Overcoming the Livelihood Crisis in Flood-Affected Areas

Perhaps one of the most formidable challenges facing the state and society in Pakistan today is the reconstruction and rehabilitation after the damage caused by the recent floods. While there are a number of areas that will require careful planning, this note will focus on the creation of livelihoods for poor, unskilled workers affected by floods as well as reconstruction of small scale infrastructure.

Currently, the donor-driven Damage and Needs Assessment (DNA) is in the process of identifying damage to large scale infrastructure. This includes roads, bridges, schools and Health Unit buildings, utility services, dykes, embankments and irrigation systems. However, in the process of assessing large-scale reconstruction, damage to smaller infrastructure may be off the radar.

Inter- and intra-village roads and pathways, smaller water courses, and other infrastructure at the village, deh and muazza level is part of the critical public infrastructure that has been destroyed in the floods. Since these are public goods, private individuals or the market may not be interested in providing for them. Their importance, in terms of restoring the lives and livelihoods of the poorest, is self evident.


According to the ILO, the loss of livelihoods is in the range of 5.3 million income earners belonging to roughly 4 million households across the country. Now that the water has receded, it is important that source of livelihoods for the displaced are explored. A large number of those displaced are landless agricultural workers or tenants. It is highly unlikely that in a number of affected areas, the kharif crop will be planted, which will mean that demand for labour in the agricultural sector will remain depressed. It is dangerous to simply assume that mainstream reconstruction work will absorb a large number of these workers for two reasons. Mainstream construction work through the federal Public Sector Development Program (PDSP) or provincial Annual Development Programs tend to be based on specifications that are relatively capital intensive. As such, they will not generate the requisite employment. Second, the PSDP and ADP projects are not geared towards monitoring the labour input. Projects are subcontracted to a contractor in which ‘labour cost’ is one of the many cost items. The contractor in turn further subcontracts to a labour contractor to hire and remunerate workers. The government for its part pays the contractor a lump sum amount on the ‘labour cost’ item. The government does not control the number of people employed, nor can wages can be monitored. There will be no compulsion on contractors to hire IDPs for this work either.

A Cash-for-Work program can potentially address issues of small infrastructure reconstruction along with provision of livelihoods. If based on the model of employment programs successfully operated by other developing countries – India, Argentina and South Africa for instance – the program can be an important component of the reconstruction and rehabilitation strategy. If the initial uptake of the program is estimated to be approximately 1 million people employed for 100 days at the prevailing minimum wage of Rs. 7000 per month, then the ILO has estimated the total cost of the program at Rs. 35.8 Billion. The reason for initially limiting the uptake to 1 million individuals is based on budgetary constraints as well as keeping in view that a large number of people will initially remain occupied in rebuilding their homes, working in large scale reconstruction work and some will be absorbed in the urban economy and/or their previous forms of employment.

There is skepticism about the program, both at the federal and provincial levels, based on the design of the scheme. This skepticism is borne out of the possibility of managing the scheme at the local level and the identification of beneficiaries. Identification of beneficiaries is the easier part as they can be linked to the issuance of Watan cards. Management of material supplies, drawing up the list of works to be undertaken and monitoring their completion is the trickier part. The management of such schemes in other countries is done by local governments. Although the elected part of the local government in Pakistan does not exist right now, its bureaucratic arm does.

Oversight at the district or tehsil level, through a mix of elected representatives and local NGOs, can provide the requisite oversight of the program. Alternatively if there are NGOs that have been involved in livelihood provision – as the National Rural Support Program and the Sindh Rural Support Organization are – then the responsibility of local level management can be given to them through specific agreements between them and the provincial governments for a specific area.

The larger point is that the scheme should not be rejected on the basis of the lack of a watertight institutional design. The importance of livelihoods provision as well as constructing small infrastructure should not be undermined on the above pretexts. Throwing the baby out with the bath water is never a good idea.

Employment provision to the poorest, it must be added, is an official instrument of social protection of the Government of Pakistan. In the budget for 2010-11, Rs. 5 billion were allocated for the government to employ 200,000 people at minimum wage for 100 days. The proposal developed by the ILO is only a scaling up of the scheme given the floods contingency. Employment provision to the poorest is also a promise of the ruling Pakistan People’s Party in its manifesto; Prime Minister Yusuf Raza Gilani also mentioned it in his first address to Parliament. The floods have thrown into sharp focus the relationship of the state with its powerless citizens. The Cash-for-Work Scheme can be the precursor for creating a positive state-citizen relationship.

Dr. Asad Sayeed is an economist and Director at the Collective for Social Sciences Research, Karachi.