Floods Cause Over Rs 400 billion Loss to Pakistan

By Mehtab Haider – 

Floods have impacted 0.6 to 0.7 million bales of cotton during the current season while the production of rice was also impacted to the tune of 12% of total area

The devastating floods have played havoc mainly in Punjab and some other parts of the country, inflicting a colossal financial loss to the tune of Rs 400 to Rs 500 billion to the economy as well as people in affected areas in terms of total infrastructure losses.

According to Multi Sector Initial Rapid Assessment (MIRA) report presented to federal government, the super floods mainly hitting Punjab negatively impacted 2.53 million people, causing 360 deaths, injuring 646 peoples by damaging 4065 villages in different parts of the country. Total damaged housing units stood at 56444 while it caused a loss to 8957 cattle. The losses of roads infrastructure is also massive after housing units.

According to spokesman of National Disaster Management Authority (NDMA), Ahmed Kamal, this flood negatively damaged the country’s food basket Punjab by damaging different crops in 2.41 million acres but it would be premature to give any exact losses to the economy on this front. He said that around 15 to 16 percent housing units in affected areas of floods had been damaged and it was not yet known that how much it would cost to reconstruct them.

He said that after presenting MIRA report before the government, now Initial Rapid Assessment (IRA) would be conducted in five weeks which would pave the way for recovery assessment to estimate losses incurred to agriculture, livestock, housing units and other infrastructure of the affected areas.

When contacted to former finance minister and reputed economist Dr Hafiz A Pasha to ascertain total financial losses occurred in the wake of floods, he said that with thanks of God, the floods did not cause much loss in Sindh areas but it severely damaged five districts of Punjab, mainly in areas of cotton and rice producing belts.

Pakistan’s overall GDP growth, Dr Pasha said, would be impacted by 1.5 percent of GDP, causing a loss in financial terms to the tune of Rs 350 billion, during the ongoing fiscal year. It shows that the country’s GDP will have to be revised downward by 1.5 percent bringing it down from 5.1 percent to around 3.6 percent for 2014-15.

He said that the floods had impacted 0.6 to 0.7 million bales of cotton during the current season. The loss of one million bales could cause a loss of one percent of GDP because of its overall value chains. Similarly, the production of rice was also impacted to the tune of 12 percent of total area. He also pointed out that the wheat stocked at people’s houses was also damaged to the tune of 0.5 million tones in Punjab so overall the GDP growth would be declined by 1.5 percent of GDP in the ongoing fiscal year.

On other hand, the government has decided to undertake Damage Need Assessment (DNA) with the help of WB/ADB simultaneously for having a correct estimate of damages and efforts required for recovery of the situation of flood-affectees. The government is planning to prepare a report on initial assessment of damages by floods and to hold a donor’s conference to engage the donors in the rehabilitation work.

 The writer is an Islambad based economic correspondent. He works for The News