Climate "Loss and Damage": Pakistan Gets Flood Aid Pledges of $10 Billion

[Riaz Haq]

Pakistan has received pledges of $10 billion worth of loans and grants to rebuild after devastating floods last year, according to Bloomberg News. The amount pledged exceeds the $8 billion that Pakistan sought at the United Nations Donors Conference that concluded today in Geneva, Switzerland. The massive floods affected 33 million people living on vast swathes of land in rural Sindh and Balochistan. The flood waters killed an estimated 1700 people and  millions of animals. The floods also washed away millions of acres of standing crops, tens of thousands of homes and thousands of kilometers of roads. The total flood damage is estimated at $33 billion in economic losses, and cost of rebuilding is estimated at $16.5 billion. Prime Minister Shahbaz Sharif and U.N. Secretary-General António Guterres attended in-person, while world leaders such as French President Emmanuel Macron and Turkish President Recep Tayyip Erdoğan took part virtually. 

UN Donors Conference For Pakistan Flood Aid in Geneva, Switzerland....

UN Secretary General  António Guterres has passionately advocated for immediate help for the people in Pakistan affected by the severe floods resulting from climate change.  “We need to be honest about the brutal injustice of loss and damage suffered by developing countries because of climate change,” he told the gathering in Geneva. “If there is any doubt about loss and damage – go to Pakistan. There is loss. There is damage. The devastation of climate change is real.” Mr. Guterres added that people in South Asia are 15 times more likely to die from climate impacts than elsewhere, and his “heart broke” when he saw the devastation left behind from Pakistan’s floods. “No country deserves to endure what happened to Pakistan,” he said. “But it was especially bitter to watch that country’s generous spirit being repaid with a climate disaster of monumental scale.”  

After receiving the pledges, Prime Minister Sharif assured all donors and lenders that "every penny will be used in a transparent fashion. He said his government has prepared a comprehensive “4RF” framework, to strive for “recovery, rehabilitation, reconstruction and resilience”. 

Jeddah-based Islamic Development Bank pledged $4.2 billion accounting for the largest share of the total amount of $10 billion. The World Bank pledged $2 billion, Asian Development Bank $1.5 billion, France $345 million, China $100 million, US $100 million, European Union $93 million, Germany $88 million and Japan $77 million. 

At COP27, the United Nations climate summit, Pakistan led the fight for funding to compensate nations for “loss and damage”. Pakistan had the support of 134 developing nations. Earlier at COP26 in Scotland, discussions were mainly focused on funding "mitigation" and "adaptation", not compensation for "loss and damage".  

Pakistan Pavilion at COP27 Conference in Sharm Al-Sheikh, Egypt

The "loss and damage" agenda item was first proposed by Pakistan during talks at Bonn after the country suffered heavy losses in unprecedented floods that hit a third of the country.  “My country, Pakistan, has seen floods that have left 33 million lives in tatters and have caused loss and damage amounting to 10% of the GDP,” said Ambassador Munir Akram, the 2022 chair of the G77—a group of 134 developing countries, at the opening session of COP27 at Sharm al-Sheikh, Egypt. 

Cumulative CO2 Emissions By Country/Region. Source: The World

Pakistan has contributed only 0.28% of the CO2 emissions but it is among the biggest victims of climate change. The US, Europe, India, China and Japan, the world's biggest polluters, must accept responsibility for the catastrophic floods in Pakistan and climate disasters elsewhere. A direct link of the disaster in Pakistan to climate change has been confirmed by a team of 26 scientists affiliated with World Weather Attribution, a research initiative that specializes in rapid studies of extreme events, according to the New York Times. 

Top 5 Current Polluters. Source: Our World in Data

Currently, the biggest annual CO2 emitters are China, the US, India and Russia. Pakistan's annual CO2 emissions add up to just 235 million tons. On the other hand, China contributes 11.7 billion tons, the United States 4.5 billion tons, India 2.4 billion tons, Russia 1.6 billion tons and Japan 1.06 billion tons. 

