As Pakistan is busy calculating its flood losses and expected international aid, a wide gap has emerged between the losses on the ground and the expected assistance from the international players. It is learned Pakistan expects about $13 billion from international donor agencies and lending partners to finance nearly 80% of the Resilient Recovery and Reconstruction Framework (3RF) over the next three years, while Pakistan suffered losses of up to $40 billion, which it will need in the coming 10 years to rebuild the infrastructure. As per the post-disaster needs identified by international aid and UN agencies, Islamabad needs $10 billion, $7.9 billion for Sindh and $2.2 billion for Balochistan, but in the long term, it will need roughly $40 billion over the next 10 years. Long-term arrangements would need to be made for this using a combination of international financing, reallocating funds allocated for current public sector development programmes, and public-private partnerships.
Pakistan is pinning hopes on the recently announced international fund from climate justice after the international community declared at the end of the COP27 climate summit in Egypt that a fund would be established to aid nations in addressing the effects of climate change. Right now, the government is in the process of the rehabilitation process as the winter is around, and for this, a total of $18 billion has been estimated, of which $2.76 billion will go toward social infrastructure, $1.1 billion health and education, $800 million physical infrastructure, $5 billion transportation and infrastructure, and $4 billion toward agriculture and livestock. Additionally, $1.6 billion is earmarked for livelihood and social protection.
Pakistan is already dependent on the financing plan of the International Monetary Fund and it is expected financing arrangements from the IMF would be finalized in the coming days, and for the current fiscal year, the IMF had requested quarterly budget estimates for flood rehabilitation. Other than the IMF, the World Bank, the Asian Development Bank, the United Nations Development Program, and the European Union have also joined the aid programme and recently conducted the Post-Disaster Needs Assessment. They estimated the flood damage and loss at over $30 billion. If aid does not trickle in on time, it is feared that Pakistan may need years to come out of rising poverty rates, widening fiscal and external account deficits, and unrest in the political and economic spheres. Based on these projections, Pakistan demanded a relaxation of the IMF’s requirements and funding for recovery and climate adaptation efforts under the banner of “climate justice.” To ensure that the macroeconomic policy goals outlined in its $7 billion programme are met, the Fund has now requested that the authorities make such allocations as part of the current year’s budget. Time is running out for Pakistan and the international community.