Official Bank Sites Related Information June 7, 2006—On October 8, 2005, a 7.6 magnitude earthquake struck the Himalayan region of Pakistan, killing 73,000 Pakistanis, injuring 70,000, and leaving 2.8 million without shelter. Many feared more people would starve or freeze to death as winter hit the remote, mountainous region. But that didn’t happen, says Tom Buckley, the World Bank’s Senior Country Officer for Pakistan. The government, supported by the United Nations and donor countries, was able to get relief and emergency shelter to the people who needed it, he says. “The good news is the country made it through the winter…the bad news is they still need to restore their lives. They still need to rebuild their homes. The public services that were damaged by the earthquake, like the health facilities and the schools, all need to be rebuilt,” says Buckley. “And people need to rebuild their homes and get their farms back to work. So there are huge amounts of work that need to done over the coming months.” The earthquake will cost Pakistan about US$5.2 billion, including relief, livelihood support for victims, and reconstruction, according to a damage and needs assessment by the World Bank and the Asian Development Bank. International donors, including the World Bank, pledged US$6.5 billion in mostly low-interest loans last November. Up to US$1 billion in zero interest loans will come from the International Development Association (IDA), a World Bank body that provides no-interest loans to the world’s poorest countries. The World Bank’s earthquake assistance is part of a four-year, US$6.5 billion financing package for Pakistan discussed by the World Bank’s Board of Executive Directors on June 1. The Board has already approved US$875 million of the earthquake funds, says Buckley. Under the plan, people who lost homes and livelihoods will receive “livelihood support” in the form of cash payments and assistance rebuilding homes that are more earthquake resistant, Buckley says. The Bank is also helping the Pakistan government pay for imported materials needed for reconstruction, he adds. The earthquake struck as the Bank was developing an assistance strategy for Pakistan. Successful reform measures, improved credit-worthiness, and a strong rate of growth—8.4 percent of Gross Domestic Product in 2004/2005 and an expected 6.6 percent this year—made the country eligible for increased World Bank financing, Buckley says. The package includes zero-interest IDA funds and funds from the International Bank for Reconstruction and Development (IBRD), which lends money to middle income and credit-worthy poor nations at favorable rates. The US$6.5 billion will help pay for transportation, water, and power infrastructure improvements, and increased support for education and health, to help Pakistan catch up to other countries of similar income, and further reduce poverty, which has declined 5 to 10 percent since 2001, he says. “This strategy is designed to help Pakistan prosper,” says John Wall, World Bank Country Director for Pakistan. “The country has moved from crisis to growth, laying the groundwork for sustained economic growth and significant poverty reduction. We will substantially ramp up support to Pakistan and focus on the areas that are most critical for the country’s poor and most vulnerable.” |
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