Pakistan's Annual CO2 Emission. Source: Our World in Data

The United States has contributed 399 billion tons (25%) of CO2 emissions, the highest cumulative carbon emissions since the start of the Industrial Revolution in the late 18th century. The 28 countries of the European Union (EU28), including the United Kingdom, come in second with 353 billion tons of CO2 (22%), followed by China with 200 billion tons (12.7%). 

Cumulative CO2 Emissions. Source: Our World in Data

Pakistan's cumulative CO2 contribution in its entire history is just 4.4 billion tons (0.28%). Among Pakistan's neighbors, China's cumulative contribution is 200 billion tons (12.7%),  India's 48 billion tons (3%) and Iran's 17 billion tons (1%).  

Developing Asian Nations' CO2 Emissions. Source: Our World in Data

Pakistan has contributed little to climate change but it has become one of its biggest victims. In the 2015 Paris agreement on climate change, signatories agreed to recognize and “address” the loss and damage caused by those dangerous climate impacts, according to the Washington Post. In 2021, at the major U.N. climate conference in Glasgow, Scotland, negotiators from developing countries tried to establish a formal fund to help the countries like Pakistan most affected by climate disasters. It was blocked by rich countries led by the Biden administration. Pakistan finally succeeded in acceptance of "loss and damage" at COP27 conference in 2022. The UN-sponsored Pakistan Donors Conference in Geneva this year is an important milestone and a good start toward practically helping the victims of climate change in developing nations.   

Related Links:

Haq's Musings

South Asia Investor Review

Catastrophic Floods in Pakistan

Pakistan Led "Loss and Damage" Demand at COP27 in Sharm El-Sheikh

Biggest Polluters Must Pay For Flood Damage in Pakistan

Cycles of Drought and Floods in Pakistan

Pakistan at 75: Economic and Demographic Progress

Dust Bowl in Thar Desert Region

Angelina Jolie Used Star Power to Help Pakistan Flood Victims

Bridge Collapse After Sudden Glacier Melt in Pakistan

Riaz Haq's Youtube Channel

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[Riaz Haq]

Pakistan: Flood Damages and Economic Losses Over USD 30 billion and Reconstruction Needs Over USD 16 billion - New Assessment

https://www.worldbank.org/en/news/press-release/2022/10/28/pakistan...


Post-Disaster Needs Assessment calls for urgent support to implement a Recovery and Reconstruction that ‘Builds Back Better’


ISLAMABAD, October 28, 2022- A damage, loss, and needs assessment following the unprecedented floods in Pakistan calls for ‘building back better’, based on the principles of the poor first, transparency, inclusion, and climate resilience. The assessment estimates total damages to exceed USD 14.9 billion, and total economic losses to reach about USD 15.2 billion. Estimated needs for rehabilitation and reconstruction in a resilient way are at least USD 16.3 billion, not including much needed new investments beyond the affected assets, to support Pakistan’s adaptation to climate change and overall resilience of the country to future climate shocks.

Housing; Agriculture and Livestock; and Transport and Communications sectors suffered the most significant damage, at USD 5.6 billion, USD 3.7 billion, and USD 3.3 billion, respectively. Sindh is the worst affected province with close to 70 percent of total damages and losses, followed by Balochistan, Khyber Pakhtunkhwa, and Punjab.

The Ministry of Planning, Development and Special Initiatives led the Post-Disaster Needs Assessment (PDNA), which was conducted jointly with the Asian Development Bank (ADB), the European Union (EU), the United Nations agencies with technical facilitation by the United Nations Development Programme (UNDP), and the World Bank. The PDNA, in addition to estimating damages, economic losses and recovery and reconstruction needs, also assesses broader macro-economic and human impacts and recommends principles along which to develop a comprehensive recovery and reconstruction framework.

