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Research Tittle:: Group Leader: Ali Ashraf (2016070) Abdullah: (2016253) Email
Research Tittle:: Group Leader: Ali Ashraf (2016070) Abdullah: (2016253) Email
Contents
i. Abstract 3
ii. Introduction 3
iii. Literature Review 4
iv. Methodology 7
I. Introduction 7
II. Research strategy 7
III. Research method 7
IV. Data collection and methods applied 8
Abstract
Regular occurrences of floods in Pakistan with devastating effects are a result of Failure of Pakistan
Government in coping with the situation. Consequently the country is witnessing a steady decline in
economic growth with falling international assistance. However with new growth strategic plans holds out
the hope of breaking this viscous cycle through producing increased rates of monetary development and
increased governmental accountability. The intention of this project was to address the issue of flood and
its impact on our countries economic and social structure and future reforms regarding this problem
politically. A rather simple and feasible, yet effectual technique of MCDM fuzzy topsis was applied to
distinguish a near ideal solution for our case of study. A diverse set of roundabout 25 respondents
throughout Pakistan were able to answer our questionnaire with economist being the most noteworthy.
Introduction
Businesses all around the world are influenced by natural disasters. The impacts a Natural disaster can
posit on a business setup can be divided into direct and indirect impacts. Former includes consequences in
form of deaths of humans and livestock, destruction of developmental infrastructure etc. Indirect impacts
include the influence on off-site business, decrement of property value and negative impact on the
currency exchange rate. Apart from these, the sociological and ecological impacts can also not be
neglected. Next to the deaths of humans and animals, a major concern for businessmen is that of
infrastructural disruptions. These can take form of disrupted water, gas and electric power. Also, the
interrupted fuel transport and blacked out media communications can cause business shut down as well.
At times the direct impacts might not be that drastic but the associated indirect impacts can be
catastrophic for businesses. The ability of recuperation from the aftershocks of a disaster depends upon
several internal and external factors. Internal factors include ability of risk mitigation majorly. External
factors involve factors that are more dependent on non-business sphere such as community disruption and
availability of social and institutional supports. When it comes down to figuring out which scale of business
setups are affected the most, one can say that the small businesses are often those that are impacted most
since they have little capacity to recover after disasters. Small businesses are less likely to commit to
disaster risk reduction through business continuity planning. Furthermore, as they often operate in one
location with a few employees, they do not have the ability to battle the risks and the impacts of disasters,
since them and are unable to spread and transfer their risks. Small businesses, especially in developing
countries are more prone to being located in hazard prone areas with unsafe business facilities and meager
human, financial and intellectual resources to combat their vulnerability by developing and implementing
business continuity plans. Small business setups are also less likely to be insured owing to affordability
issues. Such conclusions about the impacts of disasters on businesses in general and on small businesses in
particular are backed by studies that are carried out from time to time, especially in socio-economic
research centers across the developed part of the globe. Little evidences are available about these issues
with reference to developing countries. This study aims to bridge this gap. Talking about Pakistan, we see
that flooding is reported to be the most significant natural disaster in Pakistan in terms of frequency,
associated economic losses and the extent of affected people since the 20 th century. This phenomenon
itself attributed to 47.5% of total natural events, 75% of economic losses and 89% of the humans affected
by natural disasters. The event of flood dated July 28, 2010, was not just the biggest flooding in history of
Pakistan but was also ranked the first among the top 10 natural disasters in
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terms of economic loss and affected people since 1900. The monsoon period of July– August 2010 brought
the most destructive floods in the living memory of people of Pakistan. For more than 4 weeks, the flood
water submerged an area of 100,000 km2 (including more than 20,000 km2 of cultivated lands) and 78
districts out of a total of 141 districts in Pakistan. Amongst these, twenty-nine districts were severely
affected. According to the National Disaster Management Authority (NDMA) of Pakistan, if we consider the
number of affected people, area, and household damages, the 2010 flood was larger than the combination
of five giant disasters of the last decade i.e., Indian Tsunami (December 2004), Katrina USA (August 2005),
Earthquake in Pakistan (October 2005), Nargis Cyclone Myanmar (May 2008), and Haiti Earthquake
(January 2010). This flood resulted in loss of 1980 people, injured 2946, killed thousands of livestock and
led to large scale destruction of public infrastructure, buildings and stored seed grains and standing crops.
