The international community has ignored Pakistan’s appeal for financial support to help in uplifting its sinking economy, but promised generous aid to assist the government in the rehabilitation of millions of impoverished flood ravaged people. While Pakistani leaders are jubilant over this promise and claiming diplomatic achievement for the country, Pakistan’s woes would not be over unless the country reforms itself.
Even though the international community had procrastinated for over five months to respond to the appeal of the Pakistani government for international assistance to urgently alleviate the sufferings of the people due to the devastating flood in June-October last year, there seems to be no inclination to help fill the foreign exchange kitty of Pakistani economy. But, unexpectedly, the international community agreed to transfer a large amount of US$9 billion for flood relief. The flash flood, which ravaged over 33 million population and one third of the country, has caused a deep scar in the Pakistani society, as the country is already reeling under the impact of a fast deteriorating economic condition, amid continued political turmoil.
However, with the personal help of the UN Secretary-General Antonio Guterres, who organised a donors’ meet in Geneva on January 9, Pakistan has registered windfall gains. Despondent Pakistani leaders were only hoping to be allotted up to US$ 1 billion, but they could get a pledge of 9 times that amount. However, the international community, not to speak of Pakistan’s all-weather friend China and its Islamic brothers in the Gulf, has remained silent over Pakistani leaders’ appeal to save the country from a deep economic crisis.
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Pakistan Going The Sri Lanka Way?
At present, Pakistan is left with only one month worth of imports, i.e. over just US$ 5.6 billion. If Pakistan doesn’t receive any financial support, there are fears the country could go the Sri Lanka way. Already, there are riot-like conditions in many parts of the country, just to buy wheat flour, which has become too expensive for families with meagre means to buy. Added to this, there are fears that Pakistan’s transport system will collapse due to empty petrol stations, as Pakistan wouldn’t have any foreign currency left to import petrol. Pakistan’s ruling elite must be having sleepless nights thinking whether they can save the nation from the kind of chaotic conditions that prevailed in Sri Lanka late last year for a few weeks when the Sri Lankan president had to flee the country.
But the Geneva meet outcome has emboldened the Pakistan government for the time being, as there is a possibility of diversion of flood relief foreign aid towards meeting the import bill of the country. Pakistan’s fast dwindling foreign exchange reserves must be the cause for concern for the Pakistani military establishment also, which should do a soul searching over its anti-India policy, which compels the regime to allocate a major portion of the nation’s general budget on defence forces. The policy of nurturing anti-India terror groups and using these combat soldiers in cross-border terrorist activities requires the diversion of a large amount of financial resources. The world community needs to frankly tell the Pakistani military establishment why it should shed some of its flab to leave the amount for social upliftment or development work.
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Will The $9 Billion Aid For Flood Relief Reach Real Victims?
However, Pakistan’s appeals for six months have helped it see a promise of $9 billion. Pakistan had demanded that the international community must reimburse the damage to their economy that occurred due to the devastating floods last year that rendered millions of people homeless and over 1,700 killed. Pakistan’s demand for reparations from developed industrialised countries was genuine since they have been held accountable for erratic weather worldwide, and the apparent apathy of the West so far towards Pakistan was surprising. However, the one-day meet in Geneva resulted in good contributions from rich nations, including almost $900 million from the US. The Islamic Development Bank pledged $4.2 billion, the World Bank offered $2 billion, Saudi Arabia contributed $1 billion, the EU promised $93 million, Germany $88 million and China $100 million.
At the Geneva donors’ meet, the UN Secretary-General said: “People in South Asia are 15 times more likely to die from climate impacts than elsewhere. My heart broke when I saw first-hand the devastation from Pakistan’s floods, a prime example of the impact of climate change.” Attending the conference, PM Shahbaz Sharif said: “We are racing against time as harsh winter is approaching.”
As the Sharif government is claiming credit for this diplomatic success of obtaining the huge promise of $9 billion, there are jubilations in Pakistan. But there are concerns and anxiety also within Pakistan and among international agencies, who are worried if this fund will be actually utilised for full rehabilitation of the 33 million impoverished people who have lost their shelter and livelihood.
It is common news that there is rampant corruption and fraud in the Pakistani security and political establishment. There are concerns that most of the aid amount would be diverted to meet the expenses of the Pakistani government and the import bill, if not anything else. Also, there are fears that since some of the flood-affected areas were parts of the rebellious Baluch region and tribal areas, Pakistan would not care much for them and divert the allotted fund for other governmental requirements.
Also, it’s just $9 billion. Pakistan’s economic and political crises will not evaporate with this. The international community, including Pakistan’s best friends China and Saudi Arabia, are not willing to continue sending aid for an indefinite period. Ultimately, Pakistan would have to think of domestic measures that can generate enough revenue for the nation so Pakistan no longer remains dependent on foreign aid, which the country had been receiving till now in the name of fighting terrorism.
For Pakistan to better its economy, a conducive atmosphere needs to be created to promote not only domestic investment but also attract international investors. Pakistan also needs to improve its relations with neighbours, who can be a good source of all the imports and exports, thus making its economy competitive enough. A policy of good neighbourliness will not only reduce its demand for financial resources, but also save huge foreign exchange, which is now being utilised for acquisition and maintenance of modern weapon systems.
The author is a senior journalist and strategic affairs analyst.
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