Economic impact of Pakistan's floods

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    Pakistani flood survivors walk in a flooded street of Charsadda on August 4, 2010. Devastating floods have swept away farmland and devastated livestock in Pakistan's northwest, costing farmers millions of dollars and sparking demands for government compensation.

    - Farooq Naeem/AFP/Getty Images

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    Pakistani flood survivors carry household items through floodwaters in Gulabad.

    - Farooq Naeem/AFP/Getty Images

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    Child survivors of Pakistan's floods sit on a charpoy, or wooden framed bed, outside their destroyed house in a flooded area in Charsadda.

    - Farooq Naeem/AFP/Getty Images

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    Survivors search through the rubble after flash floods destroyed their homes in Gulabad, Pakistan.

    - Farooq Naeem/AFP/Getty Images

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    Flood survivors wait for food supplies at a World Food Program distributing point in Daud Zai, Pakistan.

    - Farooq Naeem/AFP/Getty Images

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    Families set in for the evening in makeshift tent homes on the median strip in Pabi, Pakistan, near Nowshera, after having abandoned flood-destroyed homes -- August 3, 2010.

    - Daniel Berehulak/Getty Images


STEVE CHIOTAKIS: Thousands of Pakistanis in the southern part of that country are trying to make their trek home today. It's been more than a month since monsoon rains began to fall and disastrous floods inundated large parts of that country. At least 2,000 people were killed -- millions, millions of people along the Indus River are homeless. It's a humanitarian, environmental and economic calamity in Pakistan. One that will be felt for years and years beyond now. Anjalika Bardalai is senior analyst covering south Asia for the Economist magazine's Intelligence Unit. She's with us live from London. Hi Anjalika.


CHIOTAKIS: First, let's get an update on what's going
on in Pakistan. Are the waters finally receding there?

BARDALAI: Unfortunately they're not. What we see is that damage is still being done. There has been more flooding in Sindh province in the south of the country just in the past couple of days. We are expecting more severe flooding in some areas in the days ahead and this is basically because monsoon season still has a couple of weeks to run.

CHIOTAKIS: Now we know. Anjalika, whole villages have been swept away by flood waters and people have had to evacuate to higher ground. But what other economic effects are these floods having?

BARDALAI: Well, as you said, it is sort first and foremost a humanitarian disaster, but the economic impact is going to be absolutely enormous. Not only in terms of the reconstruction that will have to be done in terms of physical infrastructure. We expect to see severe impact on inflation -- we've already revised up our inflation forecast. And inflation was already a serious problem, so now it will be merely exacerbated because of the damage to crops and the damage to infrastructure.

CHIOTAKIS: How has the west -- the U.S. and Britain -- seized upon this as not only an opportunity to help the Pakistani people, but to rebuild some trust between the nations that historically hasn't been there?

BARDALAI: That's true. It does sort of present western countries with a massive opportunity. If we look at the U.S., the U.S. has been very active in this crisis. The U.S. has been the single largest bilateral donor, and its response has been very quick and comprehensive. That will definitely help perceptions of the U.S. within Pakistan. But I think the problem is really quite complex. Anti-U.S. sentiment within Pakistan is quite deep and widespread. And it comes from lots of different complex sources. One example is the U.S. drone campaign to target insurgents, which is ongoing. So there are some positive points and some negative points. I think that although western flood relief efforts might help perceptions in the short term, they're actually not likely to have that much impact in the longer term because of all of these other factors that come into play.

CHIOTAKIS: Anjalika Bardalai from the Economist magazine's Intelligence Unit in London. Thank you for your time today.

BARDALAI: Thank you.


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