It displaced about 20 million people (11% of the total population), among which 3.5 million were children.
The flood damaged about 1.8 million homes and business facilities, with more than half of them being in
Sindh, half a million in Punjab and about 200,000 in Khyber Pakhtunkhwa. Although the floods did not hit
major cities and industrial spheres of Pakistan, it did however damage many small towns and villages and
many micro, small and medium size business setups. The most hit sector was that of manufacturing and
production followed by that of trade and service enterprises. Consequently, we can conclude that the
floods in Pakistan posed huge socio-economic impacts on the livelihood of the communities in the affected
areas.
Literature review
The monsoon flood of 2010 in Pakistan was enormous and unprecedented as it resulted in more than 1700
human loss, nearly devastating 20 percent of land area and about 20 million people across Pakistan. About
1.1 million houses were completely obliterated and more than 2 million hectares of crop utterly destroyed.
As flooding caused extensive damage to educational and health facilities so according to one report of
UNICEF 7,600 of these needed be reconstructed which consisted of 436 health facilities. Furthermore
property was heavily damaged as 2.9 million of houses were outright destroyed in which 1.9 p were
damaged beyond repair, also 80 percent of food reserves lost. [ CITATION Tho12 \l 1033 ]
The estimated guess of Pakistan’s National Disaster Management Authority (NDMA) adds up to total of
17.6 million people directly affected by flood as vast amount of water rushed down from north to south
displacing people across whole Pakistan. As report from Food and Agriculture organization (FAO) of United
Nations, almost 6.8 hectares of most productive crop land of Punjab across Pakistan has been absolutely
washed away by floodwater, which is nearly Pakistan 16 percent cultivable land. [ CITATION Sha11 \l 1033 ]
Agriculture as key export sector of Pakistan accounts 60 percent of export, 21 percent of its GDP, about 45
percent of employment.so this disaster add up to total loss of 7.5million tons of sugarcane,2.5 million tons
of rice,0.7 million tons of cotton and 0.3 million tons of maize Losses due to floods were
estimated in numbers by government shows about PKR21.3 billion to rice crop damaged, roundabout PKR2
billion of sugarcane and PKR22,4 billion of maize and other fruits and vegetables gave a total of PKR17.3
billion. [ CITATION Nad15 \l 1033 ]
Pakistan as being already short on total electricity generation of 4500MW was further hammered down
with additional 1500 megawatts as due to loss of one Gas field and other six power plants. Transport and
communication infrastructure was one of the major sectors that were sabotaged as countries 2000 miles
highway and 3500 miles railways were damaged. [ CITATION Sye12 \l 1033 ]
Three key elements determine the shear strength of any flood to come in future which includes
environmental change, deforestation and flood fields. According to Asian development bank, in recent 66
5
years of Pakistan the floods have affected over 599,459 Kilometers of land, a total of 11,239 lives and
economic loss of roundabout PKR 39 billion.[ CITATION Mem15 \l 1033 ]
Large scale flooding leads to additional water and air pollution, solid waste in big urban cities could be
washed away with water stream causing to spread the contaminants to other areas.so such poor sanitation
might cause diseases like malaria hepatitis and many more. According to one research flooding cause
oxygen concentration in flooding soil to almost zero. [ CITATION Raz13 \l 1033 ]
According to the reports, Sindh was the most affected province regarding the agriculture sector of country
as 95 percent of standing crop was downright destroyed. However, roundabout 80 percent farming
households that were located in Sindh and Punjab reported that more than 50 percent of their crop was
utterly leveled which included major crop such as: rice, cotton and sugar. (Raza, 2013)
As floods in Pakistan has been an issue faced annually and also the most prominent of any natural disasters
faced by Pakistan, the government has two strategy to counter damaged omitted by these floods using
