Quake spending needs transparency

By Zubeida Mustafa
Source: Dawn

WHEN the devastating earthquake of October 8, 2005, struck Azad Kashmir and parts of the NWFP, nearly 73,000 lives were lost, 70,000 people were seriously injured and 2.8 million were made homeless. The magnitude of the tragedy was enormous and Pakistanis as well as others from all over the world responded by sending in donations in cash and kind.

Many volunteered their time and services to help the victims. The government of Pakistan rose to the occasion to extend a helping hand.

It set up the Federal Relief Commission headed by a relief commissioner with the responsibility of “overseeing relief efforts targeting shelter, food, clean water and immediate medical care” as stated by the government.

A year later the time of stocktaking has arrived. Have the promises made in October 2005 been fulfilled? Have the sufferings of the earthquake victims been alleviated? Have they received the succour they were promised? The question now being asked in October 2006 is: how have the survivors fared?

A lot has been said about that, thanks to the electronic media which has reached out to the affected areas and talked to the people. The press has also been surveying the scene all along. But more than the media, many NGOs have done a solid job of monitoring the relief, reconstruction and rehabilitation work. They have, therefore, been better placed to challenge the government’s tall claims about its achievements. Hence the war of words between the government and the NGOs working on the ground.

The charges and counter-charges being traded in many cases have emerged as a game of numbers. The figures quoted by Erra (the Earthquake Reconstruction and Rehabilitation Agency that was set up after the temblor) of the people who have received aid and the number of housing units rebuilt are challenged by NGOs that claim to know better.

The various television channels that have sent correspondents to Azad Kashmir and the NWFP have focused their cameras on angry men and women complaining against government officials, post office functionaries, the patwaris, and the local bodies’ councillors who have tried to cash in on their miseries to make a quick buck. Speaking at a public meeting in Muzaffarabad on Sunday, the president admitted that there might have been wrongdoings at the lower level and said he would look into the matter. But what actually needs to be looked into is the lack of transparency that has characterised the financial side of the relief and rehabilitation effort. One must remember the government was handling billions of rupees donated by generous and kind-hearted souls and friendly governments. A comprehensive assessment is not possible in the absence of the relief and rehabilitation budget. Erra’s director general, finance, told me that his agency’s budget is awaiting audit and it will be months before it is available on Erra’s website (www.erra.gov.pk).

First, let us see what funds were collected after the tragedy struck. Within days of the earthquake the government announced the establishment of the President’s Relief Fund for Earthquake Victims and appealed to the people to donate generously. According to the federal budget 2006-07 document showing the revenues collected by the treasury, Rs15.047 billion were collected under this head.

Erra’s website gives details of the foreign aid received. It puts the total amount pledged as $ 6.522 billion. Now its annual report (not put on the website) says that only $1.6 billion was actually disbursed. Technically, each and every penny of the amounts must be accounted for. This is all the more important if it is noted that of the foreign assistance pledged by various countries at the donors’ conference in November 2005 — officially perceived as a fantastic foreign policy success — nearly 61 per cent, that is $4.020 billion, is in the form of loans that have to be repaid. Of the $2,501 million grants, the bulk (78 per cent) has been given to NGOs.

Arif Hasan, the chairman of the Urban Resource Centre and the Orangi Pilot Project Karachi, estimates roughly that seven per cent of the donations will go back into the servicing of the loans — that is if all of them are received. The Rural Development Policy Institute (RDPI), Islamabad, which undertook a study to “investigate the political economy of the earthquake in the NWFP and AJK” states that the status of disbursement has not been made clear from official sources as yet.

Arif Hasan also points out that a substantial sum has been spent on the overhead costs — 25 per cent for consultancy charges and 10 per cent for contingency planning. As is the wont in Pakistan the builders involved in infrastructure building earmark a profit of 25 per cent for themselves. Giving the example of the USA’s grant of $510 million, Hasan says nearly $300 million was deducted by the donor for the costs incurred.

The problem with the government’s handling of this massive sum is that it has failed to pay attention to the accuracy of budgetary/financial details, let alone make these public from time to time. As a nation we tend to be vague about statistics. That leads to loss of credibility. Take the president’s speech on Sunday. He made a sweeping remark that a sum of Rs20 billion was collected in the relief fund — the budget document puts it at Rs15.047 billion. Then the president went on to state that this was used to disburse Rs 25,000 each to 500,000 people. This works out to Rs12.5 billion. All these figures fail to tally.

This casual approach to finances does not help. Neither does playing around or tampering with figures. According to the RDPI report “Recovery Delayed, Recovery Denied”, work on nearly 83 per cent of the assessed houses (600,000) has still not started and 1.9 million people will be forced to spend another winter in temporary shelters. This was confirmed by Erra’s website on September 15, 2006. But three weeks later, Erra suddenly claimed out of the blue that work had started on 30 per cent of the houses. This change in figures has been described by RDPI as a “magical surprise” and it wonders how the pace of reconstruction suddenly picked up in 20 days. Its own ground level observation found that because of Ramazan construction work had slowed down. “Erra has cooked up inflated figures for public relations exercise,” RDPI observes.

It confirms “massive irregularities in the acquisition and processing of data regarding the registration of beneficiaries”. As a result, the people suffered because of delays in disbursement. Besides, ad hoc planning and disbursement of compensation and relief have also led to much confusion. The DG finance, Erra, told me that the government releases the funds he asks for to finance his agency’s work. He referred me to the cabinet division for more information on the funds received by the government and how they are spent.

The DG said last year Erra’s budget stood at Rs37.72 billion. For this year, he has asked for Rs50 billion, which incidentally works out to the $800 million, the amount for which the government has made a fresh appeal. But shouldn’t the government take the people of Pakistan into confidence and let them know precisely how the earthquake relief and rebuilding money has been spent? We also need to be told how the new loans will be repaid.

Endnote: Of the 60 donors who came forward to help, 17 were governments of Muslim countries and the Islamic Development Bank who together gave $1.77 billion. Only 40 per cent of this amount was in the form of grant, two-thirds of which went to NGOs. The Aga Khan Foundation gave $ 53.50 million as a grant to non-government organisations. Saudi Arabia, the largest donor from the Muslim world has still to pay what it pledged.