08-19-2010, 01:26 PM
ISLAMABAD (August 19 2010): The Council of Foreign Relations (CFR), an American non-profit non-partisan membership organisation, publisher, and think tank specialising in US foreign policy and international affairs, cited what it claims several sources highlighting the dangers that floods pose to a possible Taliban resurgence as well as being used by the military establishment to further its political fortunes.
According to CFR website under the title 'The Cost of Pakistan's Floods', the contents of which were faxed by Pakistan Embassy in Washington to Foreign Office which, in turn, faxed it to FBR and Ministry of Finance, the floods "are sorely testing the government's capacity and setbacks are likely in its efforts towards economic growth and development, fight against militancy, and the country's civil-military relations. It also carries implications for international development assistance and the ongoing war in Afghanistan".
In its recent 'analysis brief', the Council on Foreign Relations has highlighted that the deadliest floods in Pakistan's sixty-three-year history have killed over 1,600 and affected nearly fourteen million people. The immediate challenge is an emerging food crisis, with millions of acres of farmland destroyed. The World Food Programme says at least six million people are at risk of going hungry and food shortages are expected to rise. Agricultural production in Pakistan, Asia's third-largest grower of wheat and the fourth-biggest producer of cotton, may decline by 10 to 15 percent. This has serious implications: Even though agriculture constitutes 22 percent of the economy, it employs two-thirds of the country's population. Analysts predict that a contraction in agricultural production could lower GDP growth rate for 2011 from an estimated 4.4 percent to 3.1 percent. Punjab, in particular, is crucial for growing both wheat and cotton; widespread destruction of cotton would affect the textile industry, a mainstay of the national economy.
The trade deficit is expected to worsen, as Pakistan will need to increase imports of food and other necessities. The flooding is aggravating inflation, which remains high at 12.7 percent. The increased government expenditure will exacerbate the fiscal deficit, already weighed down by high defence and security spending. This will also make it near-impossible for the government to meet the International Monetary Fund conditions to cap fiscal deficit at 5.1 percent of GDP. The conditions are part of the $10.66 billion emergency loan that Pakistan took out from the IMF in November 2008 to avert a balance of payments crisis. To help Pakistan meet its economic challenges, aid from its international partners and an additional loan from the IMF will be imperative in the next twelve months.
Meanwhile, the political fallout from the floods is threatening a weak government and a fragile civil-military balance. As the government faces growing public anger for its poor response and an ill-timed trip to Europe last week by President Zardari, the country's powerful military establishment has been earning kudos for its emergency relief work, says the CFR analysis.
Analysts also express growing concerns that the floods could open the door to a Taliban resurgence, especially in the flood-hit restive areas in the north-west, as the army's attentions are diverted toward relief efforts. Reports suggest (that) Islamic charities, some with links to banned militant groups, have already stepped up aid efforts in areas where the government and international aid has failed to reach. This intensifies pressure on Islamabad and Washington, which have been struggling to win Pakistan hearts and minds through their own assistance programs.
Analysts further said that donors' lack of confidence in the Pakistan government's ability to spend aid money effectively and honestly should not keep it from helping the suffering millions. "The money," it argues, "can be channelled through credible international and local organisations," the CFR analysis added.
According to CFR website under the title 'The Cost of Pakistan's Floods', the contents of which were faxed by Pakistan Embassy in Washington to Foreign Office which, in turn, faxed it to FBR and Ministry of Finance, the floods "are sorely testing the government's capacity and setbacks are likely in its efforts towards economic growth and development, fight against militancy, and the country's civil-military relations. It also carries implications for international development assistance and the ongoing war in Afghanistan".
In its recent 'analysis brief', the Council on Foreign Relations has highlighted that the deadliest floods in Pakistan's sixty-three-year history have killed over 1,600 and affected nearly fourteen million people. The immediate challenge is an emerging food crisis, with millions of acres of farmland destroyed. The World Food Programme says at least six million people are at risk of going hungry and food shortages are expected to rise. Agricultural production in Pakistan, Asia's third-largest grower of wheat and the fourth-biggest producer of cotton, may decline by 10 to 15 percent. This has serious implications: Even though agriculture constitutes 22 percent of the economy, it employs two-thirds of the country's population. Analysts predict that a contraction in agricultural production could lower GDP growth rate for 2011 from an estimated 4.4 percent to 3.1 percent. Punjab, in particular, is crucial for growing both wheat and cotton; widespread destruction of cotton would affect the textile industry, a mainstay of the national economy.
The trade deficit is expected to worsen, as Pakistan will need to increase imports of food and other necessities. The flooding is aggravating inflation, which remains high at 12.7 percent. The increased government expenditure will exacerbate the fiscal deficit, already weighed down by high defence and security spending. This will also make it near-impossible for the government to meet the International Monetary Fund conditions to cap fiscal deficit at 5.1 percent of GDP. The conditions are part of the $10.66 billion emergency loan that Pakistan took out from the IMF in November 2008 to avert a balance of payments crisis. To help Pakistan meet its economic challenges, aid from its international partners and an additional loan from the IMF will be imperative in the next twelve months.
Meanwhile, the political fallout from the floods is threatening a weak government and a fragile civil-military balance. As the government faces growing public anger for its poor response and an ill-timed trip to Europe last week by President Zardari, the country's powerful military establishment has been earning kudos for its emergency relief work, says the CFR analysis.
Analysts also express growing concerns that the floods could open the door to a Taliban resurgence, especially in the flood-hit restive areas in the north-west, as the army's attentions are diverted toward relief efforts. Reports suggest (that) Islamic charities, some with links to banned militant groups, have already stepped up aid efforts in areas where the government and international aid has failed to reach. This intensifies pressure on Islamabad and Washington, which have been struggling to win Pakistan hearts and minds through their own assistance programs.
Analysts further said that donors' lack of confidence in the Pakistan government's ability to spend aid money effectively and honestly should not keep it from helping the suffering millions. "The money," it argues, "can be channelled through credible international and local organisations," the CFR analysis added.