Pakistan seeks another $3.4 funding for cash starved economy
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In the wake of the devastating floods that struck Pakistan, international donors pledged a substantial sum of $10.9 billion to aid the affected regions. However, upon closer examination of these commitments, it becomes evident that Pakistan is anticipated to receive only approximately $3.4 billion as net funding, specifically designated for the implementation of vital infrastructure projects in these flood-ravaged areas.
Among the $10.9 billion in pledges made at the Geneva conference, a significant portion of the funding took the form of commodities financing, an oil facility, and the reallocation of funds, leaving a reduced sum available for the actual execution of development projects aimed at assisting the flood-affected regions.
A comprehensive analysis of these pledges reveals that the Islamic Development Bank (IsDB) played a pivotal role by committing $4.2 billion through its subsidiary, the ITFC, for commodities and oil financing over a three-year period. This left approximately $6.7 billion in remaining commitments from other sources.
Additionally, the Saudi Fund for Development (SFD) pledged $1 billion for an oil facility, with this commitment slated to expire by December 2023. Furthermore, the Paris Club countries extended pledges amounting to $1.2 billion, thus leaving an outstanding sum of $4.5 billion.
Multilateral creditors also played their part in the relief effort, re-purposing a total of around $1.127 billion for the flood-affected areas. Notably, the World Bank reallocated $299 million, the Asian Development Bank (ADB) contributed $78 million, and the Asian Infrastructure Investment Bank (AIIB) allocated a substantial $750 million.
However, when we exclude the re-purposed funding of $1.1 billion, the net amount available for construction and rehabilitation in the flood-stricken areas amounted to a mere $3.4 billion. This underscores the importance of efficient allocation and utilization of these funds to address the pressing infrastructure needs arising from the devastating floods in Pakistan.
