Economics and Policy: Pakistan 2010 & 2022 Floods

 (00:00) S. Tabibian: Welcome to the Climate Map podcast. The Climate Map, an initiative founded by Covalence Global, outlines the complexities of climate change on a streamlined, action -oriented mind map. This podcast is an archive for our research, highlighting conversations with entrepreneurs, scientists, policymakers, and designers.

(00:17) S. Tabibian: My name is Sophia Tobibian, and I'm your host and the co-founder of Covalence Global. I'm joined here today by Dr. Sobia Rose, Research Fellow at the Pakistan Institute of Development Economics. In this episode, we discuss the intersection between the economy and Pakistan's 2010 and 2022 floods.

(00:35) S. Tabibian: Tell us a little bit about yourself. Where are you from, and how did you first develop an interest in economics?

(00:42) Dr. Rose: I'm Sobia, Sobia Rose, and I'm from Pakistan, and I'm from the province of Punjab. I did my graduation in agricultural and resource economics, and then I did my post-graduation in development economics. Then I started my PhD, and I chose environmental economics as my discipline during my PhD. I did my PhD from the University of Agriculture, Faisalabad. Why I chose economics? Actually, this was quite an accident that I landed in this discipline. I was supposed to do something in sciences, but at that time, when I applied, I just read about this discipline, and I thought that maybe this is the thing I want to do in my life. At that time, I just wanted to give it a try, but when I started learning about it, when I started studying economics with special reference to the agriculture, which is a very important sector of our economy, it took all my heart. Then I did my post -graduation in development economics, and I told you that I did my PhD in environmental and resource economics. I'm an agricultural economist, environmental economist, you can say, and my areas of interest are economics, public policy, and with special reference to agriculture sector of the country, food security, and climate change. I work in Public Sector Research Institute, Pakistan Institute of Development Economics. My job at the Pakistan Institute of Development Economics is to support the planning and development process of the government through my research. So since I'm working in a public sector research institute, I am doing another full area of research as the evaluation of development interventions.

(02:29) S. Tabibian: It's great to hear about your background and how you chose to pursue economics. I know that you've done a lot of work researching the 2010 and 2022 floods in Pakistan too. So I was wondering, from your perspective, what is the main cause of Pakistan's floods?

 (02:47) Dr. Rose: The main cause of Pakistan's floods, actually, flood is a universal phenomenon, but it depends on the exposure and your vulnerability. When you are from a developing country, you are not vulnerable towards floods, exposure is everywhere. You can say that because the main reason behind flooding is the complex relationship of the temperature with all the other variables. When temperature rises, there are multi-day exposures to the abnormal rainfalls, but when it's a developing country, then you have the lack of capacity to handle that disaster. Like for example, what happened in the floods of 2022, that was an uber phenomenon.  That was a long dry spell and because of that long dry spell, there was increased rainfall. At some points of the country, there was continuously 72 hours rainfall. It was pouring for 72 hours, approximately 273 percent highest rainfall since 1961. It was the wettest month of August in 2022. And then there was another thing that was the glacial max. That is also because of rising temperature patterns. This is because of climatic variability and long-term changes in the temperature patterns that causes the floods. When there is long-term change in the temperature patterns, then the frequency of floods increase in a country. Same is the case happening in Pakistan. There was a major flood in 2022, and then there were some flash floods in 2014. Those were also very disastrous, and then the biggest flood ever was a flood of the 2022. So, the glacial max, increasing temperature, and what this increased temperature does, like when there is the soil compaction, this is another phenomenon, that minimizes our ability to cope up the damage. There is a long dry spell, then what happens, it sucks all the moisture from your soil. When it sucks all the moisture from your soil, the soil becomes compact. The more soil is compact, you can say that is less deep edge of the water. When there is more flood waters, they steep less from your soil, and then they cause more damage because the runoff is very fast. So this was the case, especially in the floods of 2022, that the soil compaction also resulted in more damages in the flood prone areas of the country. So these are the three main reasons which are basically causing more flooding in the country. But again, I would say what matters is your coping capacity.

(05:46) S. Tabibian: Thank you for outlining those three main reasons. So what are the major threats and consequences of these Pakistan floods on the country?

 (05:58) Dr. Rose: First of all, the major threat is to the agriculture sector. The agriculture sector has almost 24% share in the GDP. The major threat is to the crops and to the livestock sector because the floodwater, when it's a lot of floods, especially flash floods, or even if it's ever rain floods, it washes away all the crops. So it's a very big setback for an agricultural dependent country. When your all crops and your all live stocks are washed away in the floodwaters, it compels your population to plunge deeply into poverty. So another major effect of the flood is a lot of migration. When there is flood, especially in rural areas, people try to migrate from rural areas to the urban areas. So it's very less likely that they're going back to urban areas because some villages completely wash away due to floodwaters. So it is very less likely for people that they are going to settle back in their villages again. So when they are settling in the urban areas, so there is increased urbanization. But this increased urbanization does not generate any economic activity because these people are jobless. They are not doing any business because their economic activity was disrupted when the flood struck to their native areas. So increased migration and loss of economic activity, this is a very big effect of the flood.

