A. Majeed—AFP
Rummaging through a heap of litter off the highway leading out of Karachi, Sudhir Janoo is pleased. He has found what he had been looking for. “Maybe I can put on a few more patches,” he says, inspecting the pair of tattered canvas shoes. For the 15-year-old, any pair will do. The floods forced out Janoo and his family last month from Jacobabad. His feet are blistered and bloody, and he cannot help but think of happier times. “At home, my father earned enough as a shopkeeper to afford a new pair of shoes for me every year,” he says. A new pair of shoes may not come for a long time now. Swept away with the waters is also Janoo’s dream of finishing school. The swollen River Sindh, once the source of prosperity for his village, has changed his life. Janoo is just one of at least 17 million who have been affected by the floods in Pakistan, an embattled country desperately ill-equipped to cope with this, its worst humanitarian crisis.
Assessments of the damage wrought by the nationwide floods vary sharply, even within the government—some in the finance ministry estimate losses at $15 billion, Prime Minister Yousaf Raza Gilani says the figure is closer to $43 billion. But there is unanimity on one thing: the severity of the disaster has pushed millions of Pakistanis toward an inescapable future of disappointment and despair. Impoverishment will only bring more instability.
Hafeez Pasha, a former commerce minister who leads Lahore’s Institute of Public Policy, says the inability of the state to cope with and contain the humanitarian crisis and the economic fallout from the floods is a perfect storm for Pakistan. “The economic instability which follows is a major challenge,” he says. The displaced are taking refuge in urban centers like Karachi and Peshawar, cities that are already resource-strained and crime-riddled. “[The enormity of] their needs and the overall sense of despair are very alarming,” he says. Before the floods, some 34 percent of 180 million Pakistanis were living below the poverty line, subsisting on $1.25 per day, according to World Bank figures for 2009. Now, Pasha says this figure will touch 40 percent.
Inadequately supported flood victims trapped in rapidly worsening living conditions have attacked emblems of power and wealth. On a photo-op tour of the affected areas on Aug. 8, a member of the federal cabinet, Hina Rabbani Khar, was attacked near Muzaffargarh by people angry over the government’s slow response. In a Karachi suburb, some refugees have taken over newly built, privately-owned apartments that had been lying vacant. When police tried to evict them on Aug. 23, violence broke out. Some 16 people were injured and three of the flood refugees were killed. There are also regular reports of aid convoys being attacked and looted by the destitute and hungry.
U.N. officials are nervously aware of the growing scale of the problem. “Ghetto after ghetto of flood victims near some of Pakistan’s cities will not bring joy to anyone,” said an Islamabad-based U.N. official, who has previously worked with the internally-displaced in Africa, speaking on condition of anonymity. “The thought of these people attacking places to grab their needs, crime going up and other ills following close behind such as prostitution are all very real possibilities,” he says. “The economic situation is very, very serious.”
Economist Pasha paints an alarming picture of the battered economy. For the present financial year, which ends in June 2011, he expects inflation to jump to 18 percent, almost double the pre-floods projection by the government. With public spending on rehabilitation and rebuilding rising, he expects the budget deficit to increase to at least 7.5 percent of gross domestic product as opposed to earlier official estimates of about 4 percent. It is worse for the agriculture sector, which contributed $34.9 billion to the economy and employs 42 percent of the labor force, according to official figures for the last financial year. Pasha says this sector will contract by 8-10 percent, spurring unemployment and resentment and raising temperatures in the street.
The sense of despair has begun to hit Pakistan’s political elite. “There will be massive job losses, serious social implications and a snowball effect on manufacturing and services,” says Prime Minister Gilani. In his estimate, losses to the transportation and agriculture sectors alone are close to $6 billion. To foot the reconstruction and rehab bill, the government intends to slap a surcharge on individuals with annual incomes of Rs. 300,000 and more. This “flood tax,” as it is known in bureaucratic circles in Islamabad, is not likely to go down without controversy since it will also affect the middle class that already feels overtaxed.
“There will be resistance to any new tax which does not finally force Pakistan’s nontax-paying classes to begin sharing the burden,” says Shaukat Tarin, a former finance minister. Some 99 percent of eligible Pakistanis do not pay any income tax, according to the government’s own statistics. Tarin, who now heads a private bank, says the government must focus on cost-cutting measures. “We need an assertive effort to begin cutting annual losses in public sector companies before the government can expect its people to accept larger sacrifices,” he says.
Gilani and President Asif Ali Zardari remain under fire for their inability to produce a coherent plan for the post-floods recovery despite the fact that few countries, let alone Pakistan, would have been able to cope with a natural disaster of this vast a footprint. Speaking on condition of anonymity for fear of offending policymakers in Islamabad, an economist in Washington, D.C., who has firsthand knowledge of the Pakistani economy, says the history of “mismanagement and the fundamental inability of the ruling [power] structures to understand how best to lead and inspire change that is reform-oriented” is a major problem. As a sign of “sheer mismanagement,” he points out the government’s failure during the last financial year to curb the budget deficit at levels agreed upon with the International Monetary Fund.
Mismanagement and misery make for a heady mix in a country already embroiled in battles both existential and bloody, including against an insistent militancy fueled by poverty, anti-American sentiment, and jihadist fervor. But Pakistan’s plight is not being ignored. Countries, including longstanding enemy India, have extended support to Pakistan. “Right now,” says an ambassador from a Western capital in Islamabad, “no one wants Pakistan to sink.”
Yet, in the fast-growing slums peopled with flood victims, many fighting to survive at the fringes of Pakistan’s urban sprawl, help is not coming fast enough. Siddique Mehr, a small farmer who fled Shikarpur for a camp in Karachi, points to his 5-year-old daughter suffering from scabies and standing barefoot in the punishing midday sun. She hasn’t slept in three days. “Even if money comes to Pakistan, there is so much corruption,” he says, fearing that little if any aid will trickle down to folks like him. “No one cares for the poor.”