Flood losses may cross $40b

ISLAMABAD: Pakistan on Monday feared that floods might have caused over $40 billion in economic losses and damages as the National Flood Response Coordination Centre (NFRCC) dismissed the initial assessment of $18 billion.
The $40 billion losses were flagged in a flood response centre meeting during discussion on an interim report titled “An Early Assessment of Flood Impact on Pakistan’s Economy”, presented by the Ministry of Finance.
Planning Minister Ahsan Iqbal heads the NFRCC – a joint civil-military body set up to monitor and coordinate relief and rehabilitation work. “The devastating conditions suggest that the scale of flood losses is in the range of $30 billion to over $40 billion,” said Iqbal, Chairman NFRCC, while talking to The Express Tribune.
It is for the first time that the $40 billion loss estimate has been given, which is three times more than the initial estimate of $10 billion to $12 billion. The new number is even far higher than the $30 billion figure given by United Nations Secretary General Antonio Guterres last week.
“We are going through the process of a comprehensive assessment of flood damages with the help of World Bank, Asian Development Bank, provincial and federal governments,” said Iqbal.
Although a detailed report of losses would be ready in four to six weeks, initial assessment would be finalised by the end of this week, said the NFRCC chairman.
The planning minister said that the finance ministry had presented an initial assessment of flood losses, which was based on predictive analysis but the model’s outcome would depend on what input was fed into it.
“NFRCC has directed the Ministry of Finance to withhold the release of its flood impact report,” he added. “We will wait for the outcome of comprehensive assessment but damages are colossal and even more than $30 billion as suggested by the United Nations secretary general,” said the NFRCC chairman.
He said that major infrastructure had been destroyed in Sindh, particularly Mainline-I Sukkur-Hyderabad section of Pakistan Railways that would now require complete rehabilitation. “The start of ML-I project is now compulsory,” he added.
Pakistan has been struggling since 2016 to begin work on the $7 billion ML-I project with $6 billion in Chinese lending. But the project is not moving forward due to many obstacles, including the limitations imposed on new sovereign guarantees under the IMF programme.
The finance ministry’s initial assessment report showed that economic losses were around $18 billion. Gross domestic product (GDP) growth would drastically slow down in the range of 1.2% to 1.7% in the current fiscal year, it added. Before the floods, the Ministry of Finance had targeted 5% economic growth.
“The loss of $18 billion was our initial assessment, which can now be anywhere up to $30 billion once numbers are firmed up,” said Dr Aisha Pasha, Minister of State for Finance, while talking to The Express Tribune. She said that once complete data was available, the government would be able to quantify the losses.
The IMF will consider any relaxation in Pakistan’s $6.5 billion bailout programme on the basis of a credible assessment of losses.
Over 33 million people have been affected by the floods who immediately require assistance, far more than the initial Rs25,000 cash handout.
The Ministry of Finance’s suggested approach is that the government should immediately start a cash-for-work programme in the affected areas aimed at providing livelihoods to the people, according to a senior government official. It was in favour of giving interest-free loans for crops and livestock.-Agencies