The Damage Needs Assessment (DNA) estimates a budget deficit of 6.4 per cent in 2011-12 against the budgetary target of 4 per cent. After more than seven months the World Bank and the Asian Development Bank (ADB) finally submitted the 'Damage Needs Assessment (DNA)' report to the National Disaster Management Authority (NDMA) indicating the overall damage to be Rs 324.5 billion that is 1.6 percent of the total GDP of the country.
Well-placed sources told Business Recorder here on Monday that the DNA report of the 2010 floods compiled and finalised by ADB and the World Bank was handed over to the government in November 2010. NDMA announced that the 2011 flood DNA would be launched in the first week of December, a deadline that was delayed to mid January, then again to mid February and finally the report was handed over to the government by the two multilateral banks in mid March.
"Delay in providing the required data to these multinationals by the Districts' Disasters Management Committees (DMCs) of Sindh was the main reason behind the delay in the launch of DNA report and it was a fact that both the banks, the World Bank and the ADB, do not have any independent source of information and they have to rely upon the data being provided to them by DMCs", sources revealed.
"It is true that the DNA is more reliable than the survey that was conducted by the government earlier in collaboration with the United Nations but the basic source of information is a Revenue Officer (Patwari). Patwari forwards this information to Tehsildar and then this information reaches to the DMCs followed by the Deputy Commissioner (DC)," sources explained.
It is already a known fact that the UN-Pak flood assessment survey that was forwarded to the provincial governments of Sindh and Balochistan was rejected by the Sindh government as it was not satisfied about the authenticity of data compiled. According to the DNA report, although the 2011 floods were significantly less in intensity and duration than the 2010 floods, yet in terms of their economic impact, especially in Sindh, these were as devastating. In 2010, the total flood damage in Sindh was estimated at Rs 370 billion (8.4 percent of estimated provincial GDP); whereas the 2011 floods have caused an estimated damage of Rs 311 billion (or 6.1 percent of provincial GDP) in the province.
The report says that the 2011 floods are expected to have a significant effect on the economy. With large scale damage to agriculture and housing sectors, economic growth is likely to suffer a significant deceleration. Despite expectations of better than projected showing in Punjab, floods will cause a decline in growth of agriculture sector from 3.9 per cent to 2.7 per cent. This would also have some dampening effect on growth of downstream economic activities. Industry and services sector will experience relatively minor deceleration in growth. The overall economic growth is therefore projected to decline from its pre-flood projection of 4.2 per cent to 3.8 per cent.
The report says that the overall damage to Housing is estimated to be $982 million while the reconstruction cost is estimated to be one billion dollars. Damage caused to the health and education sectors have been estimated to be $14 million and $138 million respectively.
According to the report, the floods 2011 led to agriculture, livestock and the fisheries' sector loss of 1.8 billion dollars. Water supply, sanitation and the energy sector suffered a loss of $14 million each. The transport and communication sector suffered a loss of $304 million. The report says that for 2011/12, the government again set a fiscal deficit target at 4 per cent of GDP. However, given the lack of budgetary measures to achieve this target, a fiscal deficit of 6 per cent of GDP was considered more realistic.
After the floods, this estimate is likely to increase to 6.4 per cent of GDP as revenue is expected to fall by 0.1 per cent of GDP and additional expenditure on relief, rehabilitation and reconstruction will cause an overrun of 0.3 per cent of GDP in expenditure. Balance of payments may also come under pressure. The report reveals that the current account deficit will also widen from 0.8 percent of GDP to 1.4 per cent of GDP as damages, especially to the cotton crop, will adversely impact exports, whereas additional imports would be required to cover the supply losses caused by floods, agricultural inputs (fertilisers, pesticides, etc) and construction material.
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