FeaturedNationalVOLUME 17 ISSUE # 47

Floods worsen poverty fears

Recent floods have worsened fears of poverty in the country. A slowing down economy means more people may lose jobs or fail to maintain their present level of incomes in the coming months and their miseries will be compounded by high inflation.

Pakistan urgently requires massive funds to save people from starvation and diseases in flooded areas and at the same time it needs to devise a long-term policy to save them from falling under the poverty line. It is the worst situation the country faces after barely coming out of the bad effects of the pandemic. Pakistan’s economic meltdown is pushing more people below the poverty line as the country has taken tough measures to implement conditions attached to an International Monetary Fund (IMF) bailout package.

According to the World Bank, between six and nine million Pakistanis are set to be dragged into poverty as a result of cataclysmic monsoon flooding linked to climate change. “Pakistan’s poverty rate is expected to rise between 2.5 and 4 percentage points as a direct consequence of the floods. Loss of jobs, livestock, harvests, houses, and the closure of schools — as well as spread of disease and rising food costs — threaten to put between 5.8 and 9 million in poverty,” it warned in its latest report.

The World Bank has estimated some 20pc people among the 220 million population are already living below the poverty line. “Reversing these negative socio-economic effects is likely to take considerable time. Before the deluges began Pakistan’s coffers were already in dire shape, with a cost-of-living crisis, a nose-diving rupee, and dwindling foreign exchange reserves,” it added.

Moody’s Investor Service has lowered Pakistan’s real GDP growth to 0-1pc for the current fiscal, from a pre-flood estimate of 3-4pc. “The floods will affect all sectors, with the impact likely more acute in the agriculture sector, which makes up about one-quarter of the economy. Even if the economy recovers from the floods, the growth next year would stay below trend,” it said in its latest report on Pakistan.

The statement said that the supply shock due to the floods would increase prices further, at a time when inflationary pressures are already elevated. Moody’s expects inflation to pick up to 25-30pc on average for the current fiscal year, compared to a pre-flood estimate of 20-25pc. “Subsequently, social risks might increase as households would face higher costs of living resulting in negative economic and fiscal implications. Moreover, the floods are likely to have long-term negative effects on economic and social conditions. There is already a significant increase in water-borne diseases, and education is again disrupted for many displaced children not long after schooling resumed following the pandemic,” it observed.

According to the government’s own estimate, at least 10 million more people had slipped below the poverty line as a consequence of the pandemic. In a report, the Asian Development Bank (ADB) said that between 1.5 million and 2.3 million young Pakistanis had lost jobs during the pandemic. According to the ADB, the pandemic had pushed an estimated 75 million to 80 million more people in developing Asia into extreme poverty, compared with what would have happened without the pandemic. Progress also stalled in areas such as hunger, health, and education, where earlier achievements across the region had been significant, albeit uneven. According to the report, about 203 million people or 5.2pc of developing Asia’s population lived in extreme poverty as of 2017. Without the pandemic, that number would have declined to an estimated 2.6pc in 2020.

According to the government’s initial estimates, the economic cost of the floods stood at about $30 million. Billions of rupees are needed annually to rehabilitate victims while they can be saved from floods at a much less cost. Pakistan has been suffering floods almost every year for decades but successive governments failed to take steps to mitigate the threat. Billions of rupees are spent for the rehabilitation of flood-hit people but little is spent to prevent deluges which affect people of rural areas almost every year and add to rising poverty in the country.

Pakistan suffers a loss of around $800 million each year. The floods have affected every area of social infrastructure from housing, health and education to irrigation, transport and communication, water supply and sanitation and energy sectors. The agriculture sector, which is a source of livelihood of Pakistan’s major population, is badly affected, followed by the private sector and industries in economic sectors.

India attempts to mitigate damage to its people and land by releasing water into Pakistani rivers. It releases floodwater into the Chenab river with inevitable downstream consequences for communities living along the river bank. Monsoon rains hit Pakistan every year in June and the season normally ends in the first week of September. During this period, the country receives heavy rains which cause flooding. But the government and its departments are always caught off-guard. They not only fail to stop floods but also mitigate the suffering of people. The annual monsoon rains that affect the whole subcontinent are entirely predictable and their effects may be curtailed. But they cause more losses in Pakistan than other countries of the region.

The problem of flooding is worsening every year and poses a significant national threat in terms of the steady economic erosion, loss of livestock and crops and continued destruction of poor-quality housing. The government should come up with an effective mechanism and determination to counter the threat presented by an annual natural phenomenon which worsens the cycle of poverty every year.

Dedicated efforts should also be made to improve the economy, so that more money could be spent for the welfare of the common people.