The unprecedented floods in Pakistan brutally confirmed that Pakistan is one of the countries most vulnerable to the impacts of climate change. The supreme irony is that it has contributed virtually nothing toward climate change.
In the last two decades, recurrent spells of extreme weather events, such as floods, droughts, glacial lake outbursts, cyclones, and heat waves, have taken a heavy toll on life and property and adversely affected Pakistan’s economic growth. For instance, the super flood of 2010 killed 1,600 people, inundated an area of 38,600 km, and caused damage worth around $10 billion. Similarly, the heat wave in Karachi in June 2015 killed more than 1,200 people.
In the first half of this year, Pakistan faced forest fires, heat waves, drought conditions, and glacial lake outburst floods. The heatwave from March to May, with the highest temperatures in the world, triggered over 89 forest fires in Baluchistan and Khyber-Pakhtunkhwa, over 30 glacial lake outbursts in the Northern areas, and drought in Sindh and Baluchistan.
Then came the rains; what the Secretary-General has called a “monsoon on steroids.” The unprecedented monsoon rain caused a flood of biblical proportions. The rainfall in Baluchistan and Sindh Provinces, where monsoon rains are usually sparse and intermittent, was five times the recorded average, causing massive flashfloods and hill torrents in Baluchistan, Sindh, and South Punjab and inundating most of the entire province of Sindh. One-third of the country was under water – an area the size of the United Kingdom or the U.S. State of Colorado.
This unrivaled “natural” disaster has taken a huge toll: over 1700 lost their lives, and 13,000 were injured. 33 million, including 16 million children, are estimated to be affected, one in every seven Pakistani. Over a million homes, 13,000 kilometers of national highways, 410 bridges, and 5.4 million acres of crops were damaged. The floods have displaced at least 7.9 million people, of whom some 600,000 are living in relief camps. Nearly 800,000 internal refugees are estimated to be hosted in more than 40 calamity-notified districts, including over 175,600 women, 194,000 girls, and 206,000 boys.
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According to a World Bank estimate, the financial damage caused by this calamity is $40 billion (12 percent of Pakistan’s GDP). The World Bank estimates that as a direct consequence of the floods, the national poverty rate may increase by 4.5 to 7.0 percentage points, pushing between 9.9 to 15.4 million people into poverty and intensifying the depth and severity of poverty for already poor households.
Many Pakistani farmers will miss the winter planting season and cause future food shortages in Pakistan, obliging the import of wheat and other food items, and further squeezing Pakistan’s already scarce fiscal space. Another immediate challenge is the threat posed by water-borne diseases – dengue, cholera, and malaria. National and international teams have been deployed to avert this threat.
On the bright side, the entire Pakistani nation has responded heroically. Pakistanis, even those who do not have much, have come to the aid of their compatriots. The government provided initial cash support of $245 million to 2.2 million households and distributed hundreds of thousands of tents, food, water, and medicines to the needy and displaced.
All three-armed services have helped to rescue thousands, with 50 helicopters, thousands of boats, and rescue teams, working round the clock to save lives and bring relief. A National Flood Response and Coordination Centre (NFRC), chaired by the Prime Minister, has been established to synergize all disaster management actions – search & rescue, logistics, engineering support, procurement of relief supplies, and coordination of internal & external assistance.
Pakistan has so far received generous support from governments, international development institutions, civil society organizations, philanthropists, and individuals worldwide for relief efforts.
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The United Nations was among the first responders. The Secretary-General joined the Pakistan government in issuing the first Flash Appeal for $160 million on August 30, based on preliminary loss and damage reports. However, since that Flash Appeal, the impacts of the floods have enlarged, particularly in Sindh, which was almost completely inundated. Accordingly, an enlarged Flash Appeal for $816 million was launched on October 4, 2022, to cover relief for the next nine months in eight key sectors – education, food security, agriculture, health, nutrition, protection, shelter, water & sanitation, and logistics.
Master plan of resilient reconstruction
Although still in the phase of relief, a national team led by the Minister for Planning Development and Special Initiatives, together with a core team of the World Bank, the United Nations, the Asian Development Bank, and the European Union, has completed a Post-Disaster Needs Assessment (PDNA).
