Category: Uncategorized

Introduction

There are two dominant schools of thought on the Taliban attempts at de-fencing the Durand line; the first regards the attempts as being state sponsored and taking place under the patronage of the Taliban government, the second suggests that the Taliban government is not fully representative of all Taliban factions some of whom have become recluse and their border activity stems from the opposition of the advances that the Taliban in Kabul are making towards Pakistan. There is a third school of thought too, slightly more nuanced but maybe less mainstreamed. Those belonging to this school think that since militancy has become the natural order in Afghanistan, forces de-fencing the border are neither backed by the government nor do they belong to a group with any political interest linked to the government in Kabul and Pakistan. They are hostile groups who will fight against forces on both sides of the border and need to be combated jointly by responsible governments in the two countries.

However, if one looks at how the economics in the region is shaping up, groups that are dismantling Afghanistan’s developing ties with Pakistan must be tackled by the government in Kabul even before they are dealt with by Pakistan. The simple reason for Kabul to do so is the great amount of economic dependence that a food-starved and macroeconomically unstable Afghanistan has on Pakistan. With India now gradually detaching itself from the security and economic affairs of Afghanistan, the latter has come to depend ever so greatly on Pakistan and its all-weather ally; China. Events like the breaches of the Durand line will only serve to frustrate a currently benevolent Pakistan that is committing to play its role in rebuilding the war-torn Afghanistan. Pakistan must therefore assess the situation in Afghanistan more carefully and understand the transition that is taking place to know exactly which stakeholders it wants to engage with and how does it strike the right balance between ensuring border controls while rebuilding its fractured relations with Afghanistan in the aftermath of the American exit.

Pakistan During the Afghan War

Barring a few decades between 1920 and 1970, the Durand line has continued to be a porous border. Pakistan’s idea of keeping the border porous in the past is largely rooted in the history of the Afghan war and Pakistan’s strategic decision to support the Afghan forces in their attempts to thwart Soviet invasion of their territory, part of which was rehabilitating the afghan refugees entering Pakistan. Fearing a potential spillover of the afghan war to its sovereign territory, Pakistan became a natural ally of the US and the mujahideen in thwarting the rapid onslaught of the Soviet forces. The military school of thought in Pakistan believed that the Soviets are entering the region with an intent to militarily dominate Pakistan while the ‘mullahs’ saw it as a communist attempt to silence a resurging Islam. In either case, the mainstreaming of the pre-emption of a Soviet insurgency in Pakistan created political legitimacy for the armed forces to enter the war and draw upon massive levels of public support. The war meant that not only was Pakistan fighting alongside the mujahideen, but it also permitted the use of its northern frontier as a strategic territorial buffer for the mujahideen. This meant maintaining the historic porosity of the Durand line, and its violations continued through the decade of the 1980s. The historic progression of events surrounding the Durand line and the trajectory of the highs and lows of its international recognition and legitimacy between the fall of the USSR and the withdrawal of the American forces in 2021 is by all means indicative of the fact that Pakistan has a heightened border conflict on its hands and reasserting the sanctity of the Durand line will be more troublesome than it was during the last two decades of American presence in the region when  a large burden of keep a check on illegal immigration  and ensuring security on both sides of the Durand line was shared by the US / NATO forces. The more troublesome this conflict will be for Pakistan; the greater will be the economic costs that Afghanistan will bear as a result of severing ties with Pakistan.

During the war on terror, arguments were advanced by the Afghanistan, Pakistan intelligentsia in favor of the porosity of the Durand line. In fact, with the rise of the TTP, border controls had become impossible to enforce and maintain during the war. Experts in the region suggest that porosity was not a necessity for Pakistan, but a compulsion tightly enforced by the Taliban and in some cases by the American and NATO forces. Regardless, with the end of the war in 2021, Pakistan has every reason to bring in more rigid border control measures to protects its territory against an expected refugee explosion. There is no common enemy or a preemptive threat of use of force by a global superpower like the USSR, neither is there any financial or economic incentive to rehabilitate afghans displaced by the war. The counter-factual in this case thus is much stronger that the rational response for Pakistan is to restore the sanctity of the Durand line which was duly legitimized as an international border by the Anglo-Afghan treaty of 1919.

Current Situation along the Durand Line:

During the last year, border forces in Pakistan blocked several Afghan attempts to tear through the ‘fencing of the Durand line’ which Pakistan completed over the last few years. While Pakistan’s outgoing National Security Adviser, Moeed Yusuf who made a diplomatic visit to Afghanistan in January 2022, reassured that the afghans are receptive to the idea of resuming dialogue with Pakistan including on the issue of the Durand line and forthcoming in their approach towards sustainable peace in the region. The continuing Afghan attempts to violate the sanctity of the border are irritants that will only push Pakistan away from the government in Kabul and enhance security along border which will have serious economic repercussions for Afghanistan. In particular, the defencing attempts will:

1. intensify matters within the Taliban factions some of whom are keener to take a more congenial approach to Pakistan and see Pakistan as more of a benefactor than a cause of their failures of the past;
2. push Pakistan’s strategic move of mobilizing its diplomatic and political resources within Afghanistan and make a selective strengthening of its ties with forces that can advance and protect its interests within Afghanistan; and
3. have severe economic-cost implications for Afghanistan especially vis-à-vis the food security crisis, the mitigation of which depends enormously on the transit food imports from Pakistan many of whom are registered under the Afghan-Pakistan transit trade Agreement (APTTA). According to 2014 data by the Asia Foundation, Pakistan is the largest destination for afghan exports (33% of all exports) and the second largest for afghan imports (17% of all imports). On the other hand, Afghanistan is a much less significant trading partner for Pakistan; source of no imports of any note and less than 7% of exports. Trading-off food and larger economic security for a border conflict that hasn’t borne any substantial political or social outcomes for more than a century seems like a bad choice for Afghanistan, but whether this realization prevails within the governing Taliban ranks is both critical and interesting.

