Pakistan’s Kashmir stance blocks India’s flood aid


While India is ready to provide the assistance to the flood ravaged country, Islamabad is yet to take a concrete decision and also “needs to shift its stand on Kashmir.”…writes Mahua Venkatesh

The devastating floods in Pakistan, which could cost more than $10 billion to the exchequer, has largely undone the gains of the International Monetary Fund (IMF) loans and other financial assistance received from other countries. Lakhs of citizens are now going hungry and staring at a health crisis. The floods have left 1,300 people dead and millions displaced.

While India, sources said, is ready to provide the assistance to the flood ravaged country, Islamabad is yet to take a concrete decision and also “needs to shift its stand on Kashmir.”

Earlier, Prime Minister Shehbaz Sharif’s insistence on resolving the Kashmir issue for resumption of trade between the two countries once again created a roadblock in normalising relations between New Delhi and Islamabad.

“Once a formal request comes, the government will surely look into it favourably,” a source told India Narrative. “However that has not happened,” he said.

In August, the cost of food in Pakistan surged by 29.53 per cent compared to the same month in the previous year. But Pakistanis need to prepare for worse as food prices are set to further soar with thousands of hectares of crops being damaged. Pakistan’s food imports will therefore rise in the coming months. The agriculture sector accounts for about 22 per cent of the country’s GDP.

Challenges for the Sharif government rise

For the Shehbaz Sharif government, the going has been tough since it came into office in April. The country, which was on the brink of bankruptcy, was hit by a severe heatwave and then the floods, which dealt a blow to the agriculture sector.

Since January this year, food prices in the country have been steadily rising. The increase in fuel prices by the Sharif government, which took charge in April, has added to the problem. “Inflation will rise even more as crops are now damaged and supply chain is a very worrying situation for the country but it is appalling that the government is talking about Kashmir even at this stage,” the source quoted earlier added.

He added that Islamabad may find it difficult now to carry on with the reform process and raise tax rates as prescribed by the IMF.

“This fiscal space will become tighter from both ends. From the revenue side, the government will lose revenue from the loss of economic activity. On the spending side, the government has had to extend significant humanitarian support and reconstruction activities,” Al Jazeera quoted Shahrukh Wani, an economist at the Blavatnik School of Government, University of Oxford.

The IMF stalled its $6 billion loan programme in 2020 after approving the same in July 2019. However, the programme has just been revived with a $1.17 billion loan to Pakistan. A few other countries including China, Saudi Arabia, UAE and Qatar have also come forth to help the cash strapped country.

The United States Institute of Peace (USIP) has noted that while it can be argued that planning for a disaster of this magnitude is impossible, on the provincial level there should have been more forethought given to their plans, especially knowing that each year the monsoon rains become more intense.

Celebrations that broke in the country after the revival of the IMF loan will be short lived amid the large-scale destruction that the floods have caused.

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