 (07:26) Dr. Rose: And what happens? There is a spillover effect of this increased urbanization since these people are more economically dependent and they don't have other basic facilities. So what happens? The criminal activity increases. For example, the criminal activity increased by 3% after 2010 floods. So this is another effect of the flood, especially in case of developing countries. I can say that this effect is universal.

 (07:53) Dr. Rose: Another effect is the disruption of the supply chains. What happens when there is a disruption in the supply chain? First of all, your food supply chain gets affected, your food production gets affected, and then your food supply chain badly disrupts. So when your food supply chain badly disrupts, the population which is already struck with enormous damage of floods, that is also not getting appropriate food, when it's not getting appropriate food, then it's a severe crisis of food insecurity and nutritional insecurity. That's what happened in the aftermath of floods of 2010 and floods of 2012. So there is another biggest disruption in the supply chain of medicine. People are sick in the flood prone areas, but since your infrastructure is damaged, your roads are washed away, so your medicinal supply chain also gets disrupted, and this disruption of medicinal supply chain also affects the population in the flood phone areas.

 (08:47) Dr. Rose: And another big effect of the floods is the price hikes. Since your crop is damaged, so there is a lot of food price hikes. And when there are there is food price hikes, it's spillover effect on the urban population is also, the urban population also gets affected due to this. So what happens? We can say that this area and this area and this area is under floods. And this is the these are the disaster prone areas, but the speed over effect of that disaster is faced by whole population of a country. And this is what happened to Pakistan. Like for example, each flower is the staple food in Pakistan. So even in the policy corridors of Pakistan, people say that availability of wheat flour to the people is like food security, because there is a lot of poor population and they are totally dependent on the availability of wheat. When wheat is not available, they are hungry. When we analyze the data, pre-floods prices of the wheat flour and post -flood, there was 32% increase in the post -flood wheat prices in Pakistan. And this was a biggest setback for the already poor population of a country.

(09:55) Dr. Rose: These are just few effects that I'm discussing there a lot. If we are going to discuss all the effects, then I think it will take a lot of time. I think these are the major things that cause biggest spillover effects in the economy. What happens is, then the country like Pakistan, which is already fighting on many fronts, it becomes very difficult to revive from such damages. I observed the development funds allocated to the revival from the disasters. Still, after 2022 floods, there were some development schemes that were still going on to revive from the 2010 floods. We faced another biggest flood of the tree. So I don't know how much time it will take to recover from this damage. In 2024, there is again a prediction of floods because there are enormous rainfalls in the month of August. There has been a very long rise in the country. So let's see what happens.

(10:48) S. Tabibian: Those are all really great points. I have not thought about the supply chain perspective, or also I know you have a lot of work produced on wheat and how floods impact its prices, which I think is such a big issue. So thank you for touching on those points. Now thinking about solutions, what are both structural and non-structural measures, and how do we implement them to mitigate the floods?

(11:13) Dr. Rose: I would say that structural measures are like building structures. Building structures means when you are going to build some dams, some reservoirs, flood walls, or some flood control channels to divert excess water away from the populated areas. You are going to insert some flood gates and barriers, which really prevent the floodwaters from entering the specific flood zone areas. And you're also developing some embankments. These are the structures that you use that we develop to prevent floods. These are the structural measures that your intervention is dependent on building something.

(11:58) Dr. Rose: When your intervention is dependent on building community resilience, these are the non-structural measures. For example, increasing the community's adaptation capacity to cope up the damage and to space the damage. This is what I always tell it to my students in a way that, for example, there is a threat of increasing the sea level. There are two solutions. One is, you are going to build another story on your house, another floor on your house. You are living at a beach and there is sea in front of your house. One measure is to build another floor on your house and you get adapted to the sea level. This is what adaptation is. And when you try to minimize the sea level, this is mitigation. So for a developing country like Pakistan, mitigation is very expensive. At the moment, you have the option to adapt accordingly to changing climatic conditions to adapt to prevent disease disasters. To mitigate these disasters, it needs a lot of investment to mitigate the disaster because we can't stop glaciers to be melted. What we can do, we can change our lifestyle. We can change our community's resilience. Like, for example, if some area is prone to flooding, and there is a school in that area, what we can do, we can teach the students, we can teach the people living over there to cope up with the damage.

