PDNA Calls for Urgent Support to Implement a Recovery and Reconstruction that ‘Builds Back Better’

The Ministry of Planning Development & Special Initiatives on Friday launched the Post-Disaster Needs Assessment (PDNA) report with estimates of over 30$ b of damages and losses of Flood 2022.

The PDNA report was launched by the Minister of Planning Development & Special Initiatives, Professor Ahsan Iqbal accompanied by the Federal Minister for Climate Change, Senator Sherry Rehman, Federal Minister for Economic Affairs Sardar Ayaz Sadiq, Secretary Planning Commission, Syed Zafar Ali Shah, Chief Economist, Dr Nadeem Javed and representatives of donors were also present at the launching of the report.

The report was conducted jointly with the Asian Development Bank (ADB), the European Union (EU), the United Nations agencies with technical facilitation by the United Nations Development Programme (UNDP), and the World Bank. During the launching report the Chief Economist, Dr Nadeem Javed, shared a detailed presented.

According to the report, damage, loss, and needs assessment following the unprecedented floods in Pakistan calls for ‘building back better’, based on the principles of the poor first, transparency, inclusion, and climate resilience.

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The assessment estimates total damages to exceed USD 14.9 billion, and total economic losses to reach about USD 15.2 billion. Estimated needs for rehabilitation and reconstruction in a resilient way are at least USD 16.3 billion, not including much needed new investments beyond the affected assets, to support Pakistan’s adaptation to climate change and overall resilience of the country to future climate shocks.

Based on extensive consultations, we have developed the following vision for a climate resilient and adaptive recovery, Putting the poor first, Inclusion, Transparency, and Climate resilience, said the Minister for Planning Development, Ahsan Iqbal at the launching of the report.

The Minister highlighted the important pillars of our Post-disaster recovery which includes Build Back Better, People Centred Socio-Economic Recovery and Building systemic resilience against natural hazards and climate change impacts.

According to the report, the Housing; Agriculture and Livestock; and Transport and Communications sectors suffered the most significant damage, at USD 5.6 billion, USD 3.7 billion, and USD 3.3 billion, respectively. Sindh is the worst affected province with close to 70 percent of total damages and losses, followed by Balochistan, Khyber Pakhtunkhwa, and Punjab.

The Minister Ahsan Iqbal also requested IMF that to allow Pakistan for utilizing its development funds for disaster recovery, particularly the condition of spending at least 40% of PSDP only in last quarter of financial year which is unwarranted under current circumstances, and it must be revised, said the Minister, while urging the IMF to review it.

The PDNA, in addition to estimating damages, economic losses and recovery and reconstruction needs, also assesses broader macro-economic and human impacts and recommends principles along which to develop a comprehensive recovery and reconstruction framework.

Federal Minister for Climate Change, Senator Sherry Rehman said that Pakistan has geared up its efforts to make the case for climate justice at the upcoming multilateral climate forum COP27 in Egypt. “Prime Minister Shehbaz Sharif will address the head of states during the world leaders’ summit.

He will also co-chair a high-level roundtable with the Prime Minister of Norway on the theme of Climate Change and the sustainability of vulnerable communities, said the Minister. Pakistan will definitely take up this in upcoming COP27 pressing the world community for climate justice as Pakistan one a great victim of that,” she added.

The reports further state that the floods affected 33 million people and more than 1730 lost their lives. They are particularly impacting the poorest and most vulnerable districts. 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 now facing a health crisis.

The crisis thus risks having profound and lasting impacts on lives and livelihoods. Loss of household incomes, assets, rising food prices, and disease outbreaks are impacting the most vulnerable groups. Women have suffered notable losses of their livelihoods, particularly those associated with agriculture and livestock.

The PDNA Human Impact Assessment highlights that the national poverty rate may increase by 3.7 to 4.0 percentage points, potentially pushing between 8.4 and 9.1 million more people below the poverty line, said the report.

Multidimensional poverty can potentially increase by 5.9 percentage points, implying that an additional 1.9 million households are at risk of being pushed into non-monetary poverty, it added.

Compounding the existing economic difficulties facing the country, the 2022 floods are expected to have a significant adverse impact on output, which will vary substantially by region and sector.

Loss in gross domestic product (GDP) as a direct impact of the floods is projected to be around 2.2 percent of FY22 GDP. The agriculture sector is projected to contract the most, at 0.9 percent of GDP. The damage and losses in agriculture will have spillover effects on the industry, external trade and services sectors.

The Government is providing immediate relief to the impacted communities and supporting the early recovery, while aiming to ensure macroeconomic stability and fiscal sustainability. Moving forward, as recovery and reconstruction spending rises, the loss in output could be mitigated.

Yet, significant 2/2 international support will be needed to complement Pakistan’s own commitment to increase domestic revenue mobilization and save scarce public resources, and to reduce the risk of exacerbating macroeconomic imbalances.

Although the early loss and damage estimates may increase as the situation is continuously evolving on the ground, the PDNA lays the groundwork for an agenda for recovery and reconstruction that is designed to build back a better future for the most affected people in Pakistan.

While the recovery will require massive efforts for the rehabilitation and reconstruction of damaged infrastructure, buildings and livelihoods, it will also be an opportunity to strengthen institutions and governance structures.

The report puts forth recommendations for developing a comprehensive recovery framework. While the primary focus will be on the affected areas, such a framework presents an opportunity to embed systemic resilience to natural hazards and climate change in Pakistan’s overall development planning.

This tragic disaster can be a turning point, where climate resilience and adaptation, increased domestic revenue mobilization and better public spending, and public policies and investments better targeted to the most vulnerable populations; all figure at the core of policy making going forward, states the reports.

Similarly, it further added that in the short term, targeted mechanisms such as social assistance and emergency cash transfers, provision of emergency health services, and programs to restore shelter and restart local economic activities, particularly in agriculture, should be prioritized.

Reconstruction and rehabilitation should rest on key principles of: participatory, transparent, inclusive, and green recovery for long-term resilience— “building back better”; pro-poor, pro-vulnerable, and gender sensitive, targeting the most affected; strong coordination of government tiers and implementation by the lowest appropriate level; synergies between humanitarian effort and recovery; and a sustainable financing plan.

Given Pakistan’s limited fiscal resources, significant international support and private investment will be essential for a comprehensive and resilient recovery. The Pakistani authorities are committed to accelerate reforms to generate additional domestic fiscal resources and improve efficiency and targeting of public spending, states the report.

According to the report, Beyond the immediate needs of floods reconstruction, these reforms, while protecting the most vulnerable, will be important to generate fiscal space to invest more broadly into more climate resilient infrastructure and adaptation to climate change, as well as to build buffers to face future shocks, while addressing macroeconomic imbalances.

This commitment of the Government will also be key to mobilize further international support as well as to unlock private sector sources of financing—both of which will be absolutely critical to face the current climate change-induced shock. The ADB, the EU, the UNDP and the World Bank are fully committed to working with the Government and people of Pakistan during the ensuing recovery phase, and to increase the country’s climate resilience.