article irfan mufti

8/8/2019 Article Irfan Mufti

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EconomicCostofFloodinPakistanIrfanMufti

Withmonsoonalrainscontinuing,theworstflooding inPakistan in80years isstillspreading.Pakistani

relieforganizations

and

government

agencies

are

stretched

to

the

limit.

Yet

despite

urgent

appeals

from

theUNandotheraidorganisations,the levelof internationalaid ispitiful,evenmeasuredagainstthe

limited assistance donated in other recent disasters. The flash floods in several parts have already

damagedcountryseconomyandwill leavemarkson thecountrysagricultureandeconomicgrowth.

According to the early estimates more than 20 million people (almost 13% of the countrys total

population);including9millionchildrenaredirectlysuffering.Thisfiguredoesnotincludethosethatare

now indirectlybearingtheburden.This is inallcounts isthe largesteverwatersplash inthe64years

historyofPakistan.Themajorfloodsof1973(lessthan5millionpeople)1976(5.7millionpeople),1992

(10million),2005 (8million)and2010 (20millionaffectedpeopleasofAug15)prove thepoint.The

enormityofthedamagecanbejudgedfromthefactthat10.51peopledisplacedmorethan3000dead

(theactual

count

will

be

known

later

once

the

water

will

recede)

many

deaths

are

likely

to

be

unrecorded. In the last64yearsamongtenbiggestnaturaldisasters inPakistan that includes floods,

droughts,earthquakesandstormsthiswatertragedybyfaristhelargesteverdisasterhappenedtothis

country.

TheSwatValleyintheworstaffectedprovinceKhyberPakhtunkhwa(formerlytheNorthWestFrontier

Province)is cut off, trapping an estimated 500,000 people.Most have received no relief supplies,

exceptsmallquantitiesbeingtransportedintotheareasbyfootordonkey.Inotherpartsofthecountry,

floodingisthreateningmajorcitiesandtowns.

Atthemomentmorethan10.5millionpeopleareonthemoveontheroadsofthiscountrylookingfor

refugeand

shelter.

A

very

small

fraction

of

this

population

has

so

far

found

shelters

in

government

facilitiesortemporarycampssetupbyNGOsandphilanthropists.Majorityofthisdisplacedpopulation

isstilllivinginopenfieldsandwithoutpropershelter,food,medicinesorprotection.Mostofthemake

shiftcampsarewithoutessentialservicesandpoorlymanaged.Governmentschoolsareusedtocamp

displacedpopulationandmostofthesebuildingsarealreadyindilapidatedconditionsandcannothouse

victimsfora longtime.Thegovernmentandhumanitarianagencieshavenotbeenabletosetuptent

facilitiesthus increasingrisksofshocksandvulnerabilities.Thefood,medicines,water,nonfooditems

andtemporarysheltersprovidedbygovernment,NGOs,philanthropistsandinternationalgroupsarefar

lessthanthedemand.Itispredictedthatthetraumaisstillnotoverasmoremonsoonispredictedand

willaddmorevolumeofwaterintheriversystem.

ItissaidthatthetotalvolumeofwaterintheIndusriverwatersystemisnotexceptionallyhighforthe

river system to absorb. Thedisaster happened becauseof lack of attention tomaintenance of river

embankments, siltingof riverbeds,weakwaterprotection infrastructures,massivedeforestationand

unplannedsettlementsinriverineareas.Allthesefactorscontributedagreatdealintheongoingordeal

ofthepeople.Levelofpreparednesstocopewiththe impendingdisasterwasvery low.Thoughthere

are severaldisastermitigationandmanagement systemsandauthorities setup in last fewyearsbut


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theirperformanceisfarbelowthanexpectedstandards.Ironicallymostofthepeoplethatwereeither

forced to leave houses unalarmed orwith prior notice did not knowwhere to go for shelter, food,

medicines and other basic facilities. No government information facilities were setup or prior

arrangementswere ensured.Mass exodus from flooded cities further chokednationalhighways and

nearbycitiesandtowns.

Tragicallythefloodhitthemostfertilefoodgrowingareas.Gilgit,Swat,Charsada,Swabi,Nowsherato

Larkana,DaduandMatiariare food growingpockets and contribute a reasonable share in countrys

foodandgraineconomy.Major lossesofcrops,orchards,cattle, fodder,cottonandothermajorcash

cropswillhaveaserioussetbackontheeconomy.Thiswillcreatefoodscarcityandinsecurityformany

in comingmonths. Some of these crops are export oriented and countrywill face decline in export

earnings.

Flood also causeddestruction to railwaynetworks, roads,barrages, canals, village infrastructure and

otheressentialfacilitiesinthecatchmentareas.Transportationofgoodsandpeopleisalreadyeffected.

Ithasalsodestroyedbuildings,factories,warehousesetcandcloseddownworkintheseplacesdueto

which not only the workers will suffer but also the industries will suffer. In coming months the

government has to invest huge amount of funds and manpower in rehabilitation of people and

industries,whichwillcausetheeconomytosufferatthenationallevel.

Themassdisplacementofpopulationwillirkcitiesscarceresourceandloadnearbytowns.Thoughmost

ofthepeoplethataredisplacedareskilledagriculturelaborandcanbeadjustedasunskilledlaborerin

othersectorsbutitthelaborinagriculturesectorwillbescarce.

Inpreviousyearsthefloodsdamages/lossasapercentageofthetotalGDPvaluewassignificantduring

followingyears.LossaspercentageofGDPvaluewas3.04 in1973,5.09 in1976and2.60 in1992. If

damagedue

to

cyclones

and

storm

surges

were

taken

into

account,

the

overall

loss

as

apercentage

of

GDPwouldbemuchhigher.ItmaybenotedthattheGDPvaluesareatconstant1985prices.Estimates

oftheeffectoffloodlossontheGDParebasedonstaticabsolutefiguresoffloodloss.Thestructuresof

the flooddamage lossesand their relativeweightage to totalGDPhavenotbeen taken intoaccount.

However, the estimates provide a notional indication of the impact of flood damage/loss on the

economy.

ItmaybementionedthatfloodscauselossesbothtotheGDPandtothecapitalstockandthushamper

thegrowthpotentialofthecountry.Moreover,theselossesalsohavelongtermimpactsonthemacro

economy.The longterm impactswillbe twofold:capitaldamages inducea lowerGDP in subsequent

years

(to

the

extent

of

investment

losses);

and

output

losses

(caused

during

the

flood

affected

year)

lowerincomesandpossibly,reducesavingsavailableforfinancinginvestments.

Inaddition,therewillbeenormoussocial lossesduetothisflood,the impactofwhichonthemacro

economyismuchmorethanmicroeconomiclossesintermsofacceleratingthegrowthpotentialofthe

economy. However, as yet there is no comprehensive source that provides information/analysis of

possiblemacroeconomicimpactofcurrentfloodlosses.


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ThegovernmentwasalreadyfacingwidespreadhostilityoveritsproxywaronbehalfoftheUSagainst

Islamistmilitants,and the countryseconomicand social crisis.Now the floodshavewipedout large

areasof crops,destroying the livelihoodsofmany farmersand leading tohigher foodprices.As the

floodingworsens,angerandprotestswillinevitablyspread,compoundingthecrisisofafragileregime

Despitethe

immense

scale

of

the

disaster,

international

aid

is

only

trickling

in.

As

of

early

this

week,

accordingtotheUNsfinancialtrackingsystem,thefundscommittedbygovernmentstotaledlessthan

$US45million,withanadditional$91millionpledged.

Thegovernmenthasso far failed tomobilizeexternalanddomestic resources tomanage theeffects.

Thisdelaywilllimitgovernmentabilitytorestorehumansettlements,rehabilitateagricultureandrural

economy, rebuild infrastructure, provide safe and timely return and recovery of these people and

reduce strain from urban centres. All thesewill be contributing factors inmultiplying shocks of the

disaster.Governmentcredibilitydeficitand lackoftrustoffunders isworrisomefactor.Thesheersize

and scale of devastation requires much higher level of support failing to which will weaken the

governmentscapacitytodealwiththedomestic issuesmainlyterrorism,recession, inflationandhigh

scale of unemployment. It is much needed that all stakeholders including donors, investors,

humanitarianassistanceorganizations,aidconsortiumsandothereconomicpowersmust invest inthis

timeofcrisistoavoidanyunduespilloverofthissituation.Itisneededthatgovernmentinvitesallkey

stakeholders to aplatform anddevelopdisastermanagementplanwith greaterparticipationof civil

societyandeffectees.Allemergency,relief,earlyrecovery,rehabilitationandresettlementeffortsmust

bedoneoutside theambitofusualgovernmentstructures.Onlyan independentcommission leadby

crediblepersonalitiescanensuregreaterparticipation,trustandoptimumresultsoftheseefforts.

In themeantime the governmentmustdemonstrate its politicalwill to support. Ithas to put these

peopleasitsfirstpriorityandshiftothergovernmentagendasinthesecondlist.Sofarthegovernment

hasfailed

to

show

its

resolve

and

leadership

in

tackling

the

problem.

The

present

disaster

will

also

be

a

test forthepresentpoliticalgovernmentasmosteffecteesarealsothevotersoftherulingpartyand

rightlyexpectingurgentandsubstantivesupport.Governmenthastocutdownonitsexpenses,mainly

nondevelopmentexpendituresanddiverttheseresourcestothemuchneededreliefandrehabilitation

of these20millionpeople.Failing towhichwillhaveserious repercussions for thecountryaswellas

presentgovernment.

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