The table below shows how trade between the two countries has continued to fall in the years directly preceding the American exit from Afghanistan (2021). It is interesting to note that the balance of trade was shifting in favor of Afghanistan since 2016. Pakistan’s imports had been rising since 2015 after which they experienced a slight fall in 2016. Pakistan’s exports from Afghanistan had remained largely stagnant between 2016 and 2018 but began to fall in 2019 experiencing a significant year over year decline in 2020.

Table.1: Pak-Afghan Trade Balance (2016-2020)

 

The trade balance shift towards Afghanistan in the run-up to the American exit reinforces why the economic cost of broaching the Durand line subject will be costly for Afghanistan which was seeing Pakistan develop as a profitable trading partner. Pakistan has a more diversified trading ecosystem, both in terms of product diversification and number of trading partners and thus the closure of trade ties which could result from an intensified conflict over the Durand line will make Afghanistan vulnerable from a food security perspective and create external account imbalances that will jeopardize the country’s macroeconomic stability, especially in the backdrop of $7bn of frozen foreign exchange accounts by the US.

Why Pakistan Must Improve Border Security?

There are three reasons why Pakistan needs to, and will secure the fencing of the Durand line: every new government in Pakistan has more pressure from the public to block the inflow of afghan refugees from the north, two, opposition parties have been using the Durand line as an excuse to blame successive governments for not being able to protect Pakistan’s territorial sovereignty and, three, the porosity of the Durand line is now seen as the cause of the rise of TTP in Pakistan and suicide bombings most of which have been attributed to the afghan refugees that entered Pakistan because of the porosity of the Durand line.

The breaches of the Durand line also threaten to undermine Pakistan’s present policy towards the Taliban government in Kabul. Pakistan must preserve the sanctity of the Durand line in order to maintain national security and manage refugee flow. It wants to see a stable and prosperous Afghanistan but clearly not one that becomes strong enough to bully Pakistan but likely to be one whose crises don’t seem to create a regional problem that transcends borders. But what Pakistan doesn’t want is to host more afghan refugees, many of whom have been vulnerable to recruitment by banned terrorist outfits. UNHCR reports that Pakistan currently hosts 1.4 million refugees down from a peak of around 3 million refugees that crossed the border during the afghan war in the 1980s. FATA, the region that hosts the north and south Waziristan agencies, the home of Pakistan military’s operations to oust the TTP, were merged within the province of KP in 2019.

While governance problems regarding the sharing of resources between the former KP and FATA continue, FATA has become a more protected and barricaded territory after the merger. And in all certainty, efforts to breach its borders to enter Pakistan would see a stronger retaliation from Pakistan than at any time between 2001 until the merger in 2019. Clearly, the region is on the brink and any disruptions in the current state of affairs, even if for an age-old conflict like the Durand line could mean a potential tip-over in the wrong direction and that the food security and refugee crises in Afghanistan are not met with a supportive and friendly Pakistan and become a permanent malady for Afghanistan and the region. 

Policy Implications and Conclusion

 As the security situation continues to devolve in Afghanistan and while it will risk the lives and livelihoods of the 40 million Afghanis, the crisis could re-enter Pakistan and maybe with a much stronger force than it was during the American presence in the region. Therefore, Pakistan must be cautious in making its diplomatic moves around the Durand line conflict. It cannot allow Durand line to be de-fenced while at the same time it cannot use force in dealing with groups attempting to make breaches to cross the border. Both approaches are likely to intensify matters on the border and take the situation out of the hands of the two governments. As I have stated before, Pakistan must identify stakeholders it wants to engage with in Afghanistan and make them understand that the costs of defencing the Durand line will be much greater for Afghanistan than they will be for Pakistan.

Afghan forces must continue to develop stronger ties with Pakistan and China and ensure that they are sensitive to India-Pakistan dynamic in the region. It is not a region where any state can claim friendly relations with all regional countries. With the rising polarization in South Asia, it will be better for Afghanistan to pick sides which will be vital for its economic sustainability. Durand line is an age-old conflict and the minor breaches that the groups are making to the Pakistan’s fencing attempts might be costly for Afghanistan. If the de-fencing activity is sponsored by the state, it must rethink its strategy of doing so since a potentially unyielding strategic move would cost Afghanistan the trade routes that are critical for its food security needs.

Afghan forces should investigate their ranks to identify and crackdown on forces that are attempting to disrupt peace in the region and dismantling their developing ties with Pakistan. Both sides need to send the right signals and compound confidence building activities to ensure that they can bury the hatchet and move forward. If these moves are not state sponsored, the government in Kabul must come out openly against groups attempting to de-fence as to give an open message to the government in Islamabad of its opposition of the breaches of the Durand line.

