Sunday, September 12, 2010

International Funds Slow to Trickle into Pakistan After Massive Flooding

AP: Official: Int’l Aid for Pakistan for Pakistan Floods Over $800M Pakistan Flood Waters Recede but Country’s Debt Rises IMF to Provide US$450 Million in Immediate Emergency Assistance to Pakistan and Work Toward Completion of Stand-By Arrangement Program Review U.N. Flood Relief Official Says She Will Seek More Money World Bank Boosts Pakistan Flood Support to $1 Bln Pakistan Flood Emergency Far From Over

Pakistan is currently enduring possibly its worst natural disaster in history. The UN estimates that so far 1,750 people have died, 1.8 million homes are either destroyed or damaged, 6 million people are homeless, and 21 million people have been affected in some way due to massive flooding affecting one-fifth of the country’s entire territory.

The world’s financial institutions have pledged millions to support the country. The World Bank increased its pledge last week to $1 billion. The money is meant to help finance both the immediate recovery needs and long-term reconstruction projects. It comes from International Development Association (part of the WB) funds already earmarked for Pakistan. These loans carry a longer term for repayment and are interest-free. The IMF agreed to make $450 million available within the next month as immediate emergency relief. This money is on top of the $7.3 billion already available as part of the Stand-By Arrangement in place since November 2008 whose terms also might be renegotiated as a result of the flooding.

The UN originally called for $460 million in global relief for the country, but has asked for more money in recent days. So far pledges have amounted to only 64% of the original request. The U.S. alone has pledged $150 million. Pakistan itself is requesting countries cancel some of its outstanding debts (which will reach $74 billion by 2014) as an additional form of relief. It argues that the flooding justifies this action under the UN Human Rights Commission “State of Necessity” resolution. Pakistan has also mentioned that 70% of its international debt was accrued by dictatorial governments as further justification for its request for debt repudiation.

All of these institutions have raised fears that Pakistan is not receiving enough money to properly cope with the crisis, citing possible donor exhaustion following large fundraising campaigns after major earthquakes in Haiti and Chile. Some also blame the relatively low death toll for creating the international perception that the situation is not as bad as it is.

1) In light of the fear of “donor exhaustion,” do you think it is the world’s responsibility to come to the aid of other countries when natural disaster strikes? If yes, do you think this responsibility should extend to providing assistance to countries that are in dire straits no matter the cause?
2) Would it be moral for countries to limit their assistance to those countries with which it has some kind of political tie (for example, the U.S. giving aid to Pakistan because it sees it as an important ally in the war in Afghanistan)?
3) Should the UN be able to require countries to donate to disaster-stricken countries?
4) Does the fact that a dictator accrued a country’s foreign debt provide sufficient justification for international debt repudiation?

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