structural and nonstructural measures. Starting off with structural, such as building of embankments,
construction of more dams and also improving upon canal system to divert all flood water. On the other
hand, nonstructural measures are based on weather forecast, estimation of river flow and also enhance
upon the system of early warning regarding future floods. (Iqbal, 2011)
As such large scale flood of 2010 annihilate the country in terms of both economy and also amount of lives
wasted, but what most analysts seems to ignore are its indirect long term causes such as drastic policy
changes and new flood management polices such as consideration of building new dams. Such large scale
investment to flood defense sector adds up further burden on taxpayers. Construction of dam itself causes
controversy like its effects on surrounding areas and people downstream specially Pakistan. (Philip Bubeck,
2017)
Pakistan adds into one of the most affected countries due to climate change as such ranking is utterly
based on net amount of damaged that had been occurred to countries economy and gross death toll, as
531.1 lives per year over last 20 years and also a whole amount of losses add up to 3.8$ billion. According
to World Bank-Climate Change Knowledge Portal (CCKP) forecast till 2100, expected increase in Pakistan’s
temperature would be much higher in compare to global temperature raise. On the other hand, northern
Pakistan’s glaciers are melting on alarming rate as 3000 glacial lakes has been made so far due to rapid
increase in temperature of north in contrast to south. (Sathar, 2010)
According to National Department of Management Authority (NDMA) Pakistan still lags immensely in
terms of flood forecasting and technology regarding early warning systems from other first world
countries. Little to known efforts has made by successive governments to initialize budgets plans regarding
climate change leading to least investment to this department. Furthermore, one of the most productive
ways to lessen crop damaged is to institute flood resilient crops where Pakistan lags behind other leading
agriculture countries by substantial margin. (Saeed, 2013)
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Figure: 1
7
Methodology
Introduction
This section of research paper describes the most prime and foremost backbone of any well-established
journal which is a research methodology. Further important portions which lay the foundations include
research strategy; methods applied research approach and last but not least are data collection methods .
Research strategy
Most of the researches held regarding our research paper bears the literature provided to us by past
researchers, which we wish to utilize and further append our own explorations under the title of Economic
impacts of flood on Pakistan.
Research method
Method applied in order for us organizes and gather results which includes Fuzzy Topsis
Fuzzy topsis
The fuzzy topsis approach has been used numerous times which ensures us of the quality and reliability of
this method, this approach is based on multi criteria decision making , so such method generally revolves
around these specific steps:
Step 1: Suppose an MCDM problem has X number of alternatives(X1,X2,X3) and further (Y1,Y2,Y3) number of
criteria’s, and N number of respondents .So each alternative is analyzed according to Y number of criteria’s
Step 2: This step involves assigning fuzzy numbers like given in table(A-1) below and multiplying these
weights with N numbers of respondents who chose option of those specific criteria which can supposed as
weight W .and to calculate fuzzy weight we apply this formula of adding all fuzzy numbers *
weights(W)/Number of respondents(N).
TABLE A-1
TABLE A-2
Fuzzy
Criteria Weights Very high Sum weight
0.7 0.9 1
W1*0.7/
C1 W1 W1*0.7 W1*0.9 W1*1 N N W1*0.9/N W1*1/N
8
Step 3: In order maximize or minimize on bases of beneficial and cost category, we chose max or min
weighted fuzzy numbers from each row
Step 4: In order to get normalized matrix, fuzzy numbers of each alternative are divided by maximum or
minimum fuzzy numbers of same each row.
Normalized fuzzy number=fuzzy weighted number/maximum∨minimum
Step 5: Further to get weighted normalized matrix we multiply fuzzy numbers of normalized matrix with
criteria fuzzy weight numbers.