 

Asad Ejaz Butt is a public policy professional trained in Economics and International Development Studies with over 10 years’ experience in areas of public financial management reforms and macro-fiscal policies and regulations. He has written quite extensively on the political economy of trade and institutions in South Asia, focusing specifically on documenting the Afghan economy.

Increasing women’s participation in Pakistan’s labour force is beneficial to both economic growth and gender equality. Policy interventions must identify and alleviate barriers to women’s participation by improving access to finance, enhancing digital literacy, and addressing mobility challenges.

The lack of women’s participation in Pakistan’s economy is both a gender equity and developmental concern. The economic case for focusing on women’s economic empowerment is clear: if their participation was at par with men, Pakistan’s GDP could increase by 60% by 2025. Another estimate suggests that closing the gender gap in labour force participation could lead to a one-off 30% boost in GDP.

Globally, women form 38.8% of the labour force, but just around 20% in Pakistan, one of the lowest in South Asia. In fact, Pakistan fares poorly on all gender-related indicators. The Global Gender Gap Index Report 2022 ranked Pakistan at 145 out of 156 countries in terms of women’s economic participation and opportunity, at 135 for women’s educational attainment, 143 for women’s health and survival, and at 95 for political empowerment. The Global Wage Report 2018-19 by International Labour Organization estimated the gender pay gap variation between men and women at 34%. Pakistan also shows the largest gender gaps amongst electrical democracies in voter turn-out, with men being 20% more likely to vote.

The constraints to women’s participation have been discussed and documented at length. These range from the lack of a conducive policy support (such as lack of workplace regulation, maternity leave laws, access to credit and finance) to patriarchal mindsets and social norms that limit women’s mobility and choice to work, including concerns of mobility and access to transport, and the burden of unpaid care and domestic work.

How are researchers helping to find solutions to enhancing women’s empowerment? The research community is now sharing findings from ongoing and completed work that is providing a substantive policymaking direction. We look at some recent IGC research and draw a list of the most compelling policy messages.

1. Investing in gender equality can help build resilience to future shocks.

The COVID-19 pandemic and the climate change crisis is affecting women and deepening gender inequalities within Pakistan. Even when the exposure to a hazard is the same for all, levels of vulnerability, access to resources, and coping skills can greatly vary across genders. This highlights the need to reduce gender gaps and protect women from future shocks as women remain more vulnerable to the adverse impacts of health and economic shocks.

A recent IGC project examined evidence from Pakistan to understand the developmental and poverty outcomes of female labour force participation, particularly in low-income and vulnerable households, and especially in the face of shocks. Findings suggested that if the challenges to female workforce participation are addressed, then developmental and productivity benefits could accumulate at a national level. However, the notion of disaster resilience is still considered largely gender-neutral in Pakistan. The COVID-19 pandemic showed that Pakistani women remained less likely to receive vital information on health safety due to lower levels of education and a lower likelihood of owning a mobile phone or having internet access. The pandemic exacerbated these disparities, with a larger proportion of women than men being pushed into extreme poverty.

2. Unlocking women’s productivity requires a policy intervention on multiple fronts.

Constraints to female entrepreneurship are not just financial. Women need soft skills and training to engage in sustainable economic activity. A recent study tested if low-cost and less intensive training to create aspirations and desire to set goals for the future could help women micro-entrepreneurs. The study found that such interventions had an immediate short-term impact on hard work and perseverance.

Women also face constraints in their ability to market their products and identify marketplaces. They require digital skills and access to markets to be better equipped to conduct business-related activities. An ongoing study by researchers based at University of Delaware is looking at the impact of digital skills training on female labour force participation. The intervention is aimed at women enrolled in skills training centres situated across Punjab, Pakistan.

3. Women that are interested in work may face barriers in their job search.

An area that has received lesser policy attention is the job search process. Data from a in Pakistan reveals differences in how men and women search for jobs, and provides insight into the difficulties women face in labour market participation. These findings indicate that a key obstruction faced by women in their job search is due to their lack of access to networks that can provide information about job vacancies. Potential policy solutions to address such barriers can include organising women collectives for networking, and the creation of opportunities for firms to share job postings outside of their networks.

4. Men and women face different mobility challenges.

Women’s mobility is a real concern in a society that discourages close physical contact between opposite genders. This constrains their choices to participate in the labour force, continue their education, or engage in other independent activities. Women’s mobility is not just limited by the lack of infrastructure but also by women’s agency. A recent study looked at how migration, urbanisation, and the perceived threat or the threat of violence and harassment shapes women’s agency and mobility and determines their access to the market, economic opportunities, and the public sphere in an urban South Asian context. It found that in an urban context, women’s mobility is affected by distinct patriarchal norms within communities, geographic and spatial anxieties due to migrant status and histories of conflict. This study suggests a differentiated employment strategy concerning women’s economic participation, underpinned by social policy that is context-specific and sensitive to the needs of local communities.