The floods affected 33 million people and more than 1730 lost their lives. They are particularly impacting the poorest and most vulnerable districts. The situation is still evolving, with flood waters stagnant in many areas, causing water-borne and vector-borne diseases to spread, and more than 8 million displaced people now facing a health crisis. The crisis thus risks having profound and lasting impacts on lives and livelihoods. Loss of household incomes, assets, rising food prices, and disease outbreaks are impacting the most vulnerable groups. Women have suffered notable losses of their livelihoods, particularly those associated with agriculture and livestock.

The PDNA Human Impact Assessment highlights that the national poverty rate may increase by 3.7 to 4.0 percentage points, potentially pushing between 8.4 and 9.1 million more people below the poverty line.

Multidimensional poverty can potentially increase by 5.9 percentage points, implying that an additional 1.9 million households are at risk of being pushed into non-monetary poverty.

Compounding the existing economic difficulties facing the country, the 2022 floods are expected to have a significant adverse impact on output, which will vary substantially by region and sector. Loss in gross domestic product (GDP) as a direct impact of the floods is projected to be around 2.2 percent of FY22 GDP. The agriculture sector is projected to contract the most, at 0.9 percent of GDP. The damage and losses in agriculture will have spillover effects on the industry, external trade and services sectors.

[Riaz Haq]

Post-Disaster Needs Assessment calls for urgent support to implement a Recovery and Reconstruction that ‘Builds Back Better’

https://www.worldbank.org/en/news/press-release/2022/10/28/pakistan...


The Government is providing immediate relief to the impacted communities and supporting the early recovery, while aiming to ensure macroeconomic stability and fiscal sustainability. Moving forward, as recovery and reconstruction spending rises, the loss in output could be mitigated. Yet, significant international support will be needed to complement Pakistan’s own commitment to increase domestic revenue mobilization and save scarce public resources, and to reduce the risk of exacerbating macroeconomic imbalances.

Although the early loss and damage estimates may increase as the situation is continuously evolving on the ground, the PDNA lays the groundwork for an agenda for recovery and reconstruction that is designed to build back a better future for the most affected people in Pakistan. While the recovery will require massive efforts for the rehabilitation and reconstruction of damaged infrastructure, buildings and livelihoods, it will also be an opportunity to strengthen institutions and governance structures.

The report puts forth recommendations for developing a comprehensive recovery framework. While the primary focus will be on the affected areas, such framework presents an opportunity to embed systemic resilience to natural hazards and climate change in Pakistan’s overall development planning. This tragic disaster can be a turning point, where climate resilience and adaptation, increased domestic revenue mobilization and better public spending, and public policies and investments better targeted to the most vulnerable populations; all figure at the core of policy making going forward.

In the short term, targeted mechanisms such as social assistance and emergency cash transfers, provision of emergency health services, and programs to restore shelter and restart local economic activities, particularly in agriculture, should be prioritized. Reconstruction and rehabilitation should rest on key principles of: participatory, transparent, inclusive, and green recovery for long-term resilience—“building back better”; pro-poor, pro-vulnerable, and gender sensitive, targeting the most affected; strong coordination of government tiers and implementation by the lowest appropriate level; synergies between humanitarian effort and recovery; and a sustainable financing plan.

Given Pakistan’s limited fiscal resources, significant international support and private investment will be essential for a comprehensive and resilient recovery. The Pakistani authorities are committed to accelerate reforms to generate additional domestic fiscal resources and improve efficiency and targeting of public spending. Beyond the immediate needs of floods reconstruction, these reforms, while protecting the most vulnerable, will be important to generate fiscal space to invest more broadly into more climate-resilient infrastructure and adaptation to climate change, as well as to build buffers to face future shocks, while addressing macroeconomic imbalances. This commitment of the Government will also be key to mobilize further international support as well as to unlock private sector sources of financing—both of which will be absolutely critical to face the current climate change-induced shock.

The ADB, the EU, the UNDP and the World Bank are fully committed to working with the Government and people of Pakistan during the ensuing recovery phase, and to increase the country’s climate resilience.

