Letter: Pakistan is no poster child for climate change loans

The FT’s call for rich countries to accept their responsibilities to finance investments allowing developing countries to adapt to a changing climate (“Pakistan’s perfect storm is an urgent call to action”, FT View, September 8) is compelling. However, using the Pakistan case may weaken the argument.

A country with severe governance issues, now in its 22nd program with the IMF, may not be the best poster child for these investments. Of course, the human tragedy cannot be overlooked, and humanitarian aid should flow, even if the claim that this is the rich countries’ fault may fall flat.

The call for multilateral development banks to step up their “adaptation” financing is valid, but with certain caveats. First, there needs to be confidence that public investment will not be mismanaged. Second, if subsidies are to be provided using International Development Association terms for World Bank lending, it must be accompanied by the actions of other creditors, such as the Chinese banks that have lent a great deal for basic infrastructure projects through the Belt and Road Initiative with little concern for climate change. Third, these loans need to be part of comprehensive programs that are adequately monitored.

To ignore the governance and implementation realities on the ground would be a big mistake and simply provides more arguments for inaction.

Danny Leipziger
Professor of International Business
George Washington University Washington, DC, US
Former Vice-President, World Bank

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