It has identified the revival of livelihoods, agriculture, reconstruction of private housing, redesign, rehabilitation, and reconstruction of public infrastructure, such as roads and bridges, and community infrastructure, especially education and health facilities, as the primary sectors. The PDNA will become the basis for a comprehensive national rehabilitation and reconstruction plan of the Government of Pakistan, which it hopes to present to the Pledging Conference envisaged in the resolution adopted by the U.N. General Assembly on October 7, 2022.
The Plan will require the preparation of hundreds of projects to reconstruct the destroyed or damaged physical infrastructure – housing, roads, bridges – and social infrastructures, such as health clinics and schools.
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The reconstruction will have to build back with resilience. Climate change has happened, and global warming will continue, even if the industrial countries achieve the goal of reaching net zero emissions by 2050, which looks ambitious. Pakistan, and other vulnerable countries, must prepare for floods, heat, drought, and glacial melt in the future through adaptation.
The Reconstruction Plan, at the same time, must ensure the continued annual economic growth of at least 8 percent if Pakistan breaks out of the cycle of poverty. The Plan must, therefore, besides building climate resilience, respond to Pakistan’s development priorities and enable it to achieve Sustainable Development goals.
Some planning for climate adaptation has already been done in Pakistan. The ambitious “Living Indus” project should be an important element of the reconstruction plan. Through 25 separate and already costed projects, it envisages a sustained revival of our irrigation system, underground aquifers, reclamation of agricultural land, and restoration of the Indus delta.
Similarly, the promotion of renewable energy – solar, wind, hydro – espoused by the government will need to be part of Pakistan’s “master plan” for resilient reconstruction.
At the same time, Pakistan cannot afford to leave its coal assets stranded. The 170 billion tons of coal resources in Thar contain double the energy potential of Saudi Arabia’s oil resources. New technologies have been developed, especially in the U.S., which can enable economically cheaper mining of coal, the capture and utilization of carbon emissions, and the gasification and liquefaction of coal. If exploited correctly, Thar coal can provide enough power, gas, and fuel to make Pakistan completely energy-independent – with low carbon emissions.
A pre-requisite for a positive international response to the “Master Plan” is the formulation of well-conceived and properly structured projects. Financing for implementing the Plan can come from multiple sources, as discussed below. But neither public nor private finance will likely be committed unless Pakistan can prepare and present viable projects. The government – at the Federal and Provincial levels – will need to utilize the best expertise available, national and international, to conceptualize and prepare well-structured and viable projects for inclusion in the Master Plan.
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Besides the World Bank, the Asian Development Bank, and the Asia-African Infrastructure Bank (AAIB), the U.N. system can also provide valuable support in preparing the “Master Plan” and its component projects.
The U.N. Secretary-General has nominated the Deputy Secretary-General, Amina Mohamed, a former Nigerian Environment Minister, to lead a U.N. inter-agency team to support Pakistan in formulating and implementing such a “Master Plan” for resilient reconstruction. At the initiative of Pakistan’s U.N. Mission, the UNDP has set up an SDG Project Preparation Facility, which operates with the Finance and Planning Ministries. This could be utilized for expeditious project preparation. The UNDP is also conducting an SDG “Mapping” exercise to identify essential areas for investment to achieve SDG-aligned development in Pakistan.
Who picks up the tab?
Financing will be the most critical element in ensuring the implementation of the reconstruction “Master Plan.” Besides mobilizing domestic resources, Pakistan could secure such financing from multiple external sources.
In enabling recovery from the climate-induced flood disaster, Pakistan is entirely justified in seeking such external financing on the grounds of “climate justice.” Yet, sympathy or guilt will not secure the money. To ensure such financing, including at the envisaged Pledging Conference, it will be vital to have a well-conceived “Master Plan” and well-prepared projects for reconstruction with resilience. Then, Pakistan will need to “sell” its reconstruction Plan to bilateral and multilateral sources of finance, perhaps in several “road shows.”
The first priority should be to secure concessional finance, which does not create additional debt. This could be secured through the IMF, the Multilateral Development Banks (MDBs), and bilateral donors.