5. Inclusiveness in growth demands women’s voices are heard.

States’ effectiveness in responding to women’s needs in service delivery is greatly influenced by voter turnout inequality during elections. Ongoing research by academics based at Yale University is helping to uncover the drivers of the gender gap in voter turnout in the Pakistani context. This research looks at the sub-national variation in voting patterns of women and tries to understand what explains the gap. So far, evidence suggests that weak engagement between political parties and women voters may be an important factor explaining low female electoral participation in urban centres. Women’s political participation is also found to be lower in big cities with greater exposure to political violence.

IGC Pakistan is working directly with Pakistani policymakers to equip them with knowledge and evidence to support their decision-making and design reforms. Pakistani policymakers are also showing a growing commitment to the agenda of women’s empowerment. With more evidence on what works, Pakistan can make progress in empowering millions of women, lifting them and their households out of poverty.

Hina Shaikh is a Country Economist for the International Growth Centre (IGC) in Pakistan.

This blog originally appeared on the International Growth Centre’s (IGC) website here.

Contrasting electricity outage patterns in low- and high-income neighbourhoods in Lahore and Karachi suggest that political control over electricity distribution utilities makes privatisation and market-oriented reforms challenging.

Countries strive to provide affordable, reliable, and efficient supply of electricity to their citizens. Reforms are integral to reaching better standards of public utilities provision. The countries with the highest standards of electricity delivery are the ones who have successfully implemented market-oriented reforms in their energy sector.

The demand for reforms in the energy sector can come from within the country (middle-income consumers asking for better service delivery; commercial and business elite seeking patronage) or from the outside (international lenders pushing for privatisation). Despite such insistence, reforms can be difficult to administer. The concept of public goods, in this case electricity, as a right/entitlement offers insight into why reforms might be opposed by citizens as well as politicians.

Electricity provision in Lahore: politicians as a service assurance channel

Lahore, Pakistan’s second largest city, provides an important test case for whether citizens continue to make claims to the state for utility provision and if this model of state-owned service delivery restricts electricity reforms. Lahore is relatively ethnically and religiously homogenous; it is also electorally competitive and receives considerable attention from political parties hoping to control the centre.

In Lahore, people approach politicians for service-related issues, such as electricity outages or delayed repair/maintenance work. Politicians with contacts in the bureaucracy at Lahore Electricity Supply Corporation (LESCO) – a distribution company that purchases electricity from the national grid – get the issues resolved. Members of National Assembly and Provincial Assembly often hold kutcheris or open forums at their place of residence for precisely this reason – to appear approachable and open to solving voters’ needs.

The ability of politicians to redistribute public goods, by virtue of either their formal power while in office or informal and extra-legal networks, is considered an important dimension of their electoral success. Additionally, they claim credit for electricity supply at subsidised rates.

In Lahore, mid-level bureaucracies have expanded in the last decade, and control over postings has become an important source of power and leverage for parties. Political parties stand to gain electoral benefits by increasing employment for special interest groups, particularly where margins for victory are narrow.

Although, in this system of patronage, there are instances of non-partisan gains where parties stand to benefit by simply ‘being useful’ to the general public, the overall inefficiencies and problems related to public service delivery endemic in the power sector are never addressed. In fact, reforms meant for improvement are resisted.

Electricity as a ‘right’: contrasting policies in Lahore and Karachi

LESCO currently faces challenges with recovering bills from government offices; it also incurs up to 6% in commercial losses from non-payments and theft (LESCO Operational Audit Report, 2011) and has faced the threat of privatisation for decades. It is under considerable pressure to improve bill payments from the national regulator and international lenders. Despite this, the province’s dominant political parties have resisted. Given the patronage and influence of politicians in LESCO, it is not in the interest of either of the two big political parties to privatise the electricity distributor of the region.

Lahore is still sheltered from the worst of electricity outages when compared to other cities of Punjab and Pakistan. Electricity distribution in all areas across Lahore is uniform, despite the 2013 National Power Policy’s recommendation that “load-shedding” [footnote]Load shedding is synonymous with an electricity outage. During load shedding, power distribution companies deliberately reduce electricity consumption by switching off the power supply to a group of customers.[/footnote](should) be focused on areas of high theft and low collections”. This contrasts with the practices of the private distributor (K-Electric) in Karachi, which engages in higher loadshedding in the areas with lower revenue recovery.

Lahore’s indiscriminate power supply, despite revenue losses in the form of theft and non-technical losses, suggests that electricity is perceived as a ‘right’ or ‘an entitlement’. It is to be provided to everyone, regardless of bill recovery and/or paying capacity of the consumers, and not as a commodity (which is how it is treated in Karachi).

K-Electric in Karachi is more likely to aggressively pursue pay-for-use policies, where low-income communities that have more defaulters are likely to get targeted with higher outages.

• • As discovered by previous studies, very low-income neighborhoods (which are high revenue-loss neighborhoods) in Karachi experience over eight hours of outage in the summer. In Lahore, this figure is closer to five hours.

• • On the other hand, an upcoming report by Erum and Javed finds that while higher income (low revenue-loss) neighborhoods in Karachi experience 0-2 hours of outage, even in peak summer months, high income residents in Lahore regularly report 4.5 hours of outage.

• • Preliminary results of the same study suggest that at least as far as outages are concerned, LESCO does not prioritise high-income neighborhoods over low-income ones, and that outages are evenly distributed.