(13:24) Dr. Rose: And for this, there should be a better flood warning system. Why we every time fail? Because we don't have better flood warning systems. Even if there is better flood warning system in developing countries, there is always political factor behind all the decisions, behind all the economic motivations. So what happens, even if there is better flood warning, the people are not going to listen back. No one is going to be prepared for that. So we need to make these things better in case of developing countries. For example, in Pakistan, there are some structural measures that government is taking right now. It is developing some small dams in other provinces, like there are five provinces in Pakistan. And in Balochistan, it is developing some small dams. And this is also developing some small dams. So this can be helpful. And this can be a help in harvesting the rainwater and can help to turn prices into blessing. Maybe if there is any other future flood in the country.

(14:27) Dr. Rose: But besides all this, we need to build the resilience of the communities. For example, in Pakistan, what happens? There is a lot of population who is residing in the flood plains. Flood plains are those areas where flood water flows. Every time, there are some designated flood plains where it is expected that flood water is going to flow from this area, from this, it will take this path. But still, people are living there. They are growing their crops, they are clearing their animals over there, and they are just they are doing normal economic activity in those areas. So when there is flood, those areas get damaged a lot. Due to political reasons, government is compelled to make schools and hospitals and health facilities in those areas because people are residing over there. And when you are in democracy, you need to get votes from these areas, you need to develop, use some development in both, but this development always washes away when there is flood. Like for example, the same thing happened in 2010 and the same thing happened in 2022.

(15:28) Dr. Rose: Actually, I hail from the district of Rajanpur. Rajanpur is very much flood -prone area. What happens every year there, there is flash floods from the Salman range. This is a hilly area in the borders of the city. So what happens every other year, there is flash flood, but every other year, people migrate from that area and then they go back. These are those sticky people who don't want to leave that area despite the threat of flood every year. So we need to teach people that this is not good to live in flood plains. You should leave these areas, but for that, they need obviously some benefit, some economic support to move out and reside in some other rural areas. But what they do, they come and reside in urban areas, and some of them reside there forever. And then it's very difficult to get them engaged in the economic activity again. So these are the reasons, structural majors have their own reasons of failure and non-structural majors have their own reasons of failure. So until and unless these two interventions will go side by side, we won't be able to develop a resilient economy which can absorb all these shocks.

(16:41) S. Tabibian: I was just on a call with a computational scientist that's from Pakistan and he was discussing the infrastructure of the education as well and how forecasting systems are reliant on climate education in Pakistan. One more question I had about the floods is, how did the 2010 floods compare to the 22 floods?

(17:01) Dr. Rose: There was a difference of the scale between these two floods. In 2010 floods, if I compare the population affected in 2010 floods, that was almost 20 million people were affected in 2010 floods. And in 2022 floods, there were almost 33 million people which were affected due to floods. Another was the difference between the causes of the flood. The 2010 flood was because of a lot of rainfalls and in 2022 there was a lot of rainfall. It was even more than 2010 floods. There was another reason of glacial melting. Glacial melting caused the riverine floods and there were both floods that the riverine floods in Pakistan in 2022. So the scale of damage was more in 2022 as compared to 2010. In 2010, it was the biggest flood ever in the history of Pakistan, but 2020 broke that record also. Another difference between these two floods is the geographical effect. In 2010, the most affected provinces were Punjab and KPK, Khyber Pakhtunkhwa, while in 2022, the most affected provinces were Punjab and Sindh, which are part of agricultural activity in the country. So the disruption in the agricultural activity was a lot in 2022 as compared to 2010. However, the effects were same, which I discussed earlier, the disruptions in the supply chains, price hikes, these were the main differences in 2010 and 2022 floods.

(18:33) S. Tabibian: What do you think are the limitations of Pakistan's agricultural economy and how do we address those limitations?

(18:42) Dr. Rose: This is a very broad question, but I will try to sum it up. The Pakistan's agricultural economy has the biggest share in the Pakistan's economy. It has 24% share. The labor force share is also more in the agricultural sector because more and more labor force is engaged in this sector. So apparently, if we see the statistics, it seems very attractive, that this sector is very attractive. There are some very hidden ailments this sector is different from. For example, first and foremost, when we unpack this issue, then we come to know that there are a number of issues which are related to this one, lack of productivity and lack of heat. When we compare our production with the international level of production, we say that we are among top and important producing countries, we are among top in sugarcane producing countries or I don't remember, but although production is good, but when it comes to productivity, overall we are at 56th number in the whole world.

