Pakistan faces acute food shortage after months of flooding


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Pakistan is grappling with a shortage of food after deadly floods left the impoverished country’s agricultural belt underwater, the prime minister told the Turkish president by phone, as authorities intensified efforts on Monday to deliver aid.

Shahbaz Sharif spoke to President Recep Tayyip Erdogan overnight to thank Turkey for sending food, tents and medicine by 12 military aircraft, four trains and Turkish Red Crescent lorries.

The International Rescue Committee estimated that the floods have damaged about 1.5 million hectares of crops in Pakistan.

A government statement said Mr Sharif had briefed Mr Erdogan about the government’s relief activities and sought assistance from Turkey in overcoming the “food shortage”. The prime minister also sought help from Turkey on reconstruction work in the flood-hit areas.

More than 660,000 people are living at relief camps and in makeshift homes after floods damaged their homes and forced them to move to safer places.

Pakistan, the country’s military, United Nations agencies and local charities are providing food to these flood victims.

Pakistan heavily relies on its agriculture and occasionally exports its surplus wheat to Afghanistan and other countries. Now it is in talks to import badly needed wheat and vegetables.

Meanwhile, the price of vegetables and other food has started increasing.

Until last week, floodwater was covering about a third of Pakistan, including the agricultural belt in the eastern Punjab and southern Sundh provinces which are the main sources of food domestically. Initially, Pakistan said the floods had caused $10 billion of damage but authorities now believe it to be a far greater amount.

In response, UN agencies and various countries, including the US, have sent more than 60 planeloads of aid. Since last week, Washington has sent three military planes to deliver food.

Three more military planes carrying aid landed in Pakistan’s worst flood-hit southern Sindh province on Monday, a Foreign Ministry statement said. To date, 10 such flights have arrived in the area.

Washington set up a humanitarian air bridge to deliver aid via 20 flights, which will arrive in Pakistan before September 16. The US authorities also plan to distribute cash among needy people.

A team of doctors travels to flooded areas of Pakistan by boat. Reuters
A team of doctors travels to flooded areas of Pakistan by boat. Reuters

Last week, UN Secretary General Antonio Guterres visited flood-hit areas and called on the world to stop “sleepwalking” through what he described as a dangerous environmental crisis. He assured Mr Sharif in a meeting that he would do his best to highlight the ordeal facing Pakistanis.

Planning Minister Ahsan Iqbal told a news conference Monday that Pakistani authorities and international aid agencies are assessing the flood damage that has affected 33 million people.

Meanwhile, the IRC, a prominent international aid group, on Monday warned of mounting economic losses, likely leading to food shortages and an increase in violence against women. In a statement, the group said the floods destroyed about 1.5 million hectares of arable farmland.

A motorcyclist makes his way through a flooded street after heavy rain in Karachi on Monday. AFP
A motorcyclist makes his way through a flooded street after heavy rain in Karachi on Monday. AFP

“The acute loss of farmland and agriculture is likely to be felt in the months and years ahead," said Shabnam Baloch, IRC’s director in Pakistan. "It is vital that the humanitarian response remains fully funded in order to give the people of Pakistan the best chance of rebuilding their lives.”

She said the IRC had already provided 29,000 women and girls in flooded areas with aid.

Deluges from the rising Indus river and Lake Manchar in the Sindh province were still posing threat to Dadu, a district in the south where rescuers using boats were evacuating villagers to safer places on Monday. Light rain is expected to fall on flood-hit areas this week, the Meteorological Department said.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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