ISLAMABAD: Early estimates put the damage from Pakistan’s recent deadly floods at more than US$10 billion (RM44.9 billion), its planning minister said on Monday (Aug 29), adding that the world has an obligation to help the South Asian nation cope with the effects of man-made climate change.
Unprecedented flash floods caused by historic monsoon rains have washed away roads, crops, infrastructure and bridges, killing at least 1,000 people in recent weeks and affecting more than 33 million, over 15% of the country's 220 million population.
The climate change minister has called the situation a “climate-induced humanitarian disaster of epic proportions”.
“I think it is going to be huge. So far, (a) very early, preliminary estimate is that it is big, it is higher than US$10 billion,” Ahsan Iqbal told Reuters in an interview.
“So far we have lost 1,000 human lives. There is damage to almost nearly one million houses,” Iqbal said at his office. “People have actually lost their complete livelihood.”
Iqbal termed the recent floods worst than the 2010 in Pakistan, for which United Nations (UN) had issued its largest ever disaster appeal.
The minister said it might take five years to rebuild and rehabilitate the nation, while in the near term it will be confronted with acute food shortages.
To mitigate the shortage, Finance Minister Miftah Ismail said the country could consider importing vegetables from arch-rival India.
The two neighbouring countries have not had any trade for a long time.
“We can consider importing vegetables from India,” Ismail told local Geo News TV, adding other possible sources of food imports included Turkey and Iran.
Food prices have already shot up due to flooded crops and impassable roads.
India Prime Minister Narendra Modi said he was saddened by the devastation caused by the floods.
Pakistan has appealed for international help and some countries have already sent in supplies and rescue teams.
The nation's foreign minister told Reuters on Sunday he hoped financial institutions such as the International Monetary Fund (IMF) would provide financial aid, taking the economic cost of the floods into account.
However, Iqbal said any formal requests for financial help would need to wait until the entire scale of the damage was known, something Pakistan was now evaluating with partners, including the World Bank and the Asian Development Bank.
The Canadian government on Monday announced US$5 million in funding for humanitarian assistance to Pakistan to deal with the flooding.
Iqbal said 45% of cotton crops had been washed away with early wheat sowing in southern Pakistan also affected, as large swaths of land remained inundated with flood water, and severe damage to rice fields as well as vegetable and fruit crops.
Pakistan's finance ministry in its latest economic outlook update has warned of the impact on critical seasonal crops, particularly cotton, which is key for Pakistan's textile sector that makes up more than 60% of the country's exports.
Analysts say the impact could be devastating for the country, which was already in the midst of an economic crisis, faced with high inflation, a depreciating currency and a current account deficit.
Meanwhile, the IMF board approved the seventh and eighth reviews of Pakistan's bailout programme, allowing for a release of over US$1.1 billion to the cash-strapped economy, the fund and the government said on Monday.
The IMF agreed to extend the programme by a year and increase the total funding by 720 million special drawing rights, or about US$940 million as per the current exchange.
In a statement, IMF deputy managing director Antoinette Sayeh said adhering to scheduled increases in fuel levies and energy tariffs is “essential” as Pakistan’s economy “has been buffeted by adverse external conditions”. These include “spillovers from the war in Ukraine, and domestic challenges, including from accommodative policies that resulted in uneven and unbalanced growth”, he noted.
The floods were not mentioned in the fund's statement.
Pakistan's foreign exchange reserves have fallen to levels that cover only a month of exports and its economy is wrangled with a massive current account deficit and high inflation. – Reuters
