Post-Floods: Economic Situation of Pakistan

Written by Fizza Ayub Khawaja on Sunday, 29 January 2023. Posted in Business Education

Photo by Qasim Nagori on Unsplash  


Climate change induced mass flooding in 2022 left Pakistan ravaged. With over 1500 lives lost, 33 million people displaced, and losses exceeding $3 trillion, the country is in a morose state, socially and economically. As of now, a study has found that estimated damages and economic losses are expected to increase as the situation progresses. Post disaster evaluation has been conducted in collaboration with the United Nations, the World Bank, and the Asian Development Bank. This evaluation established that significant international help will be required for Pakistan to recover from the damages that have been incurred. 

With limited finances, a struggling economy, and one of the highest rural populations in the world (220 million), economic losses have impacted the underprivileged the most. As housing, agriculture, communication, livestock and transport suffered the brunt of the catastrophe, Pakistan’s financial hardships have increased tenfold. Due to a negative impact on export focused industries, external trade is expected to suffer the most. 

‘The situation is still evolving, with flood waters stagnant in many areas, causing water-borne and vector-borne diseases to spread, and more than 8 million displaced people are now facing a health crisis.’ This fails to summarize all the calamities that this South Asian state is now facing. Monsoon rains flooded one-third of the country at their worst causing irreversible damage to more than 2 million homes, killing more than 1 million livestock and displacing 8 million people with more than 640,00 now living in relief camps. 

With global inflation, loss of household income, rising food prices and disease outbreaks, the worst is yet to come. The study has indicated that these losses may push between 8 to 9 million more people below the poverty line, hence increasing the national poverty rate by 3.7 to 4 percent. 

Excluding aid to and needs of private companies, rehabilitation and reconstruction costs are expected to be at a minimum of $16.3 billion. These include costs needed for Pakistan to adequately prepare for similar future threats that climate change may pose. Reviewing the scale of this calamity, the United Nations have increased their allocated aid appeal budget for Pakistan from $160 million to $816 million. As of now, 23% of the aid has been met by the international community. The UN has issued a warning that if more funds are not received by the end of this year, nearly 15 million people will be at a risk of starvation. In lieu of this, the USA has issued $30 million more in aid. 

Although Pakistan is a long way from recovery, through international help and proper internal management, proper measures can be taken to not only help those most affected by floods but to also prevent such disasters from escalating to the level that the mass floods of 2022 did.

About the Author

Fizza Ayub Khawaja

Fizza Ayub Khawaja

Fizza is a Business Education Writer at Girls For Business.

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