ISLAMABAD, Nov 18: Pakistan holds an International Donors’ Conference here on Saturday amid expectations that international community will extend maximum grants and soft loans to meet at least $3.5 billion reconstruction cost in the wake of the October 8 earthquake devastation.
Major donors, including multilateral agencies, are expected to pledge contributions primarily in grants and soft loans that will set the tone for individual countries and aid agencies to come up with donations once the conference is over.
But most of the donors will first like to see what the government has pledged for the reconstruction and rehabilitation and then make up their mind for the contribution.
They expect Pakistan to commit about $1 billion through re-appropriation of its major budgetary allocations to make an honourable way of attracting others to contribute.
A couple of donors contacted by this correspondent expect Pakistan to re-appropriate its development allocations for Azad Kashmir and the NWFP to the tune of Rs20-25 billion over a period of three to four years by restricting the defence budget at the level of budgetary allocations, which are normally scaled up every year beyond original allocations.
Sources said Pakistan was expected to get about $1 billion in grants given the fact that the World Bank has endorsed the $5.2 billion damage assessment as fair and realistic.
This will give credibility to the assessment and an encouragement to bilateral donors. The World Bank has already committed to provide about $415 million in soft term financing in addition to about $60 million reallocation of its existing programmes.
Pakistan’s case for international assistance has also been supported by the two super powers, the US and the UK. Turkey is expected to remain on top with its aid whereas Arab countries are expected to make sizable contribution both in cash and oil, according to sources.
The Asian Development Bank will announce its support to the government’s reconstruction plans, including setting up of over $300 million Pakistan Earthquake Fund to be partially funded by its member countries.
The UK was expected to announce over a $120 million in grant, the sources said.
Minister of State for Economic Affairs Hina Rabbani Khar said the conference will be start of the process, not the end, of building a consortium to be involved in the longer term for rehabilitation and reconstruction which may take two to three years.
Dr Salman Shah, adviser to the prime minister, in his meetings with visiting heads of delegations on Friday sought maximum support from the international community to meet $3.5 billion infrastructure reconstruction and $1.7 billion for relief and rehabilitation of displaced people.