Figure 1: Reported electricity outages for Lahore in past week by income category, September-October 2022.

Note: Irrespective of income level, most households report 1-5 hours of outages in Lahore. Lower-income households (which tend to be in high revenue-loss areas) do not report more hours of electricity outage than more high-income ones.)

Perceptions and patronage as challenges for energy sector reforms

The construction of electricity as entitlement poses problems for reforms in the energy sector. Residents of Lahore enjoy a relatively high degree of service provision, backed by political patronage; in turn, politicians capitalise on the status quo to garner support from their electorate. Resistance to electricity reforms will come, naturally, from both stakeholders. The present subsidies for consumers in the energy sector will be another point of contention when energy sector is reformed. The roll back of subsidies and the subsequent increase in prices are likely to fuel public discontent.

An understanding of perceptions – whether a given public good or service is perceived as a right or as a commodity — is critical to energy reforms in Pakistan. However, these understandings should be coupled with commitments to environmental justice and equitable access. For example, the dual findings of relatively good provision to low-income groups, and a highly mobilised sense of entitlement in Lahore, might pave the way for more diverse forms of energy provisions – decentralised grids and investments in renewable energy to support the demands of the citizens.

Efforts should be made to close the national gap in access to energy across cities, and to continue to shield the most vulnerable citizens from inevitable climate and environmental shocks, that could lead to social unrest and negative impacts on income and livelihoods.

Numair Liaqat is a Country Economist for the International Growth Centre (IGC) in Pakistan.

This blog originally appeared on the International Growth Centre’s (IGC) website here.

For millions of devastated people, the response to Pakistan’s unprecedented flooding came too late. Learning from this is essential to averting and mitigating future crises.

Pakistan is all too familiar with floods and droughts. The country, however, has recently been facing increasingly devastating climate disasters. Unprecedented floods in between June and September 2022, left a third of the country underwater, and displaced close to 33 million people. There was also considerable damage to infrastructure, livestock, and agriculture. Several weeks after the rains had halted, and fields began to dry, large segments of agricultural land still remain waterlogged while infectious diseases continued to spread, with a growing risk of food shortages. So far the current economic loss is estimated at close to 2% of Pakistan’s GDP.

The scale of the flooding has foregrounded climate justice and reparations in local and international policy discourse. It has also highlighted the urgency to treat water sustainability as not just a climate change concern but also a management and governance issue. Moreover, the extent of the losses incurred due to the floods has further exposed Pakistan’s underlying vulnerabilities perpetuated by poverty, colonial legacy, and poor overall governance.

The risks, costs, and impacts of global climate change in Pakistan

The floods have come as a stark reminder to the global community that consequences of climate change are no longer a problem of the future, and the impacts are disproportionately felt by the most vulnerable communities which are not only the least culpable for climate change but also the least capable of withstanding impact.

Fast changing weather patterns have resulted in increased variability of monsoons, repeated occurrence of heatwaves and rapidly melting glaciers that threaten water inflows into river systems causing floods. The Global Climate Risk Index (2021) shows that between 2000 and 2019, climate change induced catastrophes and recurrent floods cost Pakistan US$ 3.8 billion in economic losses and 30 lives per 100,000.

The unprecedented rainfall experienced in Pakistan this year did not only last much longer than usual, but it was also more intense. Instead of the usual four cycles of rain, this monsoon saw more than eight with average rainfall in some places reaching 500% more than the 30-year average. Ironically, these events were preceded by a period of the hottest temperatures ever experienced in Pakistan, reaching almost 52°C in some places. In May 2022, Sindh was declared drought-hit as the agricultural land became completely barren. These anomalous trends are extremely worrisome for a country that is underprepared and call for critical analysis of these annually worsening patterns.

Climate justice in the context of foreign debt

Pakistan’s contribution to global emissions is under 1% compared to over 50% by China, the US, the EU, and India, yet Pakistan is ranked amongst the ten most vulnerable countries to climate change. Two months since the floods, Pakistan is still waiting for the majority of the funds pledged by wealthy nations to arrive. Of the promised US$ 160 million so far only US$ 51 million has been received.

Pakistan’s flood crisis has brought renewed attention to the concept of ‘loss and damage.’ Recognising this would mean countries that gain the most from non-renewable energy and therefore contribute the most to climate change should compensate those adversely affected. A recent study estimated for the first time how much developing countries lose in terms of GDP resulting from burning fossil fuels. In dollar figures the largest emitters, the US and China, cost US$ 60 billion worth of economic losses in Pakistan.

There is now a growing voice within Pakistani policy space, calling for restructuring of Pakistan’s debt and direct climate reparations. Many low-income countries spend on average five times more on paying debt than they do on climate mitigation and adaptation. Pakistan’s floods have mainstreamed policy discussions around debt forgiveness for climate change. There is precedent for this with the US$ 70 billion worth of debt wiped out under the Heavily Indebted Poor Countries Initiative across 37 countries.  Pakistan currently owes US$ 22 billion as foreign debt payments over the fiscal year to international money lenders including IMF, China, and World Bank but so far, there are no plans to freeze Pakistan’s billions of dollars in debt obligations.