[Riaz Haq]

Banks and countries pledge over $9bn to rebuild Pakistan after catastrophic floods

https://www.theguardian.com/global-development/2023/jan/10/banks-an...

International funders join Pakistan PM and UN secretary general in Geneva to agree recovery plan following ‘monsoon on steroids’

The international community has promised more than $9bn (£7.4bn) to help Pakistan rebuild after last summer’s catastrophic floods, described by UN secretary general António Guterres as a “monsoon on steroids.”

The pledges were made on Monday at the International Conference on Climate Resilient Pakistan in Geneva, Switzerland, hosted by Pakistan’s prime minister Muhammad Shehbaz Sharif and Guterres.

Sharif has said Pakistan needs a minimum of $16.3bn over the next three years to begin recovery and reconstruction, half of which will be met by domestic resources.

The largest commitment on Monday – $4.2bn – came from the Islamic Development Bank Group. World Bank vice-president for South Asia, Martin Raiser, announced a $2bn contribution. Other contributors included the Asian Infrastructure Investment Bank, Saudi Arabia, the EU, Japan and China.


Heavy rains which started in June last year and continued until August caused Pakistan’s worst ever flooding, submerging one-third of the country. More than 4 million acres of agricultural land were inundated, resulting in a food crisis and huge financial losses.

The disaster affected at least 33 million people, killing more than 17,000 and leaving 8 million homeless.

Women and children were particularly badly affected. According to Unicef, up to 4 million children are still living near contaminated and stagnant flood waters. The number of children suffering from severe acute malnutrition in flood-affected areas nearly doubled between July and December 2022, compared with the same period in 2021, the charity reported on Monday. It also said that the number of acute respiratory infections among children has soared in flood-stricken areas.

On Monday, Médecins Sans Frontières (MSF) warned that it was seeing alarming health issues in flood-hit areas, with malaria positivity rates running at 50% in Sindh and eastern Balochistan in December, despite the colder season, when malaria infections would be expected to decline.

“We are still in an emergency phase,” said Edward Taylor, MSF’s emergency coordinator in northern Sindh and eastern Balochistan.

Speaking at Monday’s conference, Sharif said the world was standing at a “turning point of history”, adding: “It’s not only a question of how to survive … it’s how to maintain our dignity and honour – by moving forward with a sense of purpose and a sense of achievement.”

Guterres called for help to rebuild Pakistan, declaring: “No country deserves to endure what happened to Pakistan.”

He told the conference that Pakistan is doubly victimised by climate chaos and a morally bankrupt global financial system. “Above all, we need to be honest about the brutal injustice of loss and damage suffered by developing countries because of climate change. If there is any doubt about loss and damage – go to Pakistan.”

Pakistan was hit by the floods at a time while already experiencing an economic crisis, and continues to face financial challenges, resulting in record-level inflation.

Sharif said his government has prepared a comprehensive “4RF” framework, to strive for “recovery, rehabilitation, reconstruction and resilience”. “I want to make this statement categorically. Every penny will be used in a transparent fashion. I have put in place a third-party validation mechanism that every penny is accounted for and invested in the interests of needy people who have been badly affected by these ferocious floods,” he said.

[Riaz Haq]

Michael Kugelman
@MichaelKugelman
A major feat for Pakistan, in an era of economic strain and donor fatigue, to secure $10B in pledges for flood relief.
But it’ll take time to get these pledges finalized and delivered. With 25M in desperate need of food & health aid, the govt can’t afford to rest on its laurels.


https://twitter.com/MichaelKugelman/status/1612883732230475778?s=20...

[Riaz Haq]

Saudi Arabia is considering providing up to $11 billion to #Pakistan, a potential lifeline to a country facing default. #Qatar and #UAE are likely to join #SaudiArabia for up to $22 billion package of #loans and #investments for the country.

https://www.wsj.com/articles/saudi-arabia-signals-it-could-provide-...

ISLAMABAD, Pakistan—Saudi Arabia said Tuesday that it was considering providing up to $11 billion to Pakistan, a potential lifeline to a country facing default.

