Do you wish to know what effects a flood can have on Pakistan’s Economy? Well this article, will let you know about all the effects of floods on Pakistan’s economy.
Effects of Flood on the Economy of Pakistan
With two-thirds of the country affected by water, transportation and delivery of goods are also badly affected, there is no area of life that is directly or indirectly immune from these conditions. The country’s economy, which is already going through a difficult period, has increased fears that the country’s economic problems will increase further due to the current flood situation. Due to floods, the country’s economy has lost more than 2 thousand billion rupees.
According to the Ministry of Finance, the economic growth target of 3.5% will not be achieved due to the flood. The target growth rate has been reduced to 2.3%. Destroyed, support from friendly countries is needed to manage.
Despite the approval of the loan from the IMF, Pakistan’s difficulties have not decreased, due to the significant reduction in the production of important sectors due to rains and floods, domestic exports are likely to be adversely affected. A billion dollars is likely to increase. This year, the rate of inflation in the country is expected to be 25 to 27 percent.
Unfortunately, the country’s economy continues to grow despite heavy taxes and levies on all commodities, especially utilities. Despite being an agricultural economy, food items are becoming beyond the reach of 70% of the people.
Inflation is at record levels and there is a lack of development in the socio-economic sectors of the country. Economists say that the recent floods may affect the stock market on a long-term basis, but the stock market will recover from these effects going forward. On the other hand, the interest rate is already at a high level, which is not expected to increase further, but there is also no expectation of a decrease in view of the fears of rising inflation.
The devastating effects of floods have directly affected our agriculture. Pakistan, whose economy is 21% of GDP depends on agriculture. About 45% of our country’s employment is directly or indirectly linked to agriculture and 60% of exports are linked to agriculture-based commodities.
The Effects of Floods on Pakistan’s economy estimated that 2 million crops and lands have been affected by the recent floods. 15 lakh acres of land in Sindh, 3.5 lakh in Balochistan, and 180 thousand in Punjab have been destroyed by floods.
2.5 million tonnes of rice, 7.5 million tonnes of sugarcane, 0.7 million tonnes of cotton, and 0.3 million tonnes of maize were destroyed by the floodwaters in this area and it took a long time for the farmers to prepare the land for planting the next crop. Due to this, there is fear of a food crisis in the country. Minor crops like vegetables and dates have also been affected by flood water.
Where food shortages have arisen due to the destruction of crops, on the other hand, the prices of the available food items are expected to increase dramatically. need of
Traders of local vegetable and fruit markets say that the delivery of vegetables, fruits, and other commodities has been affected due to the flood situation in many districts of Balochistan, Sindh, South Punjab, and Khyber Pakhtunkhwa.
Due to this, the prices of vegetables and fruits have increased due to reduced arrival in the local markets. Apart from this, the price of meat and milk is also expected to increase due to the large-scale killing of animals and non-delivery.
Local dairy farmers say that the supply of grass, straw, and other fodder has stopped due to which the fodder has become expensive.
The prices of commodities in the global market are also at a high level due to the flood situation in the country affecting the delivery of commodities, it is likely that inflation will remain high in the next two months and the monthly inflation rate is likely to be 26-27%, however, November I expect the situation to return to normal.
Cheap seeds, fertilizers, and electricity supply for agricultural improvement, land yields more due to flood water If these incentives are given to farmers immediately, our crops will yield more next year.
High-interest rates which are a hindrance to economic growth must end. Damaged water supply infrastructure should be restored immediately, flood-affected areas should be declared tax-free zones, and electricity tariffs should be reduced for these areas, medicines and food should be provided through domestic and foreign aid.
Urgent management is necessary, small farmers whose land is less than 30 acres should be waived off their loans and all stakeholders along with the government should draw the attention of the world to this terrible disaster that has befallen our country so that Pakistan Assistance should be provided on an emergency basis as soon as possible.
Talk to all countries to eliminate or reduce the debt they have to pay, export raw materials that are imported, and eliminate taxes on raw materials for flood-prone areas.
On the other hand, JS Global has expressed fear in its research that due to the flood, the tube wells and other infrastructure of the farmers have also been damaged, while the price of fertilizer is already at a high level due to which the farmers are facing difficulties. It will have to be done and the upcoming crops may also be affected.
When Pakistan came into existence, 50% of the country’s GDP was comprised of agriculture, but over time, it has reduced to half due to wrong agricultural policy and failure to conduct farming according to modern standards of the world.
Pakistan is one of the countries affected by climate-environmental challenges and the recent floods are a testament to this. If we do not invest in new technology and training, the impact of this change will affect the agriculture-dependent GDP by 5%. Can also go to percentage.
At this time, the biggest challenge for the government is immediate measures for the people trapped in flood waters. The government has estimated the damage at US$10 billion. Before the flood in Pakistan, about 80 million people were living below the poverty level, which will increase further.
Economists say that agriculture, small industries, and other self-employed people have directly suffered massive losses due to the flood situation. Apart from this, economic activities are also likely to slow down due to inflation and reduced purchasing power of citizens, which will result in reduced employment opportunities, and unemployment in the country may increase further.
The IMF also imposed its preconditions for Pakistan’s loan review and extension, which imposed heavy taxes and levies on the poor, but did not cut the perks of parliamentarians, government officials, and the bureaucracy. At a time when Pakistan’s economy is in decline, various cartels (business mafias) have also become stronger in the country.
These cartels are controlling the prices and supply of basic food items and petroleum with or without the consent of the government. In fact, the government has become hostage to these internal and external groups (cartels).
The same situation was faced by the PTI government and now even after the coming of the coalition government, there has been no significant change in it. At present, the economic management of the state is being carried out through a heavy and burdensome taxation system for the poor people which cannot be sustained in the long run. Of course, the economic management of nuclear Pakistan cannot be run like a corporate company, nor can it be left at the mercy of incompetent and frivolous economic managers who prefer spending on their own luxury rather than benefiting Pakistan.
In this crisis situation where floods have caused massive damage, there is a need to rehabilitate the victims, provide relief to the people without discrimination, and reconnect different parts of the country through infrastructure development and dams, and water supply. Emphasis should be placed on devising strategies for future flood prevention through the construction of reservoirs.
The government should initiate serious and revolutionary reforms for the economic management of Pakistan in such a way that the dependence of the country’s economy on foreign sources is minimized. Unnecessary expenses and privileges of government officials, elites, and bureaucracy should be banned and non-developmental expenses should be substantially reduced.
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