Most recent estimates place the economic costs of the floods at close to US$ 30 billion, much higher than initial projection of US$ 10 billion. These losses far exceed the US$ 1·5 billion emergency relief that Pakistan negotiated with the IMF over the past year. International aid has also been slow to come in amidst post-pandemic challenges and Ukraine-Russia war.

A recent IGC piece looks at the role of climate finance in addressing Pakistan’s vulnerability to such climate change incidents and underscores the need for leveraging climate finance and Pakistan’s low contribution to global emissions to improve its fiscal situation

The disproportionate impacts of climate change

These floods’ devastating human and economic costs are disproportionately borne by the poorest and most marginalised. People’s vulnerability to extreme weather and disasters is further exacerbated by underlying power relations, unstable livelihoods, and weak social and personal protection systems. More than 70% of Pakistan’s labour force is employed in the informal sector while the country has one of the lowest spending on social protection as a percentage of GDP across the world.

Slow economic growth: Economic growth for FY23 has fallen from projected 5% to between 1.8% and 2.3%, in line with estimates of lenders like the World Bank. The trade deficit could widen to 3.5% of GDP from 2.4% currently due to the damage in the agriculture sector with economic activity in other sectors such as industry and services expected to slow down.

Lives and livelihoods: Around 9 to 12 million Pakistanis are expected to fall into poverty and 2 million may lose their jobs. Water-borne diseases like—malaria, dengue, typhoid, cholera—are hitting areas where there are no social safety nets. The World Bank estimates more than 8 million displaced people are now facing a health crisis. A recent report by the Population Council  highlights high vulnerability among flood victims. Of those under five, 5.1 million children are in need of immunisation and nutrition care; 940,000 are senior citizens with special needs; and 610,000 are pregnant women who require antenatal, delivery, and postnatal services.

Access to services: Almost 27,000 schools have been destroyed with severe damage to the road network and bridges, causing disruption in the schooling of an estimated 3.5 million children. With the damage to infrastructure, access to energy has also been affected and is concerning given that 60% of the rural population is already without electricity.

Food security: Agriculture makes up nearly a quarter of the country’s economy. The disruption of global food supply chains as a result of Russia-Ukraine War further exacerbated inflationary pressures on food prices. Over 70% of the onion, rice, and corn harvest is feared to have been lost to the floods with almost 3.6 million acres of crops destroyed and a million livestock animals perished. Growth in all major crops like cotton, rice, maize, and sugarcane is expected to remain negative.

A series of analytical pieces by IGC researchers looks at how building resilience to climate change of the most vulnerable is not just an important outcome in itself but also critical to ensure success of large-scale development programmes.

Poor governance and planning exacerbated flooding crisis

Notwithstanding the scale of the floods, recent climate related events have demonstrated federal and provincial governments’ lack of preparedness in mitigating effects of such disasters. A joint study by the World Bank and Asian Development Bank (2021) revealed that Pakistan has high exposure to flooding (ranked eighth). Yet there is a big gap between early warnings and early response. The National Disaster Management Authority (NDMA), Meteorological Department and Flood Control System issued an early warning in June about more than usual rainfall, glacier melts, and the likelihood of super floods in Pakistan. However, the NDMA and Provincial Disaster Management Authority’s (PDMA) all failed to take precautionary measures in time.

Moreover, the water management structure is unable to meet the demands of the population and is hazardous in the face of intensified weather patterns. Over the past decades, donors have funded the construction of many dams, barrages, and irrigation channels which have severely hampered the natural flow of water to the River Indus. These projects have curbed high frequency low-intensity flood events crucial to the ecosystem resulting in less frequent but high intensity events like the 2010 and super floods, worsened of course by climate change.

Climate change impacts have also been exacerbated by lack of governance and weak regulatory policies. Structures along rivers and other water bodies constructed by communities with insecure access to land are extremely vulnerable to flooding and cannot withstand shocks of extreme weather. The absence of comprehensive flood plans leaves entire villages and communities exposed to the risks amplified by climate change. 

Disaster management receives no funding from the national budget, as it’s a provincial subject where provinces are mandated to address these disasters from their own budget. In Pakistan, the 18th Constitutional Amendment devolved key responsibilities for environment, climate change, disaster management, health and education to provinces. However, many years later the process remains in transition, and financial autonomy is a particular concern.

Improving preparedness for future  

Learning from others: Amongst the South Asian Association for Regional Cooperation (SAARC) member states, Bangladesh has taken the lead for both climate change adaptation and investments in disaster risk reduction. Their related sector-wise projects accordingly present a successful case of improving disaster management. In 2019, Bangladesh had a total of 54 such projects while Pakistan’s share remains the lowest with just eight projects. Bangladesh has created a robust institutional mechanism under its Ministry of Disaster and Relief whereby the government has identified priorities that include strengthening existing networks, along with investing in development and research institutes, and provision of accurate assessment of risks through comprehensive hazard mapping for informed planning.

Strengthening social protection: Pakistan at the forefront of climate change, needs shock-responsive social protection systems to address core vulnerabilities to build their resilience. The Ehsaas programme in Pakistan is the largest cash transfer programme in South Asia with a socioeconomic registry spanning 38 million households with only women eligible for the stipend. It is best placed to make decisions about which households need to be targeted for vulnerability to climate change. This has been tried and tested during the COVID-19 pandemic, where emergency cash transfers were immediately provided to 15 million additional families through the information in the registry. This can also be used for shock-response to climate disasters.

