of grants.”
Oxfam has expressed its fear that these “Pledges will prove to be short-term solutions for long-term needs”. Jane Cocking, Oxfam Humanitarian Coordinator in Pakistan, said, “the international community risks heaping even more misery on survivors by increasing the debt burden of Pakistan through these reconstruction loans.”**
She also said “It will be the poorest who will be the most affected by this. Donors must work harder to help them climb the huge mountain of challenges they face to rebuild their lives and livelihoods”.
Oxfam’s comments are an eye-opener and warrant serious consideration by the donor community as well as the government of Pakistan with a view to taking appropriate measures. These measures require debate in workshops, seminars and conferences.
Pakistan and its federating units lie in disaster-prone regions. Hence it is imperative for the national government to deal with the relief operations, rehabilitation and reconstruction activities through its provincial and national assemblies and senate, which is the basic requirement of a democratic government.
A national consensus on the estimates of the rehabilitation and reconstruction costs of the quake-affected areas could have strengthened the government in dealing with the donor community and facilitated procurement of an appropriate amount to achieve the desired results in quality and quantity.
Apart from the foregoing, one must acknowledge the dedicated work for the quake affected people rendered by Islamic countries, international agencies such as Red Cross, Islamic Relief, UK Rapid, NGOs, charity institutions and individual philanthropists. They gave a mix of grants and non-returnable relief goods to quake affected areas in various forms, kinds, cash and services.
S Imam is London-based journalist from Pakistan