The United Arab Emirates and Qatar in recent months have said they might also offer help to Pakistan, with potential loans and investments from Gulf nations now totaling at least $22 billion after the latest announcement from Riyadh. Gulf countries have said they could extend a similar level of support to Egypt, which is also struggling economically.

The support from Saudi Arabia could strengthen Pakistan’s hand in negotiating a restart to a stalled bailout from the International Monetary Fund. Islamabad has so far been unwilling to agree to the IMF’s terms for a deal, which include raising electricity and gasoline prices and increasing taxes.

The country’s foreign-currency reserves are fast running out, with financial markets hoping that the IMF program can be put back on track within days.


Pakistan has only around $4.5 billion in official foreign-currency reserves, financial analysts estimate. In January and February this year it is due to repay debt of $6.4 billion, according to figures from the central bank. By December, it must repay a further $12.8 billion, according to the central bank.

Saudi Arabia said Tuesday that it would study increasing its investment plans for Pakistan to $10 billion from $1 billion and would also study raising its loan deposit with Pakistan’s central bank to $5 billion from the current $3 billion, “confirming the Kingdom’s position supportive to the economy of the Islamic Republic of Pakistan and its sisterly people.”

The news followed a visit by Pakistan’s new army chief, Gen. Asim Munir, to Saudi Arabia, where he met Crown Prince Mohammad bin Salman. In the meeting, “they reviewed bilateral relations and the ways of enhancing them,” Riyadh said Monday.

Pakistan is a close partner to Saudi Arabia, including providing soldiers for guarding sites and training Saudi troops. Millions of Pakistanis work in Saudi Arabia.

Pakistan has also drawn in recent months on its other close allies, in the Gulf and China, as it struggles to repay loans taken out over the last decade.

Pakistani Prime Minister Shehbaz Sharif will visit the U.A.E. later this week, and Islamabad hopes his hosts will roll over a $2 billion loan due to mature shortly and provide additional financing. The U.A.E. pledged last year to invest around $2 billion in Pakistan. Qatar has said it would invest $3 billion in Pakistan.

None of the Gulf nations’ investment plans, mostly likely to involve the purchase of state-owned enterprises, have so far materialized. Saudi Arabia has also floated the idea of building a large oil refinery in Pakistan.

China has provided a $4 billion loan deposit with Pakistan’s central bank. Around a third of Pakistan’s debt is held by Beijing. In recent years, Beijing has carried out a multibillion-dollar infrastructure-building program in the country, a showcase for its global Belt and Road Initiative, which seeks to spread Chinese influence through large construction projects.

There are few ready investment opportunities in Pakistan for Gulf nations, while its cash needs are immediate, said Samiullah Tariq, head of research at Pakistan Kuwait Investment Company, a local financing group. Despite the Saudi announcement, Pakistan still needs the IMF, he said.

“There is a liquidity crunch,” said Mr. Tariq. “We need the money right away.”

[Riaz Haq]

ZAKARIA: A new year means a fresh start, right? Well, that can be true for you and me with resolutions and the like, but not for global politics. For starters, the war in Ukraine hasn't stopped, indeed it's been heating up. And the threat of China invading Taiwan didn't disappear when the clock struck 12:00 on the 31st. So what are the biggest risks of 2023?

https://transcripts.cnn.com/show/fzgps/date/2023-01-08/segment/01


BREMMER: And yet it's not where the population actually is. The United States' population, like Canada, like Europe, like Japan, is a bell curve, right? We see that on issues like abortion.

Most Americans don't want abortion always to be legal in every case, and they don't want it to always be illegal and banned in every case. They want it to be safe and rare and legal. And 13, 15 weeks is where you kind of hit, right? And we've seen 50 years as a compromise it allowed that. And unfortunately, the politics moved in a much more extreme direction.

