Spending $10 billion

Published January 12, 2023
The writer is an expert on climate change and development.
The writer is an expert on climate change and development.

THE world’s first donor conference in Geneva, convened specifically to support the victims of climate-induced disaster, has pledged more than $10 billion for Pakistan. This offers Pakistan a rare opportunity to shed its image of a passive recipient of climate disasters. Instead of being a victim only, the country can now undertake a series of well-deliberated, long-term measures for strengthening the resilience of its people and infrastructure.

The strategic vision shared by the Pakistani leadership with the international community at the conference was that Pakistan will pursue social inclusion and participation as a strategic objective. How can Pakistan honour this commitment, or spend the $10bn put on the table? This is as good a time as any to initiate reforms to reduce climate vulnerability, consolidate these partnerships, and build back stronger and faster.

Resilient development is not possible without institutional reforms. The urgency is staring us in the face with a current price tag of eight per cent GDP loss and projected GDP shrinking 20pc by 2050. In fact, resilience, reforms and economic development have become intrinsically linked. Pakistan’s existing political and economic systems breed climate vulnerability, made worse by food and water insecurity, degraded land and polluted air. The proposition is relatively straightforward: higher degree of preparedness can help us avoid public and private losses from climate-induced disasters. Resources saved can be invested on climate-smart development.

But no matter how important, reforms are always driven by local politics. They are particularly hard to undertake in a traditional society. Provinces and regions in our federal system are governed by different political parties who jealously guard their autonomy. Pursuing a reform agenda is particularly challenging in the present political context where consensus-building in a coalition government can be risky and time-consuming. The first order of business is to build political consensus that reforms for climate security are essential and cannot be postponed any longer. Fortunately, most of the essential institutional, legal and economic reforms are part of the unfinished agenda of the 18th Amendment that enjoys national consensus, except for occasional dissension by some interest groups.

Not all international pledges will be delivered this month or during this fiscal year, even if many are recounted, recycled and repurposed existing commitments. Yet, Pakistan is notorious for delayed implementation of its public sector projects. Unfinished projects have accumulated over time to an unbelievable number — more than 1,200 projects worth Rs1.6 trillion.

Top-down investments cannot succeed without strengthening the coping capacity of local communities.

This is many times higher than the size of the annual Public Sector Development Programme. Given the long list of already approved projects by PSDP, the Planning Commission and ECNEC and their provincial counterparts can obligate the pledged amounts in a matter of weeks, if not days. But then, like hundreds of earlier projects, these will not be finished in a timely manner, efficiently and impactfully. Inordinate delays in implementation not only mean cost overruns, but delays also obstruct accountability and cast shadows on transparency.

The project delivery system is already stretched to the seams. Going forward, it is imperative for us to take a fresh look at how best we can spend development funds. The risk is that unspent funds will be repurposed yet again, as has become frequent practice in the country in recent years. The underspend of allocated budgets is, more often than not, a sign of mismanagement and incompetence. Public sector projects often have over-allocation to give headroom to senior officials and project managers for other urgencies.

This is the right time for Pakistan to learn from two recent experiences. First, after the 2005 earthquake, a similar Conference on Rehabilita­tion and Reconstruction of the areas affected resulted in pledges of $3.5bn. Likewise, a meeting of Friends of Pakistan co-convened in 2008 by the World Bank and Japan, resulted in commitments of $5.8bn for development and counterterrorism. In both cases, Pakistan could not fully avail the pledges, and there is still no report on the reasons why such opportunities were allowed to slip by.

Some operational lessons from recent experiences in different provinces under various projects can guide us. The delivery speed was appreciably high under the early harvest projects during the first phase of CPEC. Can this experience be repeated? Likewise, in some important projects, the federal and provincial governments successfully set up Special Purpose Vehicles or SPVs, instead of struggling with existing institutions. Also, in some recent instances, the planning boards in various provinces have effectively delivered larger projects through Special Projects Units or SPUs.

The biggest risk to our infrastructure, however, comes from archaic building guidelines, standards and associated laws, and procurement rules and procedures. Had Pakistan aligned her construction standards with internationally accepted standards, we would have saved ourselves a very high percentage of the infrastructural losses. The country desperately needs to upgrade its construction standards, materials, technologies, and app­r­oval processes — and this needs to be fast-tracked by creating more operational and policy space for the private sector to lead in infrastructural development.

Finally, while we will need to address several practical questions relating to implementation capacity at the federal and provincial levels, undertaking two fundamental reforms will test our national resolve and commitment:

First, we need to remember that climate vulnerability is fundamentally a local issue, and without strengthening the coping capacity of local communities no amount of top-down investments can succeed. Fortunately, there is a growing realisation that local governments need to be operationalised, resourced and empowered for locally-led development. A specially constituted taskforce can recommend how the National Finance Commission Award can be restructured to have provincial- and district-level financial awards.

Second, none of Pakistan’s project planning, procurement, project delivery and project closure documents are climate-proofed. They do not capture our climate risks and vulnerabilities nor measures towards adaptation and mitigation and their co-benefits for economic development, job creation, productivity or inclusion of youth, women for equity and inclusion. They have not really changed since being introduced decades ago by Dr Mahbub ul Haq or cosmetically revised in 2005. Reconstruction and rehabilitation cannot be resilient without revising them. Countries do not fail, but institutions do if they do not evolve and change. Let’s not allow stagnation to set in.

The writer is an expert on climate change and development.

Published in Dawn, January 12th, 2023

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