ISLAMABAD, Nov 9: The international donor community wants transparency in utilization of earthquake-related assistance, a sizable cut in current expenditure and an assessment whether the quake has left any adverse impact on federal budget.
Informed sources told Dawn on Wednesday that some multilateral creditors had also asked Islamabad to consider requesting the Paris Club to forgive a reasonable part of Pakistan’s over $10 billion bilateral credit.
The donors have asked the government to reprioritize its budgetary allocations for the next five years by “realistically looking” at the defence budget, money injections into Wapda or other loss-making ventures and some austerity measures.
These issues were raised by donors during meetings with the federal government as part of the preparation of the damage assessment report. The donors agreed to a suggestion by the government that the span of reconstruction should be frontloaded so that major rebuilding and rehabilitation work could largely be finished in three years.
A statement issued by the finance ministry on Wednesday quoted adviser to prime minister on finance Dr Salman Shah as having informed the donors that such reconstruction would depend upon the commitments to be made at the donors’ conference on Nov 19.
Dr Shah, who presided over one of the meetings, also suggested that the damage assessment report to be presented before the Nov 19 conference should clearly spell the impact of the disaster and include cost of relief, rehabilitation and reconstruction. The report would be finalized on Thursday.
The sources, however, pointed out that a final position of international commitments, overall damage assessment and the reconstruction/rehabilitation cost would become clear by mid December and the reconstruction would start early next year.
Another issue on which the donors’ community wants a clear position is the fashion in which the government wants to utilize the reconstruction-related donations and assistance.
They believe that if these finances are routed through the normal budgetary process and auditor-general of Pakistan, the funds will take more than a year to reach where these are to be utilized.
At the same time, donors realize that if these funds are utilized through a parallel system outside the budget, it might lack transparency and accountability and the implementing authorities could misuse these funds. Hence, they emphasize the need for a clear and fool-proof system.
Similarly, the international community is unclear as to how the government wants to provide the Rs20 billion President Gen Pervez Musharraf has announced for reconstruction.
They believe that the President’s Relief Fund (PRF) has so far received about Rs7-8 billion and the government may have to substantially impact the next budget as well as the Khushal Pakistan Programme to meet the requirement. A $400 million new debt from the World Bank will also have an impact on the next year’s budgetary position.