Social media and algorithmic alignment is basically taking the smallest portions of the population making them the loudest, making them the most profitable, making them move politics. And the United States is not principally at risk from this. It's the weaker, more brittle democracies that are in the most danger.

ZAKARIA: You talk about an energy crunch. Help us understand what is going to -- what is the world of energy going to look like with all the problems that we have, the Russia/Ukraine war, all the rest of it?

BREMMER: Two big issues in 2023. The first is the fact that the Europeans are fundamentally decoupled from Russia, especially when it comes to gas. It means that their input costs are structurally so much higher for the foreseeable future, from the United States, from the western hemisphere and from much of Asia.

And what that means is de-industrialization. A lot of their corporations are just going to leave and they're not going to come back. It's a real negative impact on Europe.

Second, the Europeans at least have the money when things get ugly to pay for the inputs to ensure that their middle classes, their working classes are taken care of. The developing world does not. So, if you're not a commodity exporter in the developing world, you're going to face a serious fiscal crunch, lots more social instability, maybe emerging market financial crisis.

[10:35:03]

ZAKARIA: I want to end on that point. You talk about arrested global development. This is something that strikes me. You know, we have spent the last few years talking about, oh, you know, we overdid globalization, we overdid, you know, market reforms.

The problem is, the only way to grow, the only way to raise incomes is by embracing markets and trade and all that. And all of these developments, the populist wave that has shutdown a lot of that, and brought tariff barriers up, you can see the data. It's the poorest people in the poorest countries of the world who are struggling. BREMMER: And particularly the women in the poorest part of the world. And through the pandemic and through the Russian invasion, and through the populist backlash, you now have all these structural realities that mean that poorest countries in the world cannot take care of their poor.

And so, instead of every year moving more people out of poverty as we have for decades we are now seeing the world move more people into poverty, move them out of the schools, move them into the informal economy, increasingly even moving them into sexual trafficking, for example, human trafficking, forced marriage. Nobody wants to see a world that looks like it's anti-progress. And yet for a majority of the world's 8 billion in 2023, progress is not for them.

[Riaz Haq]

ZAKARIA: 2022 was a rocky year for the economy. Growth slowed, inflation ran rampant, and the stock market plummeted. What will the economy look like in 2023? Investor and writer Ruchir Sharma has a new piece in the "Financial Times" laying out some big shifts he expects to see this year and beyond. Ruchir, welcome.

https://transcripts.cnn.com/show/fzgps/date/2023-01-08/segment/01


ZAKARIA: And the best example of this is, of course, Liz Truss in Britain, right?

SHARMA: Yes. That's the best example and the most prominent example. And then you have lots of other countries now all of a sudden facing the prospect of default. So many countries in Africa, even in places such as Pakistan, Egypt, all these are struggling just now. And the political leaders in all these countries are now being forced to bow to the markets and do what the markets are telling them, which is that you have got to have fiscal rectitude, you've got to have monetary orthodoxy, or you end up becoming a Turkey and Argentina that's kicked off the grid and loses complete access to funding and markets and become economic basket cases.

ZAKARIA: It reminds of when Clinton came to power, that whole White House, 1992, was terrified about the bond market. You know, James Carville used to joke, when I get reincarnated, I want to come back as the bond market because the bond market scares the hell out of everyone.

Well, for 30 years people forgot about the bond market. And now the bond market is really back, except in one country. I want to ask you about the United States, where we seem to think because of the dollar, we can print as much money as we want. But you say we may be at peak dollar.

SHARMA: Yes. I think, there's a lot of hubris on that. But even if you look at America it clearly made a mistake in the amount of stimulus that they put to work. We are seeing the consequences of that. Still relatively high inflation, even though it's coming off, and all this monetary tightening. And look at the stock market, very tough year in 2022.

So I think that there are consequences of this which even America is facing. But yes, there is still hubris but because of the reserved currency we can get away with it. And my warning is, don't be so confident, that we have seen what happened in the U.K., we have seen, you know, what has happened in so many other countries. The markets really get in a punishing mood, their sentiment can turn very abruptly.

