The 2022 floods in Pakistan have been the most devastating in living memory. This is reflected in these grim numbers from the World Bank. GDP fell by around 2.2%, 8 million people were displaced, 9 million were pushed below the poverty line, 33 million were affected, and 1730 died, resulting in a $14.9 billion direct loss and a $15.2 billion economic loss. Scary to say the least! Add to this the upheaval in the economy concerning inflation and the cost of living, and it is no wonder Pakistan has had to reach out to the international community for support. The recently concluded cycle of donor conferences has been rumoured to have resulted in around $10 billion in aid for Pakistan. The question is, “What next?” Celebrations? Think again!
The adage “there is no free lunch” comes to mind, and the problem is exacerbated when it comes to donor pledges towards other nations. The recipient government can go hoarse from shouting “show me the money,” but there are four significant reasons why the money may not be forthcoming. One – a high percentage of pledges just fail to materialise. In 2013, a donor conference for the plight of Syrian refugees resulted in $1.5 billion in promises. Though in the aftermath of the escalation of a humanitarian tragedy in the country, only 30% was fulfilled when needed the most! Similarly, the 2014 donor conference on Gaza failed to convert a large majority of pledges into actual donations. Two: even if pledges translate into monetary support, it takes a long time to materialize and help the intended recipients. It was estimated that money for Gaza refugees-even if it had materialized-would have taken the better part of a decade to get to the people it planned to help! Three: different types of pledges can mean that most of it may not be charity after all! In the case of the recent donor conference for Pakistani flood rehabilitation, none other than Ishaq Dar suggested that almost 90% of pledges are project loans. This is almost $8.7 billion, a substantial sum! The terms of these loans can make them even more unappetizing, though the government has claimed otherwise, with the Prime Minister saying that “we expect the terms to be lenient.” Four: Donors have trust issues with the recipient nation’s track record of accounting for support funds. This is a real kicker! It is a foregone conclusion that the sordid tales of corruption and embezzlement in the country don’t generate much faith in the distribution mechanism. As a result, the Finance Minister was forced to say, “The faster we can design, create feasibility, and impress them [donors], the faster these pledges will materialize.” One wonders how the donors can be impressed if they have also seen the news about the mishandling of the economy to the point of imminent default!
In 2005, international donors provided $3.5 billion to reconstruct vast areas of Azad Kashmir and KPK after a severe earthquake killed 80,000 people and left 4 million homeless. Even five to ten years after the earthquake, reconstruction directors were complaining that budgets were cut and money was diverted to other government projects.
It is not only the recipient governments but the end victims who also scream, “Show me the money!” In 2005, international donors provided $3.5 billion to reconstruct vast areas of Azad Kashmir and KPK after a severe earthquake killed 80,000 people and left 4 million homeless. Even five to ten years after the earthquake, reconstruction directors were complaining that budgets were cut and money was diverted to other government projects. They were told, “when we have the money, we will pay you. “All the money was given by Western governments but we have so many other problems.” The net result was that not much of the available amount was seen by the victims in any form! In the words of one, “They told us they could build three new Balakots, but we’re still waiting for one”. As a result of the devastating earthquakes in Haiti in 2010, the Red Cross collected around $500M in donations. Five years later, the Haitians were still waiting for that money to trickle down to them! The Red Cross said that it split the money for emergency relief, providing shelter, water & sanitation efforts, and infrastructure work. Though they presented a breakdown in the form of a pie chart but wouldn’t go any further. The charity’s documents, however, provided more clarification: much of the money never reached the people in need! This was because Red Cross, after taking its administrative cut, gave much of the money to other third-party groups to do work on the ground, resulting in additional charges! Consequently, this robs the end recipients of their rightful share.
Under the guise of “Research in Public Policy, the Centre for Market and Public Organisation at the University of Bristol” conducted a study titled “Pledges and Publicity: An Experiment in Civic Behavior.” Its results suggest that a combination of a pledge campaign with transparent publicity for donors and donations meaningfully increased donations. The policy implications for the government of Pakistan are plentiful. First, carry out consistent updates and listings of donors and donations post the donor conference. Second, enumerate the parties being tasked with specific work in particularly affected areas. Third, use technology and social media for continuous updates on projects and workstreams. Fourth, appreciate donors and enterprises who make the humanitarian effort a success. It seems like a tall order, especially considering the track record of all previous governments! However, there is always a beginning to be made and there is no reason the current dispensation can’t do so now, or else the clamour to “show me the money” will keep on ringing for more time to come!
The writer is Director Programmes for an international ICT organization based in the UK and writes on corporate strategy, socio-economic and geopolitical issues.