August 13, 2010 / 11:56 AM / 7 years ago

UPDATE 2-World Bank chief says $1 bln of Pakistan crops lost

* World Bank says damages more than in 2005 earthquake

* Estimates $1 billion in crop losses

* Considering redirecting $900 million in aid (Adds details on aid, economy, byline)

By Aija Braslina

SIGULDA, Latvia, Aug 13 (Reuters) - World Bank President Robert Zoellick said on Friday floods in Pakistan may have destroyed crops worth around $1 billion and that the organisation was considering redirecting aid to the country.

Triggered by torrential monsoon downpours, the floods have swamped Pakistan’s Indus river basin, killing more than 1,600 people, forcing two million from their homes and disrupting the lives of about 14 million people.

“An early assessment is that the damages are more than in the earthquake in 2005,” he told a news conference during a visit to Latvia. “The rough estimate is that there is a billion dollars of losses of crops. All of us will have to pitch in to help.”

Aid agencies said on Friday that water-borne disease outbreaks posed new risks to victims, with around 36,000 suspected cases of potentially fatal acute watery diarrhoea reported so far. For more, see: [nSGE67C05H]

Zoellick said a reconstruction needs assessment team landed in Pakistan on Friday with representatives from the World Bank and the Asian Development Bank. The teams will spend the next couple of months working with the government compiling the assessment, which will help determine how much aid is needed to rebuild.

“We hope over the course of the next couple of months by October if flood conditions recede to be able to help make an overall reconstruction assessment working with the Pakistani government,” Zoellick said.

He said the World Bank was also considering redirecting aid.

“We’ve already started to think about reprogramming some of our funding, and based on the government request we are looking to see if we might reprogramme about $900 million,” Zoellick said after meeting Prime Minister Valdis Dombrovskis.

Wheat, cotton and sugar crops have all suffered damage in a country where agriculture is a mainstay of the economy.

In July the World Bank approved a $6.2 billion lending program for Pakistan to cover the next four years through 2013.

The International Monetary Fund has warned of major economic harm and Pakistan’s finance ministry said the country would miss this year’s 4.5 percent gross domestic product growth target, although it was not clear by how much.

The government had projected a budget deficit in 2010/2011 of 4 percent of GDP but some analysts believe it could now be at least 6 percent of GDP.

Karachi-based JS Global Capital analysts estimated in a note to clients this week, after talks with key Pakistani corporations, that economic growth would likely be somewhere between 3.5 to 4.0 percent, with agricultural losses mitigated by rebuilding efforts.

JS Global estimated the government would spend about 150 billion rupee PKR= on rebuilding from the floods, raising the fiscal deficit to 6 percent of GDP.

The United Nations has appealed for $459 million in emergency aid and said long-term rehabilitation of the agricultural sector would cost billions of dollars. [ID:nSGE67B05O] (Additional reporting by Lesley Wroughton in Washington. Editing by Mark Heinrich and Dan Grebler)

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