Post-flood Pakistan is recovering, but issues still remain

The international relief effort has worked — but it has thrown up new problems.

Flying over Pakistan's Swat Valley, you can see encouraging signs of post-flood reconstruction. Where bridges had been destroyed, temporary structures are being put in place, where roads had been washed away now hardened dirt tracks are appearing, and where schools had been flattened, makeshift buildings are being erected.

I had deliberately held off visiting Pakistan in the immediate aftermath of the devastating floods this summer to avoid becoming another spectator getting in the way, but finally arrived in Islamabad just over a week ago. The purpose was to use my position as chair of the European Parliament's delegation to south Asia to highlight the ongoing humanitarian situation and reconstruction needs at a time when initial public attention had waned.

In the area we visited in the north, Swat Valley, the response has been swift. However, the irony was not lost on me that this was due in large part to the existing presence of the army and NGOs, in situ because of the ongoing conflict and the enormous number of people recently displaced from the area. In the south, in areas such as Sindh Province, where the army and NGOs have not been as active because they have not needed to be, the situation is not so encouraging.

Indeed, the relief effort has thrown up new problems.

We heard from Unicef about the discovery of pockets of extreme deprivation, abject poverty and bonded labour that the authorities had not even known about until after the floods. This discovery is a symptom of a larger problem – a severe lack of baseline information. The last census was some time ago, so accurate information is lacking about where people are and, indeed, who they are, which makes it all the more difficult to reach the most vulnerable. Population movement in response to the state of flooding has also made it more difficult to deliver aid effectively.

There had been initial concern whether aid money would reach those in need or be diverted en route. The Pakistani government set up a special committee to ensure transparency and most of the overseas aid money has been distributed through international agencies and seems to be getting through.

General Nadeem Ahmed, in charge of the overall disaster management effort, was also keen to stress how the efforts of ordinary Pakistanis, rallying to provide food, water and shelter to those in need, as well as assisting in reconstruction efforts, had made the progress we witnessed possible. However, it is also clear that the entire operation is severely stretched and many of the agencies are reporting that initial donations have already been spent.

Next week, Pakistan will host a conference of international donors and the conversation will turn to long-term issues. Should disaster recovery build back or build better? And how is this reconstruction programme going to be financed?

There is no doubt that the amount of interest paid on Pakistan's debt is more than the money that the Asian Development Bank has offered in loans. Yet I certainly heard some scepticism around reducing debt repayments while the Pakistani government is writing off debts owed to the state and remains unwilling to take action to make its tax collection more efficient and effective. Recent statements from President Asif Ali Zardari are sounding more positive.

It should not be forgotten that this is a relatively new democratically elected government, and one that is facing enormous challenges. We met some extraordinary people inside and outside parliament. But there is a clear view that the government also needs to be taking action on corruption and moving the pace of change more quickly – the reconstruction effortdemands it, and winter is coming on.

Jean Lambert is an MEP for the Green Party.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.