So here’s some of the situation as I’ve been able to piece it together.
Estimates on the damage done to livelihoods are ranging around 250 billion rupees, that’s not including infrastructure other fixed assets. Yes this is a large number, and a more detailed damage assessment is going to be done in the days to come, but even this number is not staggering considering its about a fifth of our total tax revenues. Given strong leadership and effective management of our resources, there is a good chance we can in fact pull through this with only a little help from our friends, just like we did in the earthquake days.
The last T bill auction showed the market is comprehensively spooked.
Almost 80 per cent of the money raised by the government was in short tenors of three months. This is in sharp contrast to previous auctions, where more than half of the money would always be in longer tenors of six months to a year. So the market is unwilling to go along with the government under the circumstances as it awaits a signal on whether or not the finance ministry actually knows what it is doing.
On another note, Nawaz Sharif briefly made sense yesterday when he wondered aloud why the protective embankments had broken in spite of billions of rupees spent on their renovation. The poor state of our irrigation infrastructure was hardly a secret but what is surprising is the damage coming out of Taunsa Barrage, only recently upgraded by the Musharraf government for billions of rupees. In fact the only barrage that saw mega investment in it has been the source of the largest flooding in Punjab. An inquiry is called for into this.
What is not making sense is all the talk of Kalabagh Dam. Would the dam have done anything to stop the flooding of Charsadda? Or Nowshera? Or Swat? How much of the floodwaters would actually have been stopped by the dam? What needs to be highlighted is not one mega project, but the thousands of miles of canals that need brick lining and stronger protective embankments.
In other news, an inflationary flood appears to be on its way. In Karachi at least, we are told by the provincial government that trucks are not entering the city, and fruits and vegetable stocks are running out. If this is true, it could mean serious difficulties for this city already reeling under a wave of lawlessness. Damage to food stores is going to be one of the most critical assessments that need to be carried out, and keeping food movement going on the roads is clearly amongst the most important priorities. Feeding the displaced population is a job of staggering proportions.
Through all this, who is watching the numbers? We hear talk of some fiscal measures, but so far it’s just that: talk. Are additional revenue measures in the offing? Leaks from Q block would have it so, but Q block gets quite testy about leaks. Is money being diverted from other heads to pay for relief operations? No word from our ministry, but common sense would say that it is. What is the sense in being so clammed up at a time like this?
This is the time to be sending a strong signal that someone is indeed watching the numbers, instead our finance ministry prefers to keep things private and secret. Somebody over there in Q block needs to understand urgently that theirs is a public trust, and public power cannot, must not and should never be exercised privately.
the writer is Editor Business and Economic policy for Express News and Express 24/7
Published in The Express Tribune, August 16th, 2010.
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