Improving land use regulations: With the extent of the damage observed, it is imperative that illegal human encroachment along river corridors/banks should be checked by enforcing land-use regulations.

Encouraging eco-based adaptation: Governments around the world, with support from development partners, are implementing nature-based solutions to the climate crisis referred to as ecosystem-based adaptation. Restoring forests can increase the resilience of ecosystems, prevent soil erosion and reduce the risk of flash floods. The Pakistan government has already launched the Ten Billion Tree Tsunami project, a tree-planting initiative to revive forests and wildlife resources in the country. For example, planting and cultivating mangrove forests has been found to help prevent coastal erosion. Such programmes also create green jobs, and help communities come together.  Other initiatives like Recharge Pakistan look to reduce flood risk and enhance water storage and recharge through wetlands, floodplains and hill-torrents management at six initial sites across the Indus Basin. Lessons emerging from such initiatives should inform scale up.

Evidence and research to inform preparedness

A key challenge governments continue to face in developing and implementing effective adaptation and disaster risk reduction policies is collating accurate data on risks and vulnerabilities to guide policy interventions. To do that granular level data is required and hydro-meteorological observations and remote sensing technologies can be invaluable. Mapping vulnerabilities across different regions can also strengthen the backbone of disaster management in Pakistan. Flood vulnerability mapping as a non-structural strategy can be a precursor to more structural measures in the management of flood risks.

Regional perspective will also help. The trends observed in Pakistan are not unique to the country and have been experienced across Asia. These trends can trigger floods and there is an opportunity for the scientific community to explore links between these events and improve long-term flood forecasting and develop early warning systems at a regional scale so countries can prepare better.

Indeed, the path to recovery is long and uncertain. Pakistan is not a major emitter of greenhouse gases, yet it incurs a huge cost related to climate disasters. Greater investments are needed to enhance capacity and leadership of local governments and communities to respond.

Hina Shaikh is a Country Economist for the International Growth Centre (IGC) in Pakistan.

This blog originally appeared on the International Growth Centre’s (IGC) website here.

Many farmers consider stubble burning as the most effective and cost-efficient way to clear land for the next planting season. However, the environmental and health costs of agricultural stubble burning far outweigh the short-term economic benefits for farmers. This necessitates policy actions that offer environmentally friendly and affordable alternatives for farmers.

Despite the risks and safety concerns, burning of crop residue is an extremely common and widely acceptable practice in Pakistan especially in the rice-wheat belt of the country. Agriculture accounts for a fifth of Pakistan’s GDP and is largely concentrated in the Punjab province. Between October and January every year, out of 8.5 million tonnes of rice residue produced, at least 3.6 to 5 million tons is burnt to clear the fields for sowing wheat. Burning stubble remains the fastest and most affordable way to prepare fields for subsequent planting seasons.

Environmental impact of stubble burning

Around this time, Punjab witnesses a significant deterioration in air quality, while Pakistan’s largest urban centres, Lahore and Karachi already rank amongst the most polluted cities of the world. The sharp increase in air pollution is caused by crop burning fires along with thermal inversion – a meteorological phenomenon in which particulate matter and other pollutants trapped in air, mix with condensed water vapour to form smog. This amplifies and prolongs the smog phenomenon in winters. In fact, Pakistan’s only comprehensive source apportionment study by the Food and Agriculture Organisation (FAO) in 2018 attributes 20% of the air pollutant emissions in Pakistan to crop burning.

Figure 1: Pollution sources in different studies across Pakistan

Note: This graph illustrates the underlying sources of smog in Pakistan as identified by geographic information system – R-SMOG (Source).

Air pollution has many direct and indirect costs; it can cause premature death, reduce work productivity and educational attainment, and can be particularly damaging for pregnant mothers and children. All of this is estimated to cost Pakistan up to 6.5% of its annual GDP. An improvement in Pakistan’s air quality on a scale similar to China’s can lead to an increase in average life expectancy of its residents by 1.2 years. Some of the measures by the Chinese included prohibition of coal-fired power plants in the most polluted regions, restricting the number of cars on the road, and introducing all-electric buses. China also shut down many of its coal mines. Crop burning not only contributes to air pollution but over time it also leads to nutrient loss, depletion of soil organic matter, reduction in beneficial soil biota and soil fertility by 25% to 30%, and it also undermines the soil’s capacity for water retention.

A consequence of market failure?

The excessive reliance on crop burning stems from a market failure around externalities where the true social cost of crop burning is not recognised and exceeds the private costs incurred by farmers while burning stubble. Globally, crop burning remains the largest contributor to black carbon – formed by the incomplete combustion of fossil fuels, wood and other fuels – which disappears after a few weeks but its impact on global warming is several thousand times more than carbon dioxide (found in vehicular emissions). Information asymmetries lead farmers to think they are cost saving by burning stubble and they are often unaware of the adverse long-term implications on the environment, crop productivity and farming costs. If farmers understood the social costs (cost to the health and environment), they may be more willing to adopt alternative methods of residue management with much lower social costs.