The dollar has had incredible value over the last few years, but I think the seeds are now being sown for why the demise of the dollar may have begun. The dollar has peaked against most major currencies. And also, Fareed, this very important geopolitical point, which is the fact that even though America used sanctions, and you can argue if it was morally correct to use those sanctions against Russia, but the way it used the sanctions by weaponizing the dollar, that I think will have long-term consequences. There are so many countries around the world now which are thinking that they could also -- even though it may be an irrational fear, that fear has crept in, that maybe even they could face such an event. And so --

ZAKARIA: And the only solution is get out of dollars.

SHARMA: Exactly. In terms trying trade directly in your own currency.

[Riaz Haq]

World Bank Cuts 2023 Global Growth Projection as Inflation Persists
China and Ukraine inject uncertainty into world economy

https://www.wsj.com/articles/world-bank-cuts-2023-global-growth-pro...

The forecast growth rate only narrowly keeps the global economy out of recession territory. The international development organization cited a coalescence of high inflation, rising interest rates, lower investment and Russia’s invasion of Ukraine as threats to growth, along with pandemic-related disruptions in China and stress in its real-estate sector.

“Global growth has slowed to the extent that the global economy is perilously close to falling into recession,” the World Bank said in its latest report on global economic prospects. World Bank President David Malpass told reporters Tuesday he is “deeply concerned that the slowdown may persist.”


----

“Inflation won’t quite go down the way people expected,” Mr. Dimon said. “But it will definitely be coming down a bit.”

Some economists have projected that both the U.S. and parts of Europe could slip into a recession for a portion of 2023. A global recession, defined as a contraction in annual global per capita income, is more rare because China and emerging markets often grow faster than more developed economies. Essentially the world economy is considered to be in recession if economic growth falls behind population growth.

For all of 2023, the World Bank forecasts U.S. gross domestic product will increase 0.5% from the prior year, and expects no growth for the eurozone. The bank predicts China’s GDP will increase 4.3% in 2023 from the prior year, an uptick from an estimate of 2.7% growth last year. Emerging market and developing economies are projected to expand 3.4%, a steady rate of growth from 2022’s expansion.

Russian GDP is forecast to contract 3.3% after falling 3.5% in 2022, as sanctions continue to weigh on spending and investment, the bank said.

Elevated inflation is keeping pressure on global central banks to tighten monetary policy, which subsequently slows investment and the broader economy.


The World Bank called on global central banks to remain alert to the risk that aggressively tightening monetary policy to fight inflation could spill across borders. The new report called for discussions between central bankers to “help mitigate risks associated with financial stability and avoid an excessive global economic slowdown in the pursuit of inflation objectives.”

Federal Reserve Chairman Jerome Powell, speaking in Stockholm Tuesday, reiterated the central bank’s commitment to bringing down inflation, even though he said interest-rate increases could fuel political blowback.

“Price stability is the bedrock of a healthy economy and provides the public with immeasurable benefits over time,” Mr. Powell said. “But restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy.”

Central banks rapidly raised interest rates last year to combat high inflation, and are expected to fine-tune their approach this year as rates reach levels that are likely to weigh on economic growth. In the U.S., the labor market remained strong through 2022’s end, suggesting the Federal Reserve rapid rate rises haven’t yet significantly cooled demand.

---------

The World Bank has previously said that developing countries have amassed high levels of debt that could be difficult to repay as the global economy slows and interest rates rise.

“Further adverse shocks could push the global economy into yet another recession,” the report said, adding that “small states are especially vulnerable to such shocks because of the reliance on external trade and financing, limited economic diversification, elevated debt, and susceptibility to natural disasters.”

[Riaz Haq]

Bilal I Gilani
@bilalgilani
(Pakistan) Ministry of Finance has created this proxy indicator for growth of economy that they update every month ( given GDP can't be calculated every month )

The MEI growth rate topped just before VONC

Since then it's fallen and last month it was negative meaning GDP contracted

https://twitter.com/bilalgilani/status/1613236346339852289?s=20&...

