Pakistan could take years to recover from the floods disaster, its president said, as crisis talks began with the IMF, which predicted the catastrophe would have a “major and lasting” economic impact.
An official in the province of Sindh said yesterday that up to 600,000 people were now in danger from rising flood waters in the south, nearly a month into a calamity that has affected a third of the country and cast some 4 million from their homes.
“We are strengthening embankments, but 500,000 to 600,000 people in low-lying areas are still in danger and we are trying to persuade them to leave their areas,” said Sindh’s irrigation minister, Jam Saifullah Dherjo.
Flood victims are seething over what they say is their government’s sluggish response to the floods that have wiped out villages, bridges, roads, crops, livestock and livelihoods.
Pakistan faces the daunting challenges of securing enough aid for relief efforts, making sure militants don’t take advantage of the catastrophe to gain recruits and figuring out ways to dull long-term economic pain resulting from the floods.
A senior IMF official said after the first day of economic talks with Pakistani officials that the country faced hard choices on how to allocate scarce resources for rebuilding.
Masood Ahmed, director of the IMF’s Middle East and Central Asia Department, said that while the catastrophe was still unfolding, it was clear the floods will have “a major and lasting impact” on a economy that was fragile before the floods struck.
Pakistani President Asif Ali Zardari and other government officials have expressed concerns that Islamic militants will try to exploit the hardship.
“I see always such organizations and such people taking advantage of this human crisis,” Zardari said in an interview published in Britain’s Independent newspaper yesterday. “It is again a challenge to not let them take advantage of this human crisis.”
Zardari, who triggered criticism when he went ahead with visits to meet British and French leaders and when he spent time at a family property in France as the catastrophe unfolded, defended the government’s response.
“I have my own reasons for being where I was and at what time,” Zardari said. “This is a long-term situation and one has to have the capacity to sustain yourself for three years, or even more, and not exhaust yourself immediately.”
Pakistani Finance Minister Abdul Hafeez Shaikh will join the talks in Washington today, but he has already said he wants the IMF to ease restrictions on the US$11 billion loan program approved for Pakistan in 2008.
Ahmed said the options available to the Pakistanis are to adjust the current IMF program to factor in fiscal pressures arising from the floods, or to opt for emergency funding provided by the IMF to countries hit by natural disasters.
Even before the floods, Pakistan’s economy had been pounded by a two-year financial crisis.
Economic growth had been forecast at 4.5 percent this fiscal year, but officials are now predicting anything between zero and 3 percent, with the key agricultural sector hard hit.
Ahmed said the talks would focus on the impact the floods will have on growth, inflation and the budget.
“They will have to make hard choices in reallocating government investments toward higher priorities and find ways to mobilize the resources,” Ahmed said.