(19:48) Dr. Rose: So it means from the same area of the land, we are getting less production when we compare it with the other developed countries where they dedicate less area to agriculture but get more production because per acre yield is more as compared to Pakistan. So what is the main reason behind lack of productivity? To me, the major reason behind lack of productivity is the less availability of quality seeds. For example, I just told you that wheat is the staple crop of this country which is very important.  Wheat is a political crop, it is very important for our politicians, for our bureaucrats, for our population, for everyone. And governments provide a lot of support to this crop in terms of providing wheat support prices and all that.

(20:33) Dr. Rose: Even if it is a staple crop of the country with a lot of attention given from the government to improve its production, still if this crop has 48% certified seeds available, farmers who grow this crop only get 48% certified seeds. So, what we can think about other crops in the country. Only maize is the outlier because since maize is administered by the private sector, when government took out its steps from the maize production and it given whole and so be it to the private sector, then this property also formed.

(21:08) Dr. Rose: So, the lack of quality seed is the biggest reason behind lack of productivity in the country. There is an other reason behind this loss of productivity is the highest cost of production. If we divide our Pakistan agricultural landscape according to the land availability, we will see that there are a lot of farmers who are small farmers and more than I think 80% farmers who are small farmers, and these small farmers are those who need some support from the government. So, government provides support to these small farmers in terms of providing subsidies for the fertilizers, but these subsidies are not translated into the actual benefits for the farmers because the model of the provision of the subsidy is reimbursement based. When model is reimbursement based, it means they need to spend some cash, and according to the one research that I studied, 64% of them fail to get the benefit of the subsidy. So, this model needs to be revisited, and then there is an other reason behind the country's lack of valuation.

(22:12) Dr. Rose: Valuation means when you are making some products out of raw material, the raw crop which you are producing, converting it into something valuable. For example, you convert wheat into bread, you convert wheat into cakes and all that, you convert your raw milk into the other dairy products. For example, you are making sweet yogurt, frozen yogurts and all that. The valuation is very less in our country. So, we need to develop the capacity of the farmers to add value in the raw products, and this is from demand side and from supply side. Government needs to give some trainings and support to the farmers so that they can increase the shelf life of the products.

(22:57) Dr. Rose: The situation is further aggravated due to the lack of storage facility. The storage facility is substandard. If it's available, it's very expensive for the farmers. So the crops which have very less shelf life, they go wasted after the harvest. If they are not going to be transported to the market right after the harvesting, they are going to be wasted. So there is a lot of crop wastage in the country. This can be managed by providing better storage facilities to the farmers so that the shelf life of the product can be increased either by storage or by valuation. So this can be, I think, very important thing for our agricultural economy.

(23:38) Dr. Rose: And then there is another reason which is very important that I would like to add here. That is the lack of mechanization. In our country the majority farmer is the small farmer. So, when there is the small farmer, they cannot afford technological interventions and mechanization. They do not have that much money because they are operating at subsistence level and when some farmer is operating at subsistence level, they do not bother to make technological interventions to increase the crop productivity. This can be tackled by corporate farming or by merging the farms. Corporate farming can increase the use of mechanization and this also can increase the productivity.

(24:18) S. Tabibian: Thank you for that. Yes, I think it's so interesting to see what role the government, both the federal government and then also the individual provinces, should play in helping the agricultural economy. It was very interesting to hear more about your perspective on that. Is there anything else you'd like to share?

(24:35) Dr. Rose: The thing you just talked about, the provincial and federal governments' cooperation for a better agricultural economy that is very important. In our country, what happened after 2010, there was an amendment in the constitution and what happened in that amendment that imparted some sectors to the provinces and the main fiscal issues were centralized. Fiscal issues are centralized, but expenditure issues are not, they're on the provinces. So, in any country, when we need to develop, we need a better decentralized structure, and for a better decentralized structure, we should give some fiscal autonomy to the provinces, and there should be better local government system. In any country, like I'm not talking about Pakistan, in any other developed country, when there is better decentralized system and when there is better local government system, even for the flood interventions, for the non -structured interventions, especially the local government, can outperform if it's responsible. So, I think we need to focus on these areas and we need to focus on these governance issues in case of developing countries so that we can work thoroughly from the bottom-up approach. This bottom -up approach can make things better.

(25:49) S. Tabibian: I was actually thinking a lot about decentralization since the 18th Amendment Act of 2010. There's so much issues with the provinces having to go through the federal government to get funding that they need, but then that causes many other issues. Thank you so much for all those insights. I'm so grateful that you're able to make the time for this.

(26:09) Dr. Rose: Thank you so much Sophia for reaching out and for discussing all these issues.

(26:14) S. Tabibian: And that is it for the Climate Map today. Please visit v -climate -map .org to learn more about how you can get involved with us.