Landslide lake devastates China trade

GILGIT, PAKISTAN // A landslide dam in northern Pakistan that has cut off road access to China since January has bankrupted the local trading community and threatens to destroy the mountainous region’s economy should it collapse and unleash mass flooding.

The landslide happened on January 4, killing 19 people and severing an upstream part of the Hunza river, creating a large artificial lake, and left an estimated 25,000-30,000 stranded. A breach to the dam and subsequent flood would threaten another 13,000-18,000 people in up to 36 downstream communities in the Hunza-Nagar Valley, some 700km north of Islamabad, the federal capital.

Yousaf Raza Gilani, the prime minister, speaking at a camp for displaced villagers in Altit village on Friday, said the landslide lake is expected to overflow on Tuesday, as the water level is rising every day.

In a series of interviews, business community leaders, bankers, non-governmental organisation directors and local politicians said bilateral trade with China, worth up to 10 billion rupees (Dh434 million) per year, had been the engine of the Gilgit-Baltistan region’s economy.

The landslide blocked a key stretch of the 1,300km Karakorum Highway (KKH), reputed to be the world’s highest international motorway, while some 1,000 containers of goods were awaiting clearance by Chinese customs officials after the New Year’s Day public holiday.

Shahbaz Khan, chairman of the Gilgit-Baltistan Chamber of Commerce, said on Thursday the stranding of the Chinese import cargoes, particularly perishables such as fruit and vegetables, had caused many traders to default on loans taken from local banks.

He said the destruction of 22km of the KKH, as it is referred to locally, represented the second blow in as many years to the China trade.

Marauding Tehrik-i-Taliban Pakistan militants had looted and destroyed warehouses in Swat, the trade’s logistical hub, when they temporarily took control of the region of Khyber-Pukhtunkhwa province in March 2009.

“Even if the flood from the dam is not a huge one, it will take two or three years to rebuild the damaged stretches of the KKH,” said Mr Khan, who himself does business with China.

“The economic impact would be devastating.”

Desperate local traders, eager to mitigate losses, had hired rickety 15-metre-long wooden boats from the lake of Tarbela Dam, where the converged waters of the blocked Hunza, Gilgit and Indus rivers accumulate, some 700km downstream of the landslide dam and 65km north of Islamabad, the federal capital.

The boats had acted as an aquatic alternative to lorries on the 20-km lake that has formed behind the landslide dam, ferrying Chinese cosmetics, chilli peppers and sultanas, and local exports of bitumen and lead ore, to makeshift quaysides at the dam and the nearest surviving stretch of the KKH to the north at Husseini village.

The ferry service ceased on May 18, when authorities declared the landslide dam was too unstable to be safe.

Bank managers in Gilgit, the regional capital, speaking on Thursday, said traders in the Hunza-Nagar Valley, which links Pakistan to China, had defaulted on some 2bn rupees in trade finance loans as a direct consequence of the landslide blockage of the KKH.

They said traders affected by the landslide and the Swat Taliban were being “aggressively pursued” in the courts by public sector and commercial banks, which had received no advice to the contrary from the central bank or the federal government.

Mirza Hussain, a member of the Gilgit-Baltistan Legislative Assembly from Nagar, said traders among his constituents felt betrayed by the lack of support from the federal government.

“They are the only eligible taxpayers in the region, and the federal government’s only source of revenue, and this is the thanks they’ve got,” he said at the dam quayside this week.

The bankers acknowledged the region’s economy was in trouble because of the landslide, saying it had also caused farmers and hoteliers in Hunza-Nagar to default on hundreds of millions of rupees worth of loans, either because of loss of income or destruction of mortgaged properties.
They said they expected limited relief would be provided by the central bank to the traders after the landslide lake overflows.

Source: The  National


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