Tue. Sep 27th, 2022
Pakistan's already struggling economy takes a hit from the recent rain

The cries are becoming more piercing. After the worst flooding in years, Pakistan needs aid badly and quickly.

Former Pakistani ambassador to the United Nations and the United Kingdom Maleeha Lodhi said to the BBC, “This climatic tragedy could not have arrived at a worse time when Pakistan’s economy was already reeling with a balance of payments problem, mounting debt, and skyrocketing inflation.”

Pakistan's already struggling economy takes a hit from the recent rains

She also warned that if the country does not receive debt relief, the economy could “tank.”

Nearly 1,500 people have died, and about 33 million have been impacted by the catastrophic rain that has swamped significant portions of the country and has been connected to climate change.

The extreme weather has destroyed houses, roads, railways, crops, livestock, and ways of life.

Officials now estimate that the record floods may have cost as much as $40 billion (£35 billion), with agriculture accounting for nearly a quarter of Pakistan’s economy.

After unprecedented rains, dengue fever cases have skyrocketed in Pakistan.

An estimated 800,000 cattle, a significant source of income for rural families, perished in the floods across the country.

Reportedly, farmers who have not had their crops and livestock washed away are running low on feed for their cattle.

A food shortage is imminent, which means additional suffering is expected.

According to Sherry Rehman, Pakistan’s minister for climate change, the country has lost over 70% of its onion production, along with rice and corn.

Pakistan exports rice to African and Chinese markets, making it the fourth largest rice exporter worldwide.

With so much farmland destroyed, the wheat harvest is in jeopardy, a staple food for nearly every Pakistani family.

Already high costs have been pushed further higher by the ongoing conflict in Ukraine, a prominent worldwide provider of essential commodities, and the subsequent disruption of the global food supply chain.

Images document the massive degree of destruction caused by recent floods in Pakistan. Our entire night was spent fleeing the rising water.

As previously reported, Pakistan’s inflation rate was above 24% before the floods, and some prices have increased by as much as 500%.

The government may have to import food to feed the people and raw materials for industry, but the country’s foreign reserves were already low before the crisis hit.

The cotton grown in Pakistan is used in the country’s textile sector. Manufacturers are also preparing for the lack of this.

Finance Minister Miftah Ismail vowed on Sunday that Pakistan would “absolutely not” fail on its debt obligations despite the devastation caused by the recent floods.

Mr. Ismail added that over $4 billion (£3.5 billion) in foreign financing had been secured from institutions such as the Asian Development Bank, the Asian Infrastructure Investment Bank, and the World Bank.

He said about $5 billion would be invested this fiscal year from Qatar, the UAE, and Saudi Arabia.

At the same time, Pakistan’s central bank said that a $3bn deposit originally due in December had been extended for another year by the Saudi Arabian development authority.

On Sunday, the IMF also announced its intention to collaborate with other international organizations to aid Pakistan’s relief and rehabilitation operations.

Tax hikes and budget cuts are just two austerity measures required in exchange for the IMF bailout package approved last month.

S&P Global rating analyst Andrew Wood recently warned that “high inflation, a weaker currency, and tighter fiscal and monetary conditions” stifled expansion. He also mentioned the agency’s assessment that the government’s debt was about 74% of GDP.

“We believe that the financial backing of the International Monetary Fund and other multilateral and bilateral partners is crucial. The foundations of a sustainable economic revival in Pakistan will rest on structural reforms that strengthen the country’s business climate and macroeconomic stability, “As Mr. Wood put it.

Record monsoon season rains and melting mountain glaciers led to floods.

In July and August, the South Asian country saw precipitation levels approximately 190% higher than the 30-year normal. A whopping 466% more precipitation than usual fell upon the southern state of Sindh.

On a recent trip to Pakistan, UN Secretary-General António Guterres blamed climate change for the disaster and called for substantial financial relief.

“I have seen many, many humanitarian tragedies in the world. However, I have never before witnessed such widespread climate-related death and destruction. I am at a loss for words to express what I have seen today: an inundated area three times the size of Portugal, “According to Mr. Guterres.

With entire villages submerged, a public health crisis is imminent, and aid organizations are already assessing the scope of the restoration task.

According to forecasters, additional precipitation is predicted over the next few days, posing a more significant threat to the thousands of displaced people.

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