Donor countries should dig deep into their pockets to help 2.5 million people displaced in Pakistan as a matter of "enlightened self interest", the United Nation's refugee chief says.

U.N. High Commissioner for Refugees Antonio Guterres told AlertNet in an interview his agency was not even able to help half the people uprooted by Pakistan's military offensive to expel Taliban militants in the northwest Swat valley and neighbouring areas.

The U.N. refugee agency, UNHCR, has called for $105 million but has so far received only $28.5 million, or just over a quarter.

"If you combine volume and speed this is by far the most challenging internal displacement crisis I remember," Guterres said. "I don't recall any internal displacement crisis in which so many people have moved in such a short amount of time."

Guterres also warned that people were still being uprooted by the fighting. Aid workers are bracing for another 500,000 people as the military widens its operations to Waziristan - part of a region from where the Taliban orchestrate their war in neighbouring Afghanistan.

The refugee chief said donors were failing to cough up partly because they did not appreciate the scale of the crisis and its wider implications.

"It's not only a humanitarian problem," he said. "There's an importance to the world that goes far beyond the national dimension and I think this has not yet been perceived by many people."

The financial crisis had also affected funding, but Guterres said if countries could find hundreds of billions of dollars to rescue banks they should be able to stump up hundreds of millions for the crisis in Pakistan.

"We have at least to have the same enthusiasm in rescuing people as we have rescuing banks," he added.

"This is an emergency in which the dimension of the humanitarian crisis and the potential impact in international relations as a whole is such that to support the people is not only a matter of solidarity it's a matter of enlightened self interest."

BACKLASH RISK

Pakistan's military launched operations to clear the Taliban from the northwest in April. The public largely backs the offensive, but support could evaporate if civilians are seen to be languishing in misery. The vast majority of people forced to flee their homes are living with host families - often complete strangers.

"We are very worried that the international community will not be able to respond to the dramatic dimension of this problem," Guterres said. "And not doing so (will) risk increased factors of instability in an area where more than 2.5 million people are being received by host communities that are not rich.

"You should not forget that less than 20 percent of the displaced are in camps. More than 80 percent are living with families and this represents a huge problem to an area that also sustains 1.8 million Afghan refugees and an area in which the economic situation is extremely, extremely dire."

The United Nations launched an overall appeal for Pakistan last month for $543 million, but has only received about a quarter of this.

Guterres said the problems in financing operations in Pakistan highlighted the need for a fresh look at humanitarian funding.

"If you look at humanitarian funding it is really a drop in the ocean and I believe it would be useful to review the whole system and the way it works," he said.

"(I'd like to see) more predictable funding. In the U.N. you have many areas where funding is guaranteed, for instance peacekeeping operation ... Humanitarian action has only voluntary contributions."

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