Pakistan loses whopping $2 billion to climate disasters every year: report

In its latest report, the Asian Development Bank (ADB) has revealed that Pakistan loses a staggering $2 billion per annum to climate related disasters, worsening concerns related to poverty in the cash-strapped economy.

Pakistan is one of the “most climate-vulnerable” economies in South Asia. However, destruction from disaster does not affect every resident uniformly as it disproportionately impacts vulnerable segments of the Pakistani demographic, the report said.

The ADB’s report indicated that women and other groups are hit hardest, resulting in a significant decline in their quality of life.

The institute has attempted to safeguard the disaster-prone country from further calamities by providing financial assistance in 2024, the reports said, revealing that the regional lender extended a $500 million “policy-based” loan to prepare Pakistan against future disasters. These funds were to be utilised for disaster preparedness, response and planning.

The report suggested that the creditors programme assisted Pakistan with disaster modelling, risk mapping and provided financing for initiatives that would reduce the risk of disasters. Furthermore, Pakistan received support for programmes to boost domestic climate resilience.

According to the report, Pakistan’s subscription to ADB’s programme allows it to receive timely disbursements from the lender if a disaster strikes the country. With floods usually occurring during the summer season, particularly June to August, many believe that the availability of funds to combat potential disasters in the upcoming months could provide a safety net to victims.

The regional creditor highlighted the issues faced by Central and South Asian economies, notably outlining Pakistan's poverty related woes.

The report revealed that the ADB had allocated a staggering $330 million to provide social protection to 9.3 million Pakistanis, aimed at helping alleviate financial strain on poverty-stricken households, providing education to children and boosting access to healthcare services.

One of the primary factors behind declining living standards and persistently high poverty rates is the ballooning of Pakistan's urban population. Reports indicate that urban areas suffer from significant planning issues, resulting in housing shortages and ultimately, high living costs.

The rise in the cost of living has resulted in a significant decline in the standard of living for rural to urban migrants as they do not own residences in the urban areas. 

However, Islamabad seems to be taking independent steps towards sustainable growth as well. The government has raised the petroleum development levy and is focusing on hydropower projects. 

The federal government recently also issued Sukuk bonds to raise funds to develop three hydropower infrastructure projects that could reduce the incidence of widespread flooding while also generating power.