floods have had a major impact on the eonomy of any country

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Economic costs of floods in Pakistan

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Final Research ReportPakistan Economy


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0 9 1 1 1 1 4 SHEIKH Mir shahnawaz [email protected]

Student No. LAST NAME (in CAPS) First, Other Name/s Email Address

0 9 1 1 1 6 3 SHAIKH Bilawal Murtaza [email protected]


0 9 1 1 2 0 9 MANGNEJO Sadam Hussain [email protected]


0 9 1 1 2 1 0 RAHOOJO Waqar Ali [email protected]

PAKISTAN ECONOMY RESEARCH REPORT

ONECONOMIC COSTS OF FLOODS IN PAKISTAN

SUBMITTED TO

MADAM ZAINAB DAR

SUBMITTED BY

CREATIVES

SEMESTERBBA-VII(B)

DATE OF SUBMISSION18TH DEC 2012


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Acknowledgement


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We are grateful to our teacher Madam Zainab Dar for teaching us

Pakistan Economy. Her versatile knowledge in this field and unique

teaching style has developed our knowledge and cleared many

Economic concepts in relevance to Pakistan.

We are more grateful to Madam for assigning this report, which has

further helped us in evaluating many interrelated dimensions of

economy.

Finally we bestow our thanks to all who have directly or indirectly

supported us with their assistance and guidance to compose this

report and accomplish broader vision to visualize things in Pakistan

Economy.

THANKING YOU

CREATIVES

Executive Summary


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The main purpose of this report is to highlight the change management concepts

in relevance to the Pakistan Tobacco company and to know what factors are

responsible for change, along with their impacts and implementation. This Project

includes the history, introduction of PTC and the change management concepts

along with the reasons and after affects of Change in the company

The purpose of this project plan is to:

states the more important information in the report

the purpose, method, reason for the report

the findings, conclusions, decisions, recommendations

all major generalizations or assumptions of the report

It is the intention of this change management plan to ensure that the readers

have understood clearly about the change concepts and their relation to Pakistan

Tobacco Company.

Economic costs of floods in pakistan

Purpose StatementThe purpose of this research is to study the effects of social integration on migration

intentions with the event of a disaster as the intervening variable. This study will look atthe ways that social integration assists in creating community cohesion and residential

satisfaction, mediating a desire to make a residential move following a disaster event.

This research is important because it calls into question the relationship of socialintegration as a mediating factor in decisions to remain in a disaster-affected community

or to choose to leave. This is a question relevant to demographers who look at migration

patterns and causes which contribute to residential moves. It will also contribute to the

growing theories of social integration and social capital.

Fllods have had a major impact on the eonomy of any country, these are devastataingand are hamrfull, flood are Natural disasters which have over al anegative impactcommunities around the world. Whether they are in the form

of rain flooding, monsoon flooding or some other flooding they will affect communities

economy and the social structure


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Floods in Pakistan

In 63 years, Pakistan never experienced such ferocious floods as it saw during thisAugust 2010. The impact on the

life, property and livestock has been devastating. The damages caused have put thecountry to a state that matake tens of years to recoup. More than 1,500 people have died ;1,000 in KhyberPakhtunkhwa only. Hundreds ovillages have been swept away in Khyber Pakhtunkhwa, Punjab and Balochistan whileSindh which had little in itwaterways for a number of years, is now bracing itself for a major deluge. Standingcrops, animal farms and infrastructures have also been damaged badly. Livestock, one of the major source of incomefor rural families, has beeaffected. Millions of people are seeking refuge in tents made of plastic and sheets

Pakistan had been suffering from three serious shocks even before the recent floods

caused devastation to human lives, property, infrastructure and social services in the

country

The floods have displaced 20 million people, damaged or destroyed more than one

million houses, infrastructure, and washed away standing crops from 10 percent of the

cultivable area. The losses of livestock, poultry, etc. which provide cash incomes to the

poor are quite substantial. According to the UN observers, the 2010 Floods in Pakistan

have caused more devastation than the combined effects of Asian Tsunami, 2005

earthquake in Kashmir and the recent Haiti earthquake. The loss of life has indeed

been contained but the loss to property and incomes have been considerably higher.

