By Syed Fazl-e-Haider
KARACHI – The scale and cost of the flooding disaster in Pakistan, rated by as the the worst devastation he has ever seen, look set to worsen even further. More heavy rain is forecast for the Punjab and a fresh flood wave is head south down the Indus River.
Ban at the weekend appealed for more help from the rest of the world. He said the UN will allocate a further US$10 million from its Central Emergency Response Fund, bringing its contribution to $27 million since the crisis began. On Friday, the UN said it had received only 20% of the $460 million it needs to provide aid to the 20 million people who have lost homes, farms and livelihoods. An estimated 1,600 people have been killed.
Among other donors, India on Friday offered $5 million in aid to Pakistan, the Express Tribune reported, citing Press Trust of
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India. External Affairs Minister S M Krishna called Pakistan’s Foreign Minister Shah Mehmood Qureshi and offered aid of $ 5 million in “this hour of need”, the report said.
Agriculture, which accounts for more than 21% of gross domestic product (GDP) and employs 45% of the labor force, has been particularly devastated.
“The rough estimate is that there is US$1 billion of losses of crops,” Reuters reported World Bank president Robert Zoellick as saying.
The losses to agriculture and industry may halve the country’s economic growth, to as low as 2% compared with a 4.5% target for the year ending next June 30, Finance Secretary Salman Siddique said on Friday. The losses at household level of seeds and other agricultural inputs could also have a negative impact on planting of the 2010-11 season due to start in October-November.
Future overseas sales of textiles and rice, key earners in the already fragile economy, will be hit. The floods have damaged 700,000 hectares of crops, mainly rice, maize, cotton, and sugarcane, causing 250 billion rupees (US$2.9 billion) of agricultural losses.
“Rains also destroyed 500,000 tonnes of wheat, 300,000 acres [121,000 hectares] of animal fodder and 100,000 head of livestock,” Bloomberg reported Mohammed Ibrahim Moghul, chairman of Agri Forum Pakistan, as saying.
Pakistan is the Asia’s third-largest wheat producer. The country harvested 23.8 million tonnes of wheat in the 2009-10 crop, against an annual domestic demand of 23 million tones and stocks of more than 28 million tonnes.
Pakistani officials fear that between 30% and 40% of cotton production will be lost, which will force the textile industry to turn to the world markets for their raw product. More than $900 million may have to be spent on cotton imports from the United States, India and Brazil, to make up the shortfall.
Shipments of rice from the country, the third-largest supplier, are likely to slump. Crops and stockpiles in areas that represent 90% of the country’s output have been damaged. Before the flooding, the country was to ship 3.8 million tonnes of rice this year, more than 10% of the estimated global shipments of 30.4 million tonnes. Punjab accounts for nearly 60% of the country’s rice harvest, and Sindh 30%. Large tracts of both provinces are now flooded.
About 2.3 million bales of cotton have been damaged, against a production target for the 2010-11 season of 15 million bales. Just under 900,000 bales were exported in 2009-10.
“Demand for cotton from India, the second-largest grower and shipper, may increase because of the damage in Pakistan,” Bloomberg reported, citing a report by FCStone Group, a commodities risk intelligence firm.
Pakistan’s output of refined sugar, a staple for many households, could fall by 500,000 tonnes. That will further help to drive up inflation, weakening even more the purchasing power of millions of the largely impoverished 170 million population who barely get by from day to day.
The Consumer Price Index (CPI) rose to 12.34% in July from a year earlier, “primarily because of an increase in prices of food items,” Reuters reported, citing Ayub Ansari, an analyst at Invest and Finance Securities Ltd, who added, “Going forward, inflation is going to remain a serious concern.”
An estimated 77 million people go hungry in the country, with their plight earlier exacerbated by drought-like conditions that reduced crop yields in late 2009 and early 2010, according to a report by Washington’s Woodrow Wilson International Center for Scholars.
Despite being an agricultural country, Pakistan has to import many food items, and the government over the past decade or so has paid little to no attention to development of the sector. The population has increased 24% in the past 10 years and agriculture production has gained only 5%.
Syed Fazl-e-Haider (http://www.syedfazlehaider.com) is a development analyst in Pakistan. He is the author of many books, including The Economic Development of Balochistan (2004). He can be contacted at email@example.com.