Step 6: And further a distance formula is applied on normalized weighted fuzzy number to get the
Euclidean distances of each alternative which includes both positive ideal solution and negative ideal
solutions.
EQ-1
n
d ( p ,q )= √∑
i=1
¿¿¿
Step 7: Sum of all positive and negative Euclidean numbers and further applying the formula EQ-1 gives
the final result which can be further specified through ranks.
EQ-2
Table A-4
Sub criteria
Severity of floods on agriculture
impacts of flood on services
intensity of impact of floods on manufacturing
severity of floods on fiscal deficit
impacts of flood on supply chain
impacts on inflation
impact on poverty
impacts of flood on reforms
TABLE A-3
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Hazard forecasting
Risk mapping
BUILDING DAMS
0.000% 20.000% 40.000% 60.000%
As seen from table A-3 our result of this case study of economists from both top universities of Pakistan
like University of Peshawar and Lahore University of management sciences, top prioritized the hazard
forecasting. A popular explanation of such result might me due to it being most manageable and more
applicable in compare to other alternatives like building a dam which construction itself could put-on
further burden on already crumbling economy like Pakistan. Secondly, its drastic effects on surrounding
areas and specially generating water shortage for south Pakistan is an issue itself. It is important to
highlight the fact that alternatives like flood water diversion and storage, a very subtle practical solution
but which still falls in category of not having enough expertise and budget to carry out such immense
projects. It is quite interesting to note that, alternative like generating public relief funds achieved very
high on ideal solution index, a possible explanation might be it being so simple and easy to deliver, yet of
utmost significance as affected people due to floods would be in major need of any relief funds from both
government and fellow countrymen. It is notable that, both alternates like Risk mapping and structural
mitigation are not far behind our top alternate solutions, as seen from the table A-3,a value of 47.103 and
50.701 makes them almost alike in worth, so it can be deduced that these alternates are highly impactful
on sub criteria’s of table A-3.
The fact that our Government inability to formulate an effective response to the floods or
Prepare the country for the monsoons that wreaked havoc in the later years speaks volume of a system
with history patterned with failed economic policies and strategies. The country has a long history of
economic highs and lows [ CITATION Loo01 \l 1033 ] and failed take-offs [ CITATION Loo04 \l 1033 ], in which
rapid growth is followed by periods of relative stagnation [ CITATION Loo09 \l 1033 ]. What adds to this is the
presence of ineffective governance and associated nuances which benefit the elite who are stakeholders of
maintaining the status quo while stifling the much needed reforms [ CITATION Bur \l 1033 ] . Therefore it is
believed that only improved governance can counter this formidable barrier to sustained growth (Looney
and McNab 2007).
Sustained growth is important because without it, post-flood recovery will always stand on a weak
structure, with increasing poverty (owing to the government deficits and inflationary pressures) directly
impacting the country’s capacity to provide viable employment opportunities for those who lose
everything in the wake of the flood or those simply trying to break free from the chains of rural feudal
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bonds. With time it is increasingly becoming evident that reliance on foreign aid is not a viable solution. It
is, in fact detrimental for sustainable growth and even has failed to buy goodwill for country such as the
United States which give high percentage of the total foreign aid (Witte 2010). Furthermore, corruption has
seeped in deep and eroded the basic institutional infrastructure of the country (Fair 2009). Since the aid
distribution follows a top down approach, it has encouraged corrupt practices while curbing the need
For the government to develop a link with the general population by not only raising revenues but also
Redistributing those funds in terms of services (Fair 2009). The statistic that recent pull out of US civilian air
program will only have a 0.14% effect on the country’s GDP annual growth rate shows that the civilian aid
programs have minimum effect on the overall economy of the country (Arnoldy and Ahmed 2011). Over
the years, analytical assessments of the outcomes of foreign aid have turned out to be highly disappointing
in terms of expected and attained outcomes. Therefore both donor and recipient factions now agree that,
in many respects, Pakistan would have been better off without them (Birdsall and Kinder 2010; Burki
2011a). Worth mentioning here is the recent first-hand evidence (Wahab and Ahmed 2011) which suggests
that aid tends to in fact have a negative impact on the country’s growth. Domestic savings, on the other
hand posit a positive effect which leads to the implication that a good strategy for Pakistan to emerge out
successful is to work on domestic reforms and mobilize the local resources at hand. That, in fact will serve
as a productive investment rather than relying on foreign aid as such a reliance is now less fruitful with the
world wide tightening budgets, inflation and the donors realizing that there exists a gap between expected
and achieved goals pertaining to post flood recovery and creation of preventive measures. Considering all
this, a large number of Pakistan’s economists now believe that alternatively the weak state led policies
should be replaced with growth with entrepreneurs leading from the front. Pakistani Planning
Commission’s New Growth Framework revolves around this aim too. This Framework is representative of a
huge transition in our general policy towards the economy.