Internal displacement of people has been on a massive scale. Preliminary estimate of

flood damages prepared by the World Bank and ADB amount to about $ 10 billion.

Researchers at Ball State University and Tennessee State University have put the

damage to the infra-structure, buildings, contents and agricultural assets between $5.1

7.1 billion.

The economic performance before the floods was recording some modest

improvement. Growth was picking up and was estimated to reach 4.5 percent in 2010-

11. Headline inflation was forecast at 11.5 percent lower than the previous year. Official

reserves had increased and the nominal exchange rate remained stable as the current

account deficit was narrowing. Higher inflows of workers remittances, rising export

earnings and fall in import prices and volume all contributed to this favorable outcome.

However, the outlook for the fiscal balances remained bleak. Escalating Defense

expenditures, lower tax revenues, higher spending by the Provincial Governments and

shortfall in Coalition Support Fund reimbursements and other foreign financing had

widened the fiscal deficit. This larger deficit was financed by the borrowings from the


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State Bank of Pakistan and the banking system which fed into higher inflationary

expectations and also crowded out private sector credit. According to the IMF, the

program deficit target would have been missed by a margin of 1.7 percent of GDP. The

repeated postponements of introduction of Reformed GST (RGST) had also raised

doubts about the achievement of the agreed tax revenue targets. It is not obvious

whether the Government has attained internal political consensus and the Federal

Board of Revenue has developed the requisite capacity to launch this tax soon.

Reforms in the power sector that were expected to plug in the leakages in the collection

of electricity tariffs and reduce the budgetary subsidies are also not proceeding at the

desired pace.

What has been the impact of the floods on the economy? The recent IMF report

has concluded that the economic outlook has deteriorated sharply. The agricultural

sector has been hit hard and the loss of output would reduce GDP by over 2 percent.

These output losses combined with disruption in supply chains arising from damage to

infrastructure have pushed up the prices of food, vegetables and fruits. Floods had also

disrupted international trade with the supplies of exports and imports held up and fuel

could not be delivered to power plants. Inflationary pressures will thus intensify and

inflation rate may rise to about 14 percent. Public finances are likely to be affected with

lower revenue collections, higher outlays for needed humanitarian assistance and

continued needs of the defense services in fighting the Taliban and consolidating their

hold on the areas from where they have expelled these extremist elements. The

current economic scenario for 2010/11 therefore looks bleak as GDP growth would be

only 2.8 percent, inflation 13.5 -14 percent, current account deficit 3.1 percent and fiscal

deficit nobody knows for sure where it will end up.

A timely and appropriate response of the domestic and international community

to this calamity can not only contain and mitigate the risks to the economy but also turn

it into an opportunity for economic revival. This goal is achievable if the post-relief

rehabilitation and reconstruction activities are carried out in a framework of burden

sharing and not business-as-usual.

The stimulus to kick start the economy in the post-flood relief period can be

provided in two ways. First, the immediate task would be to facilitate the return ofapproximately four million families to their respective habitats and enable their

transition from dependence on relief goods to restoration of livelihoods. Cash grants,

microfinance loans, the supply of seeds, fertilizers, bullocks, implements and housing

material should be provided to them before the sowing season starts. Microfinance

banks and Microfinance Institutions (MFBs and MFIs), Pakistan Poverty Alleviation

Fund and Zarai Taraqati Bank can provide the financing for these purposes. MFBs and


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MFIs should be given lines of credit by the government, banks and international donors

for channeling micro loans to the poor for agriculture, housing and micro businesses.