The IMF has a Rapid Financing Instrument (RFI), which can provide emergency support. It has also set up a Resilience & Sustainability Trust (RST), which could finance projects if Pakistan is made eligible for RST funding. The IMF is also creating a “food security facility” which could assist in case of need. Pakistan could also approach some developed countries to re-channel their unutilized Special Drawing Rights (SDRs) to Pakistan.
Similarly, the World Bank, which has “repurposed” $850 million for relief and recovery, can provide concessional financing through its IDA “window” for SDG-related projects. The Asian Development Bank can also offer similar project financing from its $2 billion commitment.
Bilateral donors – USAID, U.K.’s DEFIT, the E.U., and others – can provide concessional (grants and soft loans) as “Official Development Assistance” (ODA).
The U.N. Secretary-General has proposed an “SDG Stimulus” package of $500 billion mainly for the least developed countries. Pakistan has been included as a “second-tier” beneficiary. This “stimulus” will be presented to the G-20 Summit in Bali for approval.
There is considerable discussion about debt relief and restructuring. So far, the MDBs and private investors have refused to participate in debt suspension, much less agree to debt restructuring. Pakistan will need to address the debt issue circumspectly to ensure that this does not foreclose its access to financing from the market. A multilateral solution for all debt-distressed developing countries may be the best approach to the debt problem.
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Debt swaps have also been proposed. Swap against Key Performance Indicators is easier than swaps for Climate or SDGs, which require the recipient country to propose concrete SDG climate-related projects for the “swaps” and accept close supervision of the implementation of the projects.
Another option is “blended finance, i.e., utilizing official assistance to lower the cost of and “de-risk” private investment in SDG or climate-related projects. Several large asset managers and Pension Funds are prepared to consider such public-private partnership deal structures. Similarly, recourse is possible to issuing “green” or “SDG” bonds to finance projects. The UNDP has helped Mexico and Indonesia in issuing such bonds.
Pakistan’s reconstruction Plan could identify which elements of the Plan could be financed from which specific funding source and structure the relevant projects accordingly. Again, expert advice should be available in making such decisions to secure maximum financing at the lowest possible cost.
Pakistan & role of G77
Pakistan is well placed to mobilize such financial and technical support for its reconstruction Plan. There is widespread acceptance of its call for humanitarian solidarity and “climate justice.” Pakistan is also the current Chair of the Group of 77 and China (135 developing countries). It will play an important and influential role at the forthcoming COP27 “Climate Summit” in Sharm-el-Sheikh (Egypt).
At this Conference, the Prime Minister will Co-Chair a Summit meeting with the President of Egypt. Pakistan should call for international support for its reconstruction plan. Yet, to reiterate, international financing will be forthcoming not because of a sense of “guilt” on the part of donor countries or institutions but in response to a well-conceived and constructed reconstruction Plan and projects.
Of course, as the Chair of the Group of 77 and China, Pakistan will promote and press for the broad objectives and aspirations of the developing world. These objectives are:
One, mobilization of the $100 billion-plus promised by the industrial countries in climate finance and agreement on a new, larger, collective quantified commitment by the developed countries;
Two, the allocation of half of all climate finance for adaptation projects in developing countries to build resilience against future climate impacts;
Three, the establishment of a financing facility to compensate developing countries most severely impacted by or vulnerable to climate change – the so-called “loss & damage” finance facility; and
Four, developed countries commit to funding the extra costs of all climate mitigation projects voluntarily undertaken by developing countries.
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These commitments will be difficult to extract from the industrial North. Even if these commitments are made, their realization may take time.
Pakistan’s needs are urgent support. Our best strategy may be to build a “coalition of the willing” countries and institutions which are prepared to partner with Pakistan to implement its “Master Plan” for resilient and SDG-aligned reconstruction.
Ambassador Munir Akram is the Permanent Representative of Pakistan to the United Nations, with the rank of Ambassador Extraordinary and Plenipotentiary. He has a foreign service career spanning four decades, joining the elite cadre in 1967. Prior to that Ambassador Akram has held positions as Pakistan’s Permanent Representative to the United Nations, Pakistan’s Additional Foreign Secretary, Ambassador to EU, Ambassador to UN’s Geneva office, he has specialized in multilateral diplomacy and has held positions in many intergovernmental organizations including UN Secretary General’s Advisory Board on Disarmament and President of the Security Council.