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Download PDF The country needs $2.2 billion for rehabilitation projects and budgetary support and the government expects a one percentage point drop in expected GDP growth while one percentage point jump in inflation in FY08 due to Cyclone Sidr.
The government told this yesterday to the Local Consultative Group (LCG), a platform of Bangladesh’s development partners, at a meeting held in the NEC auditorium in the capital.
The government also reiterated its case for food assistance when four secretaries of the government met the donors to present their assessment on the budgetary effects of floods and cyclone, economic damage to infrastructure and the expected cost of recovery, and the food situation in the country.
“We need immediate assistance to get back to pre-Sidr situation and the money required will be provided from both budget and assistance received from our development partners,” said Aminul Islam Bhuiyan, Economic Relations Division (ERD) secretary, while speaking with reporters following the meeting.
He said the earlier figure of $1 billion assistance sought by the chief adviser was used as a yardstick for the massive funds required for long-term rehabilitation programmes such as building cyclone shelters, embankments, roads, and educational institutions.
World Bank country director Xian Zhu, who led the donor delegation, told reporters that donors stand ready to help the government, but the effort must be coordinated through a joint mission comprising the government and the donors.
He put emphasis on doing joint assessments with the government holding further discussions to hammer out the details of the massive project.
Zhu said donors can help Bangladesh get both financial and technical assistance at the ongoing Bali climate change conference as the country has been identified as one of the most vulnerable countries to be affected by climate change.
Out of the required $2.2 billion assistance, $1,809 million is required for both immediate and long-term relief and rehabilitation programmes in the cyclone-hit area, said the planning ministry. It estimated $457 million for immediate rehabilitation and $1351.09 million for long-term rehabilitation projects.
Another $400 million is needed for budget support, according to the finance ministry.
According to sources, the Ministry of Local Government, Rural Development and Co-operatives has sought $460.82 million while the Ministry of Communications $447.38 million.
Among other ministries, water resources ministry has requested $294.30 million, primary and mass education ministry $106.27 million, environment and forest $163.03, health and family welfare $10.32 million, food and disaster management $25.71 million, and home ministry has asked for $7.29 million.
Ministry of Shipping has sought $3.42 million, energy and mineral resources ministry $16.92 million and fisheries and livestock ministry sought $24.29 million for rehabilitation programmes.
Due to the devastation caused by Cyclone Sidr, the expected Gross Domestic Product (GDP) in the current fiscal would be 6 percent — lower than the previous estimate of 7 percent, said the finance ministry estimates
The agriculture and forest sectors will experience a 0.9 percentage point drop in growth figures, bringing their growