Economy deluged (The News)

Pakistan’s economy deluged

Floods crisis in Pakistan is an evolving story, where questions like what would be its affect on millions of people and on the economy are being asked by local and foreign journalists. We all know it is too early to assess the full impact of this colossal disaster. But the local and international media and donors are waking up slowly to the rude shock that it is a much bigger calamity than any witnessed by Pakistan in the last 80 years. Last flood of this magnitude in what is Pakistan today was in 1929.

But 80 years ago the population that lived along the course of the rivers that flow through Pakistan was perhaps 10 to 15% of what it is today. The growing population has hardly left the fertile land along these rivers that has no habitation. This has resulted in the displacement of around two million people and inundated around 2 to 3 million acres of agriculture land in all the provinces.

The first victim of heavy rains was Balochistan. The strong flash of rain-water that flows from the mountain caused immense damage to the small villages. Most of their agriculture and livestock were washed away. But once the heavy rains followed by angry rivers swept Khyber Pakhtunkhwa everybody forgot Balochistan’s remote villages. Balochistan government has been painfully slow in reaching the affected areas with the relief goods.

In Punjab, Agriculture Secretary, Arif Nadeem says according to the preliminary estimate around 1800 villages are flooded and over 1.4 million acres of agriculture land has come under water. He said that the “break-up of the flood affected agriculture land is: 650,000 acres of cotton fields; 134,000 acres of rice; 128,000 acres of sugarcane; 200,000 acres of fodder; and 14000 acres of vegetable.”  “Because of a shortage of fodder,” he added “the prices of livestock have fallen in Punjab by almost one-third.”

Sindh Agriculture Secretary, Agha Jan said that it was too early to access the damage to the crops in Sindh at this stage because the flood water is passing through the province. But he added “one thing is certain that the rice crop of three districts – Shikarpur, Jacobabad and Kashmore – has been destroyed.”

What is clear from these preliminary reports is the fact that the shortage of crops would push up the prices and affect the industrial growth also. Devastating floods have dampened all official economic targets for this year. The growth target of over 4% is now history as agriculture, industry and livestock growth is likely to shrink. Hafeez Shaikh’s dream to pull down inflation to the single digit has been now drowned in the flood. But the construction material industry expects sizeable growth once the reconstruction works starts in the country. Some economists say that agriculture would do better in 2011 once the flood water recedes.

The country would need billions of dollars to meet the relief work first. According to a rough estimate to feed the flood affected people for 30 days @ US$ 4 a day around $1.6 billion is required by the country.  We are not talking about the reconstruction of over 500,000 houses damaged by the flood. This number is likely to increase substantially once the flood recedes and a survey is done. It also does not include the cost of infrastructure reconstruction which has washed away in the entire country. Government officials on the ground agree that it would take Pakistan 4-5 years to recover. The first slash is likely to come on the Rs600 billion federal and provincial development budgets for the current year. UN has asked for $460 million dollars on the basis of its initial flood devastation estimates. The World Bank and ADB have been tasked to prepare short and long term plans for the rehabilitation and reconstruction.

The good thing is that the philanthropic Pakistan is waking up. Individuals are contributing to the people and NGOs doing relief work in the affected areas. Corporate sector is donating directly either to reputed NGOs which are working in the flood affected areas or are partnering with NGOs to adopt an area.  According to a report pouring in so far Jehangir Tareen, who is an industrialist and known corporate farmer, has adopted Rahimyar Khan — a good model to follow by other big business magnates. Coca Cola, GSK, Reckitt Benckiser, Getz Pharma, LTC, PTC, Continental Biscuits and many other companies are now donating to the NGOs for relief work.

Although the government is engaged in the relief and rescue work, the credit is only scored by the Army in the media. The fact that is overlooked by the media is that they are called in by the government for assistance in such calamities and relief work and are funded from the civilian budget – the taxpayers’ money. Army should get the credit of doing its duty efficiently but as an institution that is a part of the government.

And lastly, the question is that why in many places the dykes and canal gates broke down when every year billions of rupees are allocated to maintain the irrigation system of the country? Large amounts were also spent on the flood protection programme of the Federal government which was implemented by the respective provincial irrigation departments. This reminds me of the allegation made by the former Sindh Irrigation Secretary at a seminar. He alleged that 67% of the funds for the upkeep of the irrigation system actually go for the lavish upkeep of the officials of the department. (

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