After securing a $4 billion lifeline from friendly Arab countries, the government will be prioritising the revival of the International Monetary Fund (IMF) programme to ensure that other multilateral entities keep the pipeline flowing amid unending political uncertainty. Walking on a tightrope, the multi-party coalition appears to be struggling to take further inflationary measures ahead of looming elections.

The $9.7bn aid pledged by multilateral lending agencies and bilateral partners in the Geneva conference is based on need assessments of the $16.3bn finalised and certified by the big four: the Asian Development Bank, the European Union, the United Nations Development Programme, and the World Bank Group to cover Resilient Recovery, Rehabilitation and Reconstruction Framework (4RF) spread over 17 critical sectors.

This was concluded with consensus by this group of four and the government based on international best practices in case of similar natural disasters and after considering the economic losses worth $15.3bn and infrastructure damages of $14.9bn.

There was, however, an equally important area where the group of four and the government could not reach a consensus, given international aid sensitivities related to disaster management and rising inflationary pressures across the globe, particularly the donor countries.

The government will have to tread alone with a $13.5bn financial plan, spread over seven years, covering water and irrigation, road infrastructure and railway assets

The government will have to tread alone with a $13.5bn financial plan spread over seven years to send the message of parallel support from non-traditional lending sources and institutions to cover three critical areas — water and irrigation, road infrastructure and railway assets.

A separate chapter ‘Achieving Sustainable Climate Resilience’, the financing mechanism, sources of financing and gaps was made part of the 4RF without the support of the big four. As a result, a disclaimer had to be added to the 4RF saying the contents of ‘Achieving Sustainable Climate Resilience’ and the government’s current financing expectations do not necessarily reflect the views of the contributing partners, their member states or the World Bank Group and Asian Development Bank’s respective management, board members and shareholders.

Under this plan, Pakistan has estimated separate financing requirements of Rs2.98 trillion ($13.5bn) within five to seven years. This includes a Rs570bn chunk for the national flood protection programme that was originally approved by the council of common interests (CCI) in 2018 at an estimated cost of Rs332bn but remained in the cold storage over the next four years. It will be completed in two phases. The first will begin in the coming fiscal year at an estimated cost of Rs194bn, shared by the centre and the provinces. A second phase of Rs376bn will follow this.

The second part of this pertained to rehabilitation, improvement and reconstruction of the road network spread across the provinces with a Rs1.05tr portfolio, beginning with Rs224bn dualization and rehabilitation of Karachi-Quetta-Chaman (N-25), Rs220bn rehabilitation of Indus Highway (N-55) and repairing national highways damages with Rs58bn. The next phase will be Rs320bn rehabilitation and reconstruction of national highways and provincial roads.

The third important area pertained to railway rehabilitation and upgradation with Rs1.358tr investment. Its first phase of the Mainline-1 Railway project from Karachi to Sukkur (Rs660bn) and from Kotri to Kot Addu (Rs219bn) has been submitted to China for a cumulative $2.7bn financing at concessional loan. Given the debt limitations, the subsequent phase of Kot Addu to Attock with Rs203bn and from Rohri to Tattan (Rs276bn) will be taken up later. It has now been realised that ML-1 can not progress at once with a massive financing portfolio of $9.8bn.

The lenders will have to be taken on board through a transparent implementation process through measurable benchmarks and third-party verifications. This is important, according to the planning commission, because Pakistan, over the past few decades, has faced natural hazards such as flooding, earthquakes and landslides that have escalated into humanitarian disasters, with loss of lives, homes, and livelihood.

Natural hazards in Pakistan are likely to increase as a result of climate change and environmental degradation. More extreme weather events and poor preparedness in communities can only increase the risks of humanitarian disasters. It may be remembered that the 20 poorest districts in the country — 11 in Balochistan, 7 in Sindh, three in KP and one in Punjab suffered the most in recent devastating floods.

Therefore, a community’s ability to prepare for and cope with natural hazards has been highlighted by the planning ministers to prevent disasters and save lives as an unprepared community is unable to cope, resulting in massive loss of life and the undermining of decades of social and economic progress.

A new approach to dealing with disasters will require a long-term resilient reconstruction plan after reviewing the country’s existing infrastructure. This plan would also offer space for community-based initiatives and public-private partnerships which see communities and victims as part of a solution, not a problem.

A long-term resilience framework would be put in place that provides the institutional structure across federal and provincial governments to avoid extensive loss and damage during natural hazards and international appeals time and again for support.

The plan is intended to help guide long-term recovery to increase the state’s capacity to withstand future shocks as Pakistan’s extreme vulnerability to accelerated climate induced events has exposed it to a multitude of risks, ranging from unprecedented heat waves, forest fires, glacial lake outburst floods, and water scarcity alternating with torrential monsoon flooding, growing desertification, droughts, and rising sea levels.

All these changes have made Pakistan the ground zero of climate catastrophe, where life on earth, water, and under-water has been impacted at exponential levels. Damage to agricultural productivity, public and private infrastructure, livelihoods, human health, and economic stability has led to irreversible impacts, including massive internal displacements as well as GDP losses. Global warming has pushed weather conditions to their extremities, which can be observed in Pakistan’s increased susceptibility from floods to droughts.

Published in Dawn, The Business and Finance Weekly, January 16th, 2023