Pakistan’s Disaster Relief Comes With Strings Attached
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In the first month of our humanitarian response, Oxfam reached literally hundreds of thousands of people affected by the floods with clean water, sanitation, and hygiene materials.
Following Pakistan’s deadly floods, the World Bank and the IMF have pledged over $1.4 billion in combined emergency aid to Pakistan. This comes on top of the $7.3 billion in guaranteed financing provided following an agreement in 2008. This massive influx is meant to address the needs of Pakistan’s suffering population while building the long term infrastructure to improve Pakistan’s economic stability.
We’ve seen this before. In recent decades, governments and institutions, most notably the World Bank, have seized upon times of crisis to push through controversial economic reforms that under normal circumstances would be unfeasible. Military coups, civil wars, and — of course —natural disasters are seen as opportunities to rebuild or start fresh: Post-Katrina in the United States, the tsunami that decimated coastlines in South Asia, and Hurricane Mitch in Central America are all seen as opportunities for economic reform tacked on to disaster relief.
Countries recovering from natural disasters are vulnerable, eager to accept aid to ease their immediate pain and without much bargaining power to set the terms. In many cases, funds given to these post-conflict countries are placed in specially designated trusts to be administered by the World Bank. The logic for this is that the country’s own government usually is deemed “not sovereign” or otherwise unfit to disburse funds. Either way, these grants and loans carry strict stipulations that must be met by recipient countries before the moneys are released.
These strict stipulations include mass privatization, dissolution of the public sector, and an opening of markets to foreign investments. While achieving GDP growth, these models are usually based on unsustainable resource extraction or exploitation of cheap labor. An influx of foreign investment leads to a increase of foreign profits, often at the expense of local enterprises.
Following Hurricane Mitch, the Wall Street Journal reported that Nicaragua sold off its nationally owned telephone company, petroleum sector, and electric companies to receive nearly $4.4 billion in foreign debt relief from the World Bank and International Monetary Fund. Following the tsunami in Sri Lanka, Thailand, India, and Indonesia laws were passed to prevent fishing families from reclaiming the land where their houses stood, in order to allow for the creation of a resort and tourism industry. In Afghanistan, the World Bank, who distributes aid through trust funds, has privatizedthe health sectorand refused to directly aid public hospitals and clinics.
One effect of these imposed reforms, or Structural Adjustment Programs, are their removal of important decisions from the domain of public debate. When industries and infrastructure are privatized, their de jour accountability no longer rests with the people who depend on their services, but rather with the interests that govern their administration. In Pakistan, these interests are mostly American and Chinese.
In recent weeks, the IMF has reportedly required a national tax increase as a precondition to its financial assistance. Qalandar Memon, a member of the Labor Party of Pakistan, claimed that decisions regarding the diverting of flood waters have prioritized U.S. military interests over concentrated areas of civilians. The people of Pakistan are in dire need of aid. However, given geopolitical realities, help — even the kind that comes with disaster relief — is rarely free.
Kayvan Farchadi is a staff writer for Campus Progress.
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