PDNA report estimates $16.3 billion for post-flood reconstruction

ISLAMABAD:

Pakistan needed at least $16.3 billion for flood rehabilitation and reconstruction, a new post-disaster needs assessment (PDNA) report revealed on Friday.

The PDNA report, released by government officials and international development institutions, put the cost of the floods at $30.1 billion – $14.9 billion in damages and $15.2 billion in losses.

The figure is $2.2 billion lower than originally announced by the government at a donor roundtable in the United States earlier this month. The scope of the report is limited to 94 affected districts, excluding areas that were affected by floods but not declared disaster areas.

“Pakistan will need a minimum of $16.3 billion for rehabilitation and reconstruction, which is based on what the government and the international community can do for people affected by the floods due to limited resources” ,

Planning Minister Ahsan Iqbal said at the launch ceremony.

The sector that suffered the most damage was housing, with $5.6 billion in damages and $636 million in additional losses. An amount of 2.8 billion dollars will be required for the rehabilitation of this sector.

The agriculture, food, livestock and fisheries sector also suffered the highest damage and losses, amounting to $13 billion, including $3.7 billion in direct damage. . The government will need $4 billion for rehabilitation and reconstruction.

The transport and communications sector suffered a total of $3.6 billion in damages and losses and its needs are estimated at $5 billion – the highest needs of any sector.

Sindh suffered the most – with $9 billion in damages and $11.4 billion in additional losses, bringing the total cost to $20.4 billion or 68% of the total cost.

Balochistan suffered $4.1 billion in damages and losses, followed by Khyber-Pakhtunkhwa for $1.6 billion and Punjab for $1.1 billion.

Pakistan calls on the global community

At the ceremony, Ahsan Iqbal and Climate Change Minister Sherry Rehman harshly criticized the International Monetary Fund (IMF) and the donor community for their lack of support.

Iqbal called out the IMF and criticized it for imposing fiscal restrictions on Pakistan despite the devastating floods that affected 33 million people.

“The IMF has imposed a condition on Pakistan that it cannot spend even 40% of its own development budget until the last quarter of this fiscal year, which is harsh, unfair and unfair and must be reversed immediately,” he said. Iqbal.

The government had allocated 728 billion rupees under the Public Sector Development Program (PSDP), but 291 billion rupees can only be spent between April and June 2023 if the country is on track to implement IMF fiscal targets.

“Other countries are getting debt relief, but we’ve been asked to appeal for humanitarian aid, which is not the solution,” Rehman said, adding, “We haven’t even been able to serve half of the affected population”.

The minister added that Pakistan would not go around the world with a begging bowl in hand. She stressed that countries must live up to their “moral and financial” obligations.

Iqbal said rich countries must sign debt swap agreements with countries affected by the floods. “Rich nations must fulfill their commitments to contribute $100 billion a year to poor nations to mitigate losses from climate change,” he added.

Finance Minister Ishaq Dar also failed to receive an encouraging response during his recent visit to Washington, with the IMF handing over a list of demands, including the imposition of around 600 billion rupees in new taxes.

“Pakistan is a test case for climate justice…after the launch of the report, the ball is now in the court of the G-20 countries,” Iqbal said, adding that Pakistan’s 20 years of poverty reduction had been swept away in just two months. of rains.
Rehman said the world should not “teach us but rather help us reach” the 33 million people affected by the floods.

“It is certainly important that the reconstruction plan be based on a sustainable financing plan,” said Najey Benhussain, the World Bank’s country director.

Asked about an alternative funding plan if the world does not help, Iqbal said that so far Pakistan has met almost all relief and rescue requirements from its resources, but “we hope that the international community will come up with pledges” at the donors’ conference.

“They promise Ukraine billions of dollars but are not ready to fulfill their moral obligations to Pakistan which is affected by climate change, caused by development in the West,” Iqbal said.

The disaster will have a profound impact on lives and livelihoods, according to the PDNA report. Its preliminary estimates suggest the national poverty rate will rise by 3.7 to 4 percentage points, pushing between 8.4 and 9.1 million people into poverty, as a direct result of the floods.

Similarly, multidimensional poverty will increase by 5.9 percentage points, which means that 1.9 million additional households will be pushed into non-monetary poverty.

Above the national average, poverty in Sindh would increase from 8.9 to 9.7 percentage points, and from 7.5 to 7.7 percentage points in Balochistan. In addition, the depth and severity of poverty will increase for households that were already poor before the floods.

The poverty gap has increased dramatically, with the number of extremely poor people living more than 20% below the poverty line, rising from 18 to 25-26 million.

In addition, recent gains in child and maternal health could be reversed, undermining poverty reduction efforts. There will be an increase in the proportion of households deprived of access to health facilities.

As a result, an additional 5.5 million households with children under 5 will not be fully immunized, putting children at risk of deadly and preventable diseases. An additional 2.8 million households with newborns will be deprived of prenatal examinations and postnatal care.

The 2022 floods caused widespread destruction of housing and human settlements. In the 94 districts affected by the calamity, around 780,000 houses were destroyed and more than 1.27 million houses were partially damaged.

The floods affected approximately 17,205 public schools. At least 6,225 educational facilities were assessed as fully damaged and 10,980 as partially damaged. This affected some 94,478 teachers and 2.6 million enrolled students.

The 2022 floods affected nearly half of the country, damaging 13% of health facilities, which in turn disrupted health service delivery at the community level.

Malnutrition, which was already dangerously high, has increased dramatically.

About 650,000 pregnant women struggle to access maternal services, while nearly 4 million children lack access to health services.

Do more

Pakistan will need to have enabling policies and institutional arrangements for rehabilitation and reconstruction, according to the report. He added two key steps needed to achieve the vision and goals.

First, notification of the activation of recovery policies; and second, finalizing the appropriate institutional and implementation arrangements, according to the report.

Appropriate institutional and implementation arrangements should be based on good governance. Arrangements should include special provisions for strategic oversight and decision-making; coordination, management and monitoring of operations; and transparency, accountability and equity in resource allocation, particularly for priority recovery interventions.

“While targeted relief measures are needed to cushion the human and economic impacts of the floods, delays in fiscal consolidation will increase risks to macroeconomic and fiscal stability in the context of high inflation and fiscal and current account deficits. “, advised the lenders.

Likewise, monetary policy must necessarily be maintained at the current stance, given the overheated economy, extremely high inflation rates and exchange rate depreciation pressures, he added. .

To manage short-term risks, the government must strike a delicate balance between advancing the required fiscal consolidation and meeting targeted relief and recovery needs.

In the context of high domestic and external financing needs, persistent political uncertainties and upcoming elections, it will be essential to maintain market confidence.

It will be essential to maintain a tight monetary policy; pursue fiscal consolidation to the extent possible, including by tightly targeting and prioritizing any new spending; and carry out planned structural reforms, including in the energy sector.

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