Q&A: Climate funds only work without red tape - Pakistan minister

As countries at COP29 discuss contributions to a new climate fund, a Pakistani minister told Context that his country's experience dealing with massive floods in 2022 has taught him that such funds can only work without much red tape.

Delegates at COP29 last week agreed to start disbursing money from the Fund for Responding to Loss and Damage (FRLD), a fund to support developing nations suffering losses from climate change, and negotiations on the financial details are ongoing.

Syed Murad Ali Shah, Chief Minister of Pakistan's Sindh province, said the quick disbursement of funds was essential to deal with the floods that hit his province in 2022, causing 15 million people to lose their homes and $16 billion in damages.

Pakistan's 2022 floods are widely seen as having created the momentum for the setting up of the FRLD.

Context sat down with Murad Ali Shah at COP29 in Baku, Azerbaijan to find out more.

What impact did the 2022 flood have on Pakistan's people, infrastructure, and economy? 

In the last five decades or so, our main river Indus has become erratic, more so after the building of several structures on the river, leading to floods in the country.

The 2022 flood was by far the most severe that the region had faced in its history.

I felt so helpless when I surveyed the province during the floods. Millions of peoples' houses were completely destroyed. The roads were washed out, all their livelihoods were gone.

The first priority for our government was to look after our people. We provided relief, launched rescue operations. And we started to remove water from farms so that our farmers could sow the next wheat crop, which is a source of income for the rural community.  

During the floods, chairman (of Pakistan Peoples Party) Bilawal Bhutto (Zardari), who was our foreign minister at the time, (said) he (wanted) to build back all the houses that (had) been demolished.  

I did some calculations, but the financial numbers for rebuilding were so large that I thought this would not be possible, and I told him so. But he remained determined, so we started figuring out how to do it.

You say you were taken aback by the numbers in your calculations, could you please share some of those initial estimates?

Our estimates showed that a little less than 2.1 million houses were washed out or damaged to (the) extent that they (would) have to be built back again, affecting a total of 15 million (people).

(Some 154 countries in the world have a population smaller than) 15 million people ... so with the house rebuilding project we were going to be creating a country which was larger than most countries.

Now, we obviously could not think of building large houses for them, we would have to do the bare minimum of building one room for a family of 4-5 members. But our yardstick was to build resilient houses that could withstand another catastrophe.   

The cost of building these houses was about 300,000 (Pakistani) rupees ($1,079.53) a house. This is not a large amount by international standards, but given the situation in Pakistan, it was big for us.      

So how did you plan the rebuilding and how did you manage the money?

We decided to have the people build their house with government support because contracting this out would have been expensive. 

We formed a company called Sindh Peoples' Housing for Flood Affectees to oversee the project. We got the World Bank, Asian Development Bank and later Islamic Development Bank to help us.

Initially the World Bank came in with $500 million, we put in 50 billion rupees, which was equivalent to about $227 million at that time, and started work. Knowing that we'd be needing about $2 billion for the entire rebuilding project. 

Now, raising $2 billion is not easy, especially for Pakistan, because of the economic situation that we were in. 

But our project had transparency, robustness, and data that anybody could use to check from anywhere in the world that the money was being spent properly. That helped us raise more than $2 billion for this project.

Right now, we are in the process of building 800,000 houses out of the 2.1 million. More than 300,000 houses are complete. This is the largest housing project in the world. 

Prior to this, the Nepalese government had built back 790,000 houses after the 2015 earthquake, which took them 7 years. (That is) something that we (will have done) in less than two years.

We are hoping by COP30 (next year), we would have built almost all the 2.1 million houses. 

Right after Pakistan’s 2022 flood, the Loss and Damage fund was agreed upon by over 200 nations at COP27. Do you think this fund will be able to help countries dealing with climate extremes?

Floods in 2022, I believe, became the catalyst for the Loss and Damage fund to be approved in COP27. Pakistan feels that the formalities with funds like these will have to be made easier. 

Countries will not be able to use these funds with very strict requirements. For example, we were able to start rebuilding quickly, because we did not have too much red tape in it.

If somebody's house is damaged in 2022 and he has to wait 5 years for the world to help him repair his damage through these climate funds, it is not going to help.

So, my appeal to the developed countries and to the various climate funds, is that if they want to help, they will need to act quickly. 

So, they must make things easier. For example, the Green Climate Fund (one of the UN's climate funds) -- it is almost impossible to complete the paperwork and get funding from them. 

What needs to happen for people and countries to continue to have faith in these climate funds?

The housing project by the Pakistan government has not only provided houses, but it has helped in restoring faith between the people and the government. 

It has also helped in restoring faith between the government and the international financial institutions, that things can actually happen quickly, when we need it the most. 

If you involve countries in too much paperwork, they are not going to get any benefit from any of these funds available.

This interview has been edited and condensed for clarity.

($1 = 277.9000 Pakistani rupees) 

(Reporting by Bhasker Tripathii; Editing by Ana Nicolaic da Costa)