It’s main proposal posits that Pakistan should rise above the present development model with the still
playing an important role but in an environment made conducive for entrepreneurs to expand productive
investment, increase economic activity that helps take in the ballooned up youth labor force. Although this
framework appeals the economists but it is more at theoretical stage right now and therefore has drawn
criticism with regards to its procedural Dos and Don’ts (Hassan 2011). Some criticism is also directed
towards the reform and policy sequence proposed (Aftab 2011) and put forth a question mark on the
government’s political will and ability to pursue such an upheaving and ambitious agenda (Tahir 2011).
Despite these criticisms, the basic assumptions of this framework are all encompassing and we have
examples of other countries with similar situation who adopted similar program and achieved reform led
economic growth (Havrylyshyn and Wolf 1999; Mitra and Selowsky 2002). Here we can quote the Central
and Eastern European countries who successfully transitioned from Communism based programs to
progressive programs revolving around key assumptions similar to that of the Pakistani Planning
Commission’s New Growth Framework. On the other hand countries that rejected entrepreneurship led
policy frameworks did not experience as much economic growth. Although there exists some striking
contrast between Pakistan and East-Central European countries, a recent study (Looney 2012) has drawn
on a pool of developing countries and those in transition and has confirmed that economic reforms driven
by entrepreneurs at the fore front resides on a solid theoretical base. Such findings are significant for
Pakistan as they imply that in our case if we adopt the suggested framework, we can effectively deal with
post disaster recovery management and induce potential gains in the economy sector. Furthermore, in the
shade of good governance and strong institutional reforms we can overcome the barrier between our
current state and levels of sustained growth and development because entrepreneur led economic growth
supports trade liberalization as well as improved business environment which directly affect any country’s
development.
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Conclusion
Giving aid to deal with post-flood recreation would no doubt only drag the economy for a considerable
length of time to accompany development rates essentially beneath authentic levels. Given benefactor
weariness to donate and the administration's poor reputation regarding implementation of required
Measures of help, the results will never be incredible. Regardless it is highly improbable that even
significantly bigger volumes of aid all by themselves would be able to start the procedures of change and
administration enhancements expected to put the nation on a way of high continued development and
equipped for giving out assets to limit the harm from future floods. Under these conditions each round of
floods would force amazing costs (both direct and opportunity) on the economy. A pioneering based
system, particularly one concentrated on the formation of new firms and interesting exercises embodied in
the New Growth Framework holds out trust for development later on. The strategy, through starting a
procedure of administration improvement and on-going monetary change, would put the economy in a lot
more grounded position and render it as less aid required forth, preceding disasters. Significantly, by
focusing on development and not only adjustment in post-flood or other circumstances, the strategy
would give the required quick reaction in reestablishing occupations and getting the economy going once
again.
Acknowledgements: we would like to thank Sir Yousaf (Associate Professor) and Sir Hamza (Teacher
Assistant) For helping us in our research.
14
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