However, many farmers lack the tools, knowledge or resources to adopt more environmental-friendly alternatives which include both in-situ and ex-situ mechanisms. Ex-situ residue management methods include biomass power plants and biofuel projects whereas in-situ management of crop residue is through the use of appropriate equipment such as Happy Seeders (discussed below). Often farmers are not fully aware of the alternatives and its harmful effects. Evidence shows farmers aware of negative effects of crop burning are less likely to burn residue. Farmers also lack knowledge about how crop residues can be incorporated back into the soil and the kind nutrients needed for the crops. However, any awareness raising campaign should be run parallel to implementing practical solutions that empower farmers both technically and economically.

The current policy approaches

In 2019, the Government of Punjab introduced a ban on crop burning for one month starting in October each year. The district government, with support from the Agriculture Department can fine up to PKR 50,000 (US$ 300) per acre if a farmer is caught burning stubble. However, enforcement and compliance remain weak especially in the absence of feasible alternatives and agricultural fires continue to occur. Farmers do not find the fine prohibitive, and without access to affordable alternatives, crop burning is likely to persist. Penalising farmers in this situation is not politically viable either and these bans can only be effective if alternatives and information about them is available and accessible.

In 2020, the Punjab Agriculture Department launched a programme to subsidise a bundle of equipment, Rice Straw Shredders and Happy Seeders. They make the rice stubble more manageable and then incorporate it back into the soil, eliminating the need to burn. In 2021, the government decided to pay 80% of the costs (around US$ 2100) to 500 farmers out of 2300 selected through a lottery system. The Happy Seeder equipment can potentially reduce greenhouse gas emissions by 78% per hectare.

Leveraging this random assignment of machinery, a group of researchers based at the IGC1 are planning to evaluate the hypothesised impacts. They will in particular assess whether in the short term, subsidising green technology reduces pollution by shifting farmers away from crop burning. Their on-going study also intends to measure impacts of the technology itself while also investigating factors that influence uptake in the context of heavy government subsidies. Complete residue removal is around 34% costlier for farmers than complete burning and costs approximately US$ 55. The average subsidy required to incentivise farmers to move towards alternatives is anywhere between US$ 11 and US$ 30 per acre. Incidentally, this was the amount that Punjab and Haryana states had planned to pay farmers in 2019. Thus for an approximate 4.6 million acres, it would cost between US$ 50 to US$ 138 million per year.

Exploring other options?

Payments for ecosystem services (PES)

One policy option for reducing stubble burning can be providing payments for ecosystem services (PES), made to farmers who agree to manage land/activities by adopting environmentally and ecologically friendly practices. Such a system can potentially be executed through a conditional cash transfer (CCT) programme via Pakistan’s umbrella social protection platform Ehsaas with support from the Department of Agriculture. Ehsaas manages Pakistan’s flagship and one of South Asia’s largest cash transfer programmes called the Benazir Income Support Programme (BISP).

CCTs have often been used to restore efficiency where externalities exist and/or improve equity by targeting the poor. CCTs that offer PES to reduce crop burning have shown success in India. CCTs can also make alternatives more economically viable and incentivise their adoption by farmers.

The government can use existing infrastructure to roll out this programme. It has in place a Kissan (farmer) card through which eligible farmers can register for and avail such payments digitally. Applications can be verified by local staff and targeting can rely on the socio-economic registry maintained by BISP and the database at the department. Some payment can be made upfront to help build trust and give farmers a financial cushion to purchase/rent Happy Seeders or other equipment. Farmers could then call relevant teams to check compliance before sowing wheat and receive the remaining amount. Overall payments should be large enough to cover the cost of stubble removal.

Boosting demand for bioenergy

About 25% to 40% of any crop has value as food while the rest which is often wasted can be a low-cost source of raw material for bioenergy. However, commercial markets for biomass-energy in Pakistan are not well developed. The total rice and wheat potential available for energy generation in Pakistan is more than 600,000 terajoules with an annual production of approximately 40 million tons. Government intervention can activate these markets and provide farmers an alternative use for crop residue and an opportunity to earn additional income by selling residue. This can also encourage the production of renewable/alternative energy.

For this, the government needs to establish a practical business model and a bio-waste supply chain system that connects farmers to these markets. Government could also setup storage facilities for crop residue in areas with a high incidence of crop burning or rice production. It would also be important to take steps to boost demand for bioenergy that would encourage private sector participation in supply chain operations. This could include estimates of how much residue could potentially be used up, and accordingly create markets for briquettes made from crop-residue; introducing policies mandating neighbouring thermal power plants to co-fire crop residue with coal; initiating minimum usage ratios of crop residue biomass in industrial boilers and biomass electricity generation projects (the Central Electricity Authority of India (CEA) recommends a blend of 5 to 10 % of biomass). In return, farmers can receive compensation through direct deposits into their banks or through their Kissan cards.

To change the well-established habit of crop burning, a lot of effort will be required to provide education, raise awareness, and build capacity of farmers. While it may be a tall order, its impact can be considerable and far-reaching towards a more sustainable future.

Hina Shaikh is a Country Economist for the International Growth Centre (IGC) in Pakistan.

This blog originally appeared on the International Growth Centre’s (IGC) website here.