1pc GDP at risk from floods

The Pak Banker - - 4EDITORIAL - Nasir Ja­mal

GHU­LAM Nabi came to La­hore along with his younger brother around 10 months ago af­ter the Chenab had dev­as­tated his vil­lage in Hafizabad dis­trict last Septem­ber. "Each of our pos­ses­sions - a mud house, a buf­falo, crops, clothes etc - were swept away in the flood wa­ters," he rem­i­nisces. "We were left with only debts to pay off."

The gov­ern­ment did put some cash in his pocket, but that wasn't enough for the fam­ily of eight to start over. "Our vil­lage is very close to the banks of the Chenab and is vul­ner­a­ble to floods. Most vil­lagers have nowhere to go to as ad­vised by the dis­trict ad­min­is­tra­tion through an­nounce­ments from the lo­cal mosque," Nabi says. The World Bank es­ti­mates that Pak­istan has suf­fered losses in ex­cess of $18bn be­cause of nat­u­ral dis­as­ters in the last one decade

Ac­cord­ing to the Na­tional Dis­as­ter Man­age­ment Au­thor­ity (NDMA), more than 2.5m peo­ple were af­fected, mainly in Punjab, due to last year's del­uge in the Chenab and Sut­lej rivers, which claimed 367 lives, washed away crops spread over 1m acres, and par­tially or com­pletely dam­aged about 130,000 houses.

Many small non-farm en­ter­prises and man­u­fac­tur­ing and pro­cess­ing busi­nesses were also af­fected and liveli­hoods swept away. The NDMA had es­ti­mated the cost of the re­cov­ery ef­fort at around $439m. The ac­tual cost of the losses re­sult­ing from the floods is not yet known - and may never be known - as a sig­nif­i­cant num­ber of peo­ple af­fected by the floods find it dif­fi­cult to start over. "Anec­do­tal ev­i­dence sug­gests that a large por­tion of the pop­u­la­tion af­fected by the floods since 2010 has not been re­ha­bil­i­tated," says Ali Sal­man, the ex­ec­u­tive di­rec­tor of the Pol­icy Re­search In­sti­tute of Mar­ket Econ­omy (Prime). "Many re­main with­out shel­ter and jobs, and some have shifted to the cities to find liveli­hoods."

Sal­man says floods re­sult in longterm food in­se­cu­rity for the af­fected pop­u­la­tion, in­crease poverty, dis­rupt sup­ply chains, push prices and elim­i­nate jobs. "A ma­jor­ity of the af­fected fam­i­lies find it dif­fi­cult to re­cover from the im­pact of such dis­as­ters. If su­per floods hit, the im­pact on the macroe­co­nomic and fi­nan­cial sta­bil­ity of a coun­try like Pak­istan can be even more se­vere and last­ing."

The World Re­sources In­sti­tute (WRI) says Pak­istan falls 5th on the list of top 15 coun­tries that ac­count for 80pc of the pop­u­la­tion ex­posed to river­flood risk world­wide.

It es­ti­mates that just a lit­tle less than 1pc of Pak­istan's GDP is ex­posed to river floods ev­ery year. It is ranked 16th by the WRI on the list of the top 20 coun­tries with the high­est GDP ex­po­sure to river floods.

Ever since the su­per floods hit al­most one-fifth of the coun­try's area and dis­placed more than 20m peo­ple in 2010, parts of Pak­istan have regularly ex­pe­ri­enced flash floods. And while most of the coun­try, ex­cept parts of Khy­ber Pakhtunkhwa and Gil­gitBaltistan, has es­caped the floods so far this year, the NDMA says over half a mil­lion peo­ple have been im­pacted by them. In to­tal, 801 vil­lages have been af­fected and 2,058 houses dam­aged.

A farmer and gin­ner from Rahim Yar Khan, Seth Mo­ham­mad Ak­ber, fears cot­ton crop losses be­cause of tor­ren­tial rains in south Punjab. "The cot­ton fields are un­der wa­ter. The crop will be ir­repara­bly dam­aged if the wa­ter doesn't dry up soon. The crop losses could in­crease man­i­fold if the cot­ton belt in south Punjab and Sindh is hit by floods in the weeks to come, as feared by many."

The World Bank es­ti­mates that Pak­istan has suf­fered eco­nomic losses in ex­cess of $18bn be­cause of nat­u­ral dis­as­ters in the last one decade since the mas­sive earth­quake hit KP and Azad Kash­mir in 2005. The 2010 floods alone had cost the econ­omy around $10bn. The World Bank re­port - Fis­cal Dis­as­ter Risk Op­tions for Pak­istan - re­leased ear­lier this sum­mer says that ap­prox­i­mately 3m Pak­ista­nis on av­er­age, or about 1.6pc of the pop­u­la­tion, are af­fected by nat­u­ral catas­tro­phes each year. Ac­cord­ing to an anal­y­sis of his­tor­i­cal nat­u­ral dis­as­ter data, since 1973 around 77pc of all the peo­ple af­fected by nat­u­ral dis­as­ters were im­pacted by flood­ing events.

"Pak­istan faces a ma­jor fi­nanc­ing chal­lenge aris­ing from nat­u­ral catas­tro­phes, with flood­ing caus­ing an es­ti­mated an­nual eco­nomic im­pact of be­tween three and four per cent of the fed­eral bud­get," adds the re­port. It es­ti­mates the an­nual eco­nomic im­pact of flood­ing at be­tween $1.2bn and $1.8bn, or 0.5-0.8pc of GDP.

Sim­u­la­tions show that a ma­jor flood event - oc­cur­ring, on av­er­age, once ev­ery 100 years - could cause losses in ex­cess of $15.5bn, which equates to around 7pc of GDP and al­most 40pc of the fed­eral bud­get. Both the WRI and the World Bank say the size of Pak­istan's GDP that is ex­posed to floods will con­tinue to rise as its pop­u­la­tion and as­set bases in­crease.

Nat­u­ral dis­as­ters like floods also have a so­cial cost that no study has ever mea­sured in the coun­try, con­tends Shahid Zia, an eco­nomic an­a­lyst from La­hore. "Floods and earth­quakes of­ten dam­age or de­stroy schools and health fa­cil­i­ties in the af­fected ar­eas, re­duc­ing the ac­cess of the af­fected pop­u­la­tion to ed­u­ca­tion and healthcare. More­over, most par­ents stop send­ing their chil­dren to school be­cause they can no longer af­ford to. If you visit the flood-af­fected ar­eas, you'll find more chil­dren work­ing to sup­port their fam­i­lies."

He is sorry to note that suc­ces­sive gov­ern­ments have failed to pro­tect the peo­ple ex­posed to floods de­spite re­peated flood­ing in the coun­try. "Our gov­ern­ment is fo­cused more on eye­catch­ing de­vel­op­ment projects than on build­ing de­fence against floods to pro­tect the poor, who are ex­posed to the risk of los­ing their lives, shel­ter and liveli­hoods."

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