ISLAMABAD: International donors have provided Pakistan with $2.8 billion out of the $11 billion pledged at the Geneva Conference in January 2023 to help it recover its losses due to the 2022 flood disaster. But it has only spent half of the amount disbursed on the flood-affected communities, with the rest being used on budgetary support.
During the fourth meeting of the International Partners Support Group (IPSG) held this week, Economic Affairs Minister Ahad Khan Cheema stated that disbursements had reached 2.8 billion by April 2024. Out of this, approximately $1.35 billion was not flood recovery related, but rather was used to finance oil and general budgetary requirements.
The Ministry of Economic Affairs continued to report that the level of disbursement was a significant achievement, with 20 percent of the pledged support to various projects being released. The commitments at Geneva, after the UN-led Post-Disaster Needs Assessment, which estimated the damage caused by the floods at 16.3 billion, were mostly previous financing pipelines and not new aid.
The Islamic Development Bank pledged $4.2 billion but has disbursed only $265 million, of which $65 million was on projects and $200 million on oil. The World Bank was the most responsive donor, disbursing almost 1.1 billion out of its 2 billion pledge. The World Bank has also been commended for putting in place transparent housing reconstruction programs in Sindh and Balochistan, the most affected provinces.
The Asian Development Bank has promised to provide 500 million dollars, of which only 98 million has been disbursed. The Asian Infrastructure Investment Bank has pledged to provide 1 billion dollars but has only released 250 million dollars so far, most of which is in the form of budgetary support. The Saudi Fund for Development also contributed 1 billion, most of which was in the form of oil financing.
Western donors have been less generous, with the European Union and the Paris Club releasing 65 million dollars, and the United States providing 61 million dollars in grants.
Foreign inflows into Pakistan are not picking up despite the support of the International Monetary Fund because of poor macroeconomic indicators. The government is now aiming at an external financing of 6.1 billion in the coming financial year, but only 5.4 billion is currently in the pipeline.
The IPSG meeting was attended by representatives of bilateral and multilateral agencies, including ambassadors and diplomats of more than 20 countries, including Germany, the US, China, the UK, and Japan, and officials of key institutions, including the UNDP, World Bank, IMF, ADB, IsDB, and USAID.
Despite the limited actual spending to reach flood survivors and the long delays in spending, there are concerns over the speed and priorities of the flood recovery in Pakistan nearly two years after the disaster.
