Pakistan Among Most Vulnerable Countries to El Nino’s Impact, Threatening Food Insecurity
Pakistan has been identified as one of the most vulnerable countries to the impact of El Nino this year, according to a report by Standard Chartered Bank. The country is already grappling with the aftermath of last year’s devastating floods and erratic rainfall, which have compounded the challenges posed by record-high inflation and a severe financial crunch.
The situation is cause for alarm, as extreme weather events fueled by El Nino could further exacerbate food inflation and food insecurity. This comes at a time when the people of Pakistan are already struggling with rising prices of petroleum products, gas, and electricity.
Countries across the globe are currently battling heatwaves and floods triggered by El Nino, a naturally occurring climate phenomenon that has a 90 percent probability of persisting in the second half of 2023, according to the World Meteorological Organization. While the worldwide impact can be significant, emerging markets face higher stakes as they are more exposed to fluctuations in food and energy prices and often have limited fiscal buffers to cushion the blow.
Standard Chartered Bank’s index highlights India and Egypt as the most vulnerable economies to El Nino’s impact this year. The index takes into account factors such as the weight of the primary sector, the share of food in inflation baskets, and a country’s ability to offset the impact through fiscal support. In addition to Pakistan, countries like Ghana, Kenya, and the Philippines also rank high on the list. On the other hand, South Africa, Chile, Germany, and the United States are among the least vulnerable.
Agricultural sectors in Africa and South Asia, where agriculture plays a significant role in the economy and employment, are particularly susceptible to the fallout from El Nino. Sudden changes in rainfall or temperature can wreak havoc on crops, potentially leading to balance of payments strains in some economies. Asia is the primary producer of rice, and therefore countries like Pakistan, the Philippines, and Thailand are at risk due to the dry El Nino weather. However, Argentina, an exception, experienced record soy harvests during previous El Nino episodes.
Food prices make up a substantial portion of the consumer price index in emerging markets, with some low-income economies seeing food constituting as much as 40 percent. Therefore, the severity of El Nino directly impacts inflation rates. historical data suggests that a one-degree temperature increase during an El Nino event raises global food prices by over 6 percent after one year. Parts of Southern Africa, Central America and the Caribbean, and Asia already face high levels of food insecurity and are likely to see their situations worsen.
El Nino’s impact goes beyond agriculture. Changes in rainfall patterns or prolonged droughts can affect hydropower output, leading to increased gas and coal prices. Lower rainfall can hinder electricity generation, potentially resulting in power rationing. Countries heavily reliant on hydroelectricity, most notably in Africa, face significant challenges.
Latin American central banks, including those of Chile and Brazil, were some of the first to raise interest rates to combat rising prices. However, El Nino’s impact on agricultural production and electricity generation could complicate disinflation efforts, potentially leading to sustained higher interest rates.
In conclusion, Pakistan’s vulnerability to El Nino’s impact poses a serious threat to the country’s food security. With the agricultural sector already grappling with the aftermath of last year’s floods and erratic rainfall, extreme weather events could further compound the challenges faced by the Pakistani people. It is essential for policymakers to take proactive measures to mitigate the impact and ensure adequate support for the affected sectors and vulnerable populations.