Agricultural production can in this way bounce back to higher levels as some of the

areas that do not receive water normally would also come under cultivation this year

and water stressed lands would be able to retain higher moisture content because of

floods. Rural incomes will rise as a result of higher output and higher producer prices

and create demand for consumer goods that will help the domestic manufacturing

industry. Second, the physical rehabilitation and reconstruction work including housing

can be financed from allocations from the Benazir Income Support Program, funds at

the parliamentarians disposal, the Peoples Work Program, Bait ul Mal and Zakat and

provincial development budgets. These public sector funds should be supplemented by

corporate sector, NGOs, Civil Society groups, wealthy individuals, philanthropists and

expatriates. These groups may operate in specific areas or be assigned specific tasks

without being asked to donate cash contributions. Similarly, the international donor

community can undertake projects of their choice in a particular district directly orthrough local organizations. The spending generated by these large, medium and small

projects in the flood affected areas would have a multiplier effect on the economy

through employment, construction, cement, steel, paints and chemicals, wooden

products and more than 30 industries that will be involved.

The distress caused by this tragedy can thus be converted into a stimulus for the

economy if there is adequate effort to mobilize resources nationally and internationally,

proper planning, coordination at various levels, assignment and delineation of

responsibilities among different players, and involvement of the public, private and non-

governmental sectors in the implementation of the projects and the activities.

intangible impacts(relating to non-material and/or emotional losses) registered markedly higher values

than tangible impacts (relating to material losses), and immediate impacts weregenerally higher than lasting impacts. Intangible immediate impacts (overall score

of 1.81) included the stress of the flood itself, the anxiety ofbeing out of ones home,

the discomfort ofliving in temporary accommodation and the time and effort in

dealing with insurers and builders to return home as soon as possible. Intangible

lasting impacts (which focus on the time and effort to return to a normal life) were

more sustained and includedfear of future flooding,strains within the family itselfand

loss of sentimental/irreplaceable items.

Health2.7 Flooding impacts directly on both physical and psychological health, with astrong interaction between the two. The most extensive recent study, global in scope,

is the Tyndall CentresFloods health and climate change: a strategic review (Few et

al., 2004; summarised in Ahern et al., 2005). In this work, which includes studies in


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England, Australia and the USA, the health impacts of flooding are closely related to

age and pre-existing health (RPA, 2005).


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1. Economy

Economic loss

The flooding in Jiangxi of China in 1998 caused great damage. The economic loss

was HK$156 billion, 400 buildings surrounding the lake were inundated, leaving more

than 1 million people homeless.

Resources used in reconstruction

After flooding, government has to input many resources for aiding or

reconstruction, e.g., police force, fire control, aid worker, resources used for resisting

flood, etc. This also brings loss to society.

2. Environment

Traffic

Flooding will lead to the damages of roads, collapse of bridges or traffic

congestion, which may affect the daily operation.


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Damaging the farmland

Flooding brings too much water which will cause damage to farmland.

3. Human Beings

People died and lose their homes

Flooding will cause death and injuries. In year 1998, 0.23 billion of people were

affected in the flooding of Xian, including 3 thousands people dead, 1 million of people

lost their homes. In 1996, the monsoon flood in India affected more than five million

people in the northern and eastern part of the country. Severe floods have also killed

some 200 people in India and Bangladesh and left millions homeless and starvation.

4. Disease

Flooding usually brings infectious diseases, e.g. military fever, pneumonic plague,

dermatopathia, dysentery, common cold (type A), breakbone fever, etc. And for those

areas which have no electric supply due to flooding, food poisoning may occur as foodmay not be properly frozen.

objective

analysis of the impact of flood on economy

to explore the impact of flood of social living

to provide propoer recoomendation for handling flood situation

research questions

How does the flood impacts on the economy

How is social living being effected by floods


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What are the economic costs of floods.

Recoomendianton

PAKISTANS ECONOMY AND THE IMPACT OF FLOOD

ISHRAT HUSAIN

floods have had a major impact on the eonomy of any country

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