----------
Monthly
December 2022
ECONOMIC UPDATE & OUTLOOK

Pakistan

https://www.finance.gov.pk/economic/economic_update_December_2022.pdf

Most of the high frequency indicators
showing the signs of lower growth since
the start of the current FY as the
economic situation is faced with severe
headwinds both at global and domestic
ends. These are reflected in the MEI
which continues to remain on a lower
path of economic expansion. However,
the Government is taking all possible
measures to counter the downside risks
and supporting the incomes of the most
needed as well as crucial sectors of the
economy. As a result, contraction or
recession as of yet been avoided.

----------

During January-November 2022 Bureau
of Emigration and Overseas Employment
has registered 762,767 emigrants and
71055 emigrants during November, 2022
for overseas employment in different
countries.
According to WHO, cases of malaria,
cholera, acute watery diarrheal diseases,
and dengue fever are declining in most of
the flood-affected districts. Overall,
malaria cases have reduced to around
50,000 from over 100,000 confirmed
cases in early October. Malaria cases
have declined by 25% in Balochistan, 58%
in Khyber Pakhtunkhwa (KP) and 67% in
Sindh provinces. However, high malaria
and cholera cases are still being reported
in some pocket districts in Sindh and
Balochistan where standing water
remains. In November 2022, around 70
suspected cases of Diphtheria were
reported from the flood-affected
provinces of KP, Sindh, and Punjab.
There are about 1.6 million children with
Severe Acute Malnutrition (SAM) across
all the flood-affected districts who need
treatment with Ready to Use Therapeutic
Food (RUTF). About 400,000 of these
children are in the 34 Government High
Priority Districts (GHPD). Bridging the
nutrition budget gap for an aggressive
sector-wide response is therefore very
critical. (OCHA, Flood situation report on
Pakistan, December, 06, 2022).

[Riaz Haq]

UAE pledges $3bn loan to help cash-strapped ally Pakistan
The existing loan of $2bn will be topped with an additional loan of $1bn

https://www.aljazeera.com/news/2023/1/12/uae-extends-existing-loan-...

The United Arab Emirates is pledging a $1bn loan to cash-strapped Pakistan and also agreed to roll over an existing loan of $2bn in a boost to the South Asian nation grappling with an economic crisis, according to Pakistan prime minister’s office.

The announcement came after Pakistani Prime Minister Shehbaz Sharif held talks with UAE President Sheikh Mohamed bin Zayed Al Nahyan in the capital Abu Dhabi on Thursday on his third visit to the Gulf country after taking office last April.

The two leaders “agreed to deepen the investment cooperation, stimulate partnerships and enable investment integration opportunities between the two countries,” a PMO statement said.

Sharif has been struggling to put the economy on track since taking office, with his first finance minister Miftah Ismail resigning abruptly last September.

Islamabad is seeking financial aid from its close allies such as Saudi Arabia and China, besides the UAE as it negotiates for the next tranche of loans from the International Monetary Fund (IMF).

Ismail told Al Jazeera that the decision to roll over the fund is “great news to Pakistan”, and the announcement was seen by some analysts as a much-needed relief to the country which has seen its central bank’s foreign reserves deplete to less than $4.5bn, covering less than a month of imports.

Ammar Habib Khan, an Islamabad-based economist, said that the additional funding would provide timely support to Pakistan’s precarious economy.

On Wednesday, the World Bank slashed the gross domestic product (GDP) growth projections to 2 percent. The dire economic situation has forced the government to resort to extreme steps, such as closing malls and restaurants early.

“This funding will provide some support to Pakistan to manage its imports. However, to get out of the crisis, it does need more injection of dollars, necessitating continuation of the International Monetary Fund programme,” he told Al Jazeera.

Pakistan has struggled to convince the IMF to release the next tranche of $1.1bn loans, which has been pending since September on account of deadlock between the two parties.