Pakistan has struggled to utilize $11 billion in foreign aid pledged nearly three years ago, Federal Finance Minister Muhammad Aurangeb said, as the country faces worsening floods. Speaking at a conference in Islamabad, Aurangeb noted that the lack of investable projects has limited the government’s ability to spend aid effectively, leaving a gap between pledged funds and actual disbursements.
Aurangzeb questioned whether state institutions had learned lessons from the devastating 2022 floods, which caused $30 billion in damages, amid the twin threats of climate change and rapid population growth. He warned that ongoing floods are again causing billions of dollars in damage.
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Out of $6.4 billion pledged for rehabilitation and reconstruction, only $2.8 billion has been disbursed. Overall, foreign lenders pledged $11 billion, including $4.6 billion for oil financing. The World Bank pledged $2.2 billion but released $1.6 billion, the Asian Development Bank committed $1.6 billion but gave $513 million, and China and the AIIB pledged $1.1 billion but released $250 million.
Other contributors like the Islamic Development Bank, Paris Club countries, and the United States have also only partially disbursed funds.
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Meanwhile, heavy rains in the upper catchments of the Chenab River have raised downstream water levels, prompting flood alerts for the Sutlej, Ravi, and Chenab rivers. Aurangzeb emphasized that unless Pakistan addresses climate change and population growth, it cannot realistically aim to become a \$3 trillion economy by its centenary year in 2047.
