Economic Damage Caused by Flood

Dr Zafar Mueen Nasir is a doctorate from Kansas University USA. He currently holds the position of Chief of Research and Dean/Head, Department of Business Studies, PIDE.

A forum was organised under the auspices of World Times in which students of Business Studies Department of Pakistan Institute of Development Economics (PIDE) Islamabad, expressed their views on ‘Economic damage caused by flood’ to different sectors and their impact on our economy.

The students justified their arguments by quoting various facts and figures taken from reliable sources like Asian Development Bank (ADB), World Bank (WB) and the official websites of the government of Pakistan. Moreover, their arguments show in-depth analysis of the devastation that has no parallel in the history of Pakistan. They also gave some suggestions to the government and policy-makers.

Before initiating the debate, Dr Zafar Mueen Nasir, the head of the department of Business Studies of PIDE, introduced the topic to the students. He said, ‘Recent flood is the largest-ever natural calamity faced by Pakistan. In fact, this trauma has affected all of us as a nation.

So everyone is aware of it and we especially observed this entire catastrophic tragedy directly and indirectly. Actually, this flood was also a lesson for us principally for the economists and future corporate leaders because we see it from a particular angle. There is no doubt that all natural disasters have an economic cost that ultimately put pressure on the economy.
Moreover, this disaster has many impacts ‘social, political, psychological and economic. We are here to understand the dynamics of this flood, particularly the economic damage caused by it and the ways to come out of the crisis.

Hameed looking confident said, ‘We all know about the economic loss that has been colossal. In fact, the GDP rate was four per cent prior to flood which turned into negative ranging-2-5 and the external debt of $55 billion also set to increase, the textile sector is badly hit too.

According to a report of the International Labour Organisation (ILO) more than 5.3 million jobs have been lost due to flood. So, a productive and job-oriented programme is needed to overcome the rate of unemployment. I also want to suggest that the government should form a committee of renowned economists to review the situation and suggest remedies.

Nyla Ashraf  highlighted another dimension of flood. She said, ‘Flood brutally damaged the infrastructure. There is close down of work in the catchment areas due to suspension of major facilities of communication like railway, roads, highways, bridges, canal breakage, villages infrastructure and ware houses.

Moreover, in the telecom sector 1.8 billion rupees have been lost. According to the reports of Ministry of Information Technology (IT), Multi-net suffers 600 million rupees and PTCL faced loss of 164 million rupees, including damage to fiber optic networks. While all cellular companies faced an approximate loss of 926.6 million rupees. Now we have to recover and for that we need appropriate allocation of resources. Realistically, I think there is no scarcity of resources and we only need to allocate them properly in a transparent manner without any prejudice to all flood-affected areas.

Mahnoor Tasneem threw light on the public sector damage. She said, ‘The public buildings damage caused by flood is worth $1 billion. It is estimated that 2433 miles of highway and 3508 miles of railway track were completely damaged and the cost of highway damage is $158 million and railway damage is worth $131 million approximately.

In fact, Karakoram Highway, which is major trade route between Pakistan and China, has been closed down due to collapse of bridges. This damage is the result of lack of dams and improper maintenance of river and canal system.

M.Rehan Najeeb looking energetic said, ‘Shelter is basic need of everyone but unfortunately our many brothers and sisters lost their homes in the flood. Now many of them are shelterless so I would like to share some statistics about damage caused to the housing sector.

According to a report of ADB, almost 608184 houses were damaged and most of them were in the rural areas. In fact, the government failed to provide shelter to homeless people. The flood not only damaged their homes but also their lodging and all important luggage. This flood was a natural disaster and our nation sacrificed a lot but now being part of this nation it’s our prime and national duty to help our needy brothers and sisters especially those who lost their lifetime earnings in it.

Maryam Qadeer said, ‘I would like to highlight the damage caused to the health sector. The total number of health units of all category in AJK were 616 out of which 39 got damaged, in Balochistan total number of health facilities were 1075 and out of which 45 suffered damage, in Sindh total number was 1335 and 145 got damaged and in Punjab their number was 2891 out of which 57 faced damage.

Furthermore, due to flood few epidemics also erupted. First is respiratory infection caused to 964000 people with acute diarrhea, while malaria fever also came by using impure and unhygienic water and affected a big chunk of people? In fact, according to a report of the World Health Organisation (WHO), about 10 million people in Pakistan are drinking impure water. I think it is big challenge for the health sector and it would surely increase burden on economy but we have to face it.

Adnan Rauf looking elegant elaborated the damage occurred to the education and health sectors. He said, ‘Approximately 10457 educational institutes are damaged by flood of which 3041 are fully damaged and 6566 partially. However, $111.3 million is the estimated cost of this damage and $504.8 million is required to recover as determined by the WB and ADB. Moreover, total damage caused to the energy sector is $309 million which includes both power and petroleum sectors. In fact, Pakistan needs $106 million to recover in this sector while 49 per cent of the total damage is to be recovered from the insurance companies.’

Junaid Madni, another student of MBA threw light on the agriculture sector. He said, “No doubt, horrible flood has shaken the economy as a whole but agriculture sector sustained the most acute damages although condition of this sector is already poor.

According to the ADB about 2.1 million acres land is directly affected but destruction varies province to province. Sindh faced the most drastic loss. 46 per cent of standing crops are completely vanished. Similarly in Punjab 36 per cent of standing crops disappeared and same followed by Khyber Pakhtunkhwa and Balochistan eight per cent of the crops gone away. Adding to this, 43 per cent of our population is engaged in the agriculture sector and 22 per cent of national income of Pakistan is contributed by agriculture. Now, one can well examine that how a severe setback we experienced.

Usman Khalid said, ‘From July 27, 2010, when flood started the livestock and fisheries faced a major setback. It is estimated that the damage of large number of animals is about 315600 and 128300 small animals. In fact, poultry sector has damage at broader level comprising more than one crore poultry heads and this huge loss may cause scarcity of food items in the country. In my vision, we need a comprehensive management to recover our economy.

Abdul Basit last speaker spoke realistically. He said, ‘My friends already highlighted almost all the economic damage caused by flood, but here I would like to give some suggestions to the government.

First of all, a proper and transparent audit of foreign aid should be conducted and details of this audit must be published for the convenience of people. Secondly, this flood exposed the abilities of the government for handling any natural tragedy. People of Pakistan should be careful about their future and must elect sincere leadership for the next time.

At the end another faculty member Nyla Perveen summed up the debate. She said, ‘In my opinion relief and rehabilitation will depend upon sustained coordinated efforts in which all the stakeholders should be taken on board along with the local community. Similarly, international donor agencies should also work together with the local community.

Secondly, I would emphasise that everyone should have uniform access to the relief aid and in the rehabilitation process, without any ethnic discrimination and political prejudice. Lastly, I must say, we need a comprehensive, workable and sound strategy for the revival of our economy. Thank you!