WASHINGTON, DC, September 1, 2010 – World Bank Group President Robert B. Zoellick told Pakistan Finance Minister Hafeez Shaikh today that the Bank would raise its flood-related support in the current fiscal year to US$1 billion from US$900 million and emphasized the Bank Group’s commitment to help Pakistan recover from the worst floods in its history.
“As the surging Indus River devastates Pakistan, the country needs the world’s support to meet urgent humanitarian needs: food, clean water, sanitation facilities, medical and nutritional supplies, and vaccines,” said Zoellick after meeting Shaikh. “At the same time, Pakistan’s reconstruction and recovery also require long-term support. The World Bank is committed to helping the people of Pakistan during this time of need and has made US$1 billion available to finance immediate recovery needs and longer-term reconstruction.”
The money will come from the Bank's fund for the poorest countries, the International Development Association (IDA), which means that the loans are concessional and carry no interest payments. This funding is already programmed money for Pakistan that is being diverted to meet immediate needs.
Zoellick and Shaikh also discussed the government’s economic reform program, institutional and governance arrangements, and the need to mobilize additional resources for flood reconstruction.
“We need to respond strongly to the crisis at hand, but we need to do it without losing sight of important economic reforms,” said Zoellick. “This disaster underscores Pakistan’s fiscal vulnerability and dependence on foreign aid. Renewed commitment to governance and fiscal reforms will be important to mobilize domestic revenues and ensure that funds reach the poor people it is intended for. The response of donors to the floods will also depend on the government’s ability to deliver in this area.”
Shaikh also met with World Bank Managing Directors Ngozi Okonjo-Iweala and Sri Mulyani Indrawati, and Isabel Guerrero, World Bank Vice President for the South Asia Region, during his visit to the Bank headquarters as part of his longer visit to the United States.
The World Bank management assured Shaikh that in addition to financial support, the Bank Group is willing to assist the government of Pakistan in setting up instruments to track aid flows, and establishing sound procurement practices, grievance mechanisms, and robust monitoring and evaluation systems. The Bank also shared with Pakistan a number of important lessons learnt from other reconstruction experiences, such as in Aceh, Indonesia and Haiti, to improve the effectiveness of recovery and reconstruction efforts. Pakistan and the World Bank also have a recent shared experience in disaster recovery, with the World Bank working with the country after the 2005 earthquake.
In addition, the Bank has made available a grant through a fund for disaster reduction and recovery to support an urgently needed Damage and Needs Assessment (DNA), led jointly by the Asian Development Bank and the World Bank, at the request of Pakistan. The assessment will provide the government and international community with a credible assessment of the extent of the damage and an estimate of the cost to reconstruct and rehabilitate damaged infrastructure and services. The DNA is planned to be completed by mid-October.