Pakistan warns flood damage will top $10 billion

Watch CNBC's full interview with Pakistan's Foreign Minister Bilawal Bhutto Zardari

Pakistan’s foreign minister has appealed urgently for international help as the death toll in historic floods across the country is expected to rise in the coming days.

Already reeling from an economic crisis, floodwaters have submerged more than a third of the country in water, killing more than 1,000 people and affecting 33 million people.

Bilawal Bhutto Zardari, the country’s foreign minister, told CNBC’s Dan Murphy on Thursday that he feared the damage from the natural disaster could exceed current estimates of $10 billion, adding that the crisis in the country is still ongoing and in the “rescue and relief phase”. ”

The flood, which Bhutto Zardari told CNBC is “a climate catastrophe of biblical proportions”, covers over 95,000 square miles of land. Bhutto Zardari said the crisis is far from over as “the southern regions of Pakistan are still bracing for floods to cross northern rivers”.

“Pakistan right now is paying with its life and livelihood for a climate catastrophe that is not its fault,” he said. Pakistan’s contribution to global carbon emissions is less than 1%but it is among the 10 countries most affected in the world by climate change.

The South Asian nation of more than 220 million people reported an inflation rate of 27% in August, according to government data, and has been hit hard by the Covid-19 pandemic. Its currency collapsed while net foreign exchange reserves fell to just under $8 billion in August, according to the State Bank of Pakistan.

Pakistan’s rural areas have been hardest hit by the floods.

Anadolu Agency | Anadolu Agency | Getty Images

Political infighting has gripped the country since April, after the ousting of former Prime Minister Imran Khan, who was charged under anti-terrorism laws by Pakistani police.

Impact of food inflation

Rural areas of Pakistan have been hardest hit by the floods, which will have a compounded impact on Pakistan’s agricultural industry and ultimately the cost of food.

Bhutto Zardari told CNBC “about 80-90%” of Pakistan’s crops were damaged by the floods. The International Rescue Committee report that 4 million acres of crops were destroyed and 800,000 head of cattle perished.

Before the disaster, food inflation in rural provinces was much higher than in urban areas. For instance, the cost of onions in urban areas of Pakistan increased by 89% from July 2021 to July 2022. In rural areas, this cost increase exceeded 100%.

The International Monetary Fund on Monday approved the release $1.1 billion in Pakistan in special drawing rights, part of its rescue program which began in 2019.

The money was already part of a relief package to help Pakistan stabilize its economy. Pakistan has now issued a joint appeal with the United Nations for around $160 million, which Bhutto Zardari told CNBC “obviously is a very conservative estimate of the minimum requirements at this time.”

Over a million homes were destroyed and Bhutto Zardari added that key infrastructure such as bridges, road networks and dams were damaged. Pakistan in the future, he said, will need “large-scale reconstruction, which will take a lot of work”.

Flooded residential areas after heavy monsoon rains in Dera Allah Yar town in Jaffarabad district, Balochistan province.

Fida Hussain | AFP | Getty Images

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