Massive support and debt relief, the UN recipe for rebuilding Pakistan

The UN chief on Monday called for massive support to raise the more than $8 billion Pakistan needs to rebuild after last year’s devastating floods, which could well seal the fate that awaits many countries in the face of climate change .

“No country deserves to suffer what happened to Pakistan,” said Antonio Guterres, opening an international conference to mobilize half of the 16.3 billion dollars (15.3 billion euros) deemed necessary to rebuild the country in order, in particular, to be more resilient to the consequences of climate change.

The UN secretary general has called for “massive investment” and a reform of the international financial system to help Pakistan, an issue he had already raised during the COP27 climate change in Egypt.

Last Monday, the World Bank called for “keeping spending within bearable limits”.

“A truly resilient recovery will not be possible without further fiscal and structural reforms,” ​​said Martin Raiser, vice president for the South Asia region at the World Bank, calling for better targeting of social welfare, reduced spending that “weakens the public finances” and to adopt “a more progressive and broader taxation”.

The devastating floods – which killed more than 1,700 people and affected more than 33 million people – and the global energy crisis have increased the pressure on Pakistan’s economy, plunging the country into an extremely difficult financial situation.

Pakistani Prime Minister Shehbaz Sharif told the conference his country was in a “race against time” to meet dire needs. “We are at a turning point in history,” he warned.

In front of reporters, he urged the International Monetary Fund (IMF) to ease the pressure. “I’m constantly trying to get them to give us a break,” she said. “Economic stability is very important. The day we are all dead, economic stability will be perfect,” the head of the United Nations joked next to him, in support.

– “Creative” international funding –

Pakistan, the world’s fifth most populous country with 216 million people, is responsible for less than one percent of greenhouse gas emissions. But it is one of the most vulnerable to the growing number of extreme weather events.

The country is also one of those who supported the creation of the “loss and damage” fund at COP27 aimed at supporting southern countries in the face of the consequences of global warming.

“If in doubt about losses and damages, go to Pakistan,” Guterres said on Monday, assuring that the country is “a doubly victim of climate chaos and a morally bankrupt global financial system.”

He complained that the international financial system does not provide sufficient support to middle-income countries that need to “invest in natural disaster resilience”, by providing debt relief or new finance, and called for “creative” international finance to help these countries “. when they need it most”.

Of the $16.3 billion needed to fund Pakistan’s “Resilient Recovery, Rehabilitation and Reconstruction Plan”, the government estimates it can fund half through its own budget and public-private partnerships, but needs the international community to pay the rest.

Islamabad and the United Nations explained that Monday’s conference, attended by representatives of some 40 countries, the World Bank and development banks, is much broader than a traditional donors’ conference, as it seeks to establish an international partnership long-term focused on reconstruction, but also aimed at improving Pakistan’s climate resilience.

The Islamic Development Bank group has pledged to finance $4.2 billion over the next 3 years.

And some countries made announcements on Monday, including the United States with another $100 million and France with €360 million in projects to help reconstruction and another 10 million in emergency aid, but the final amount is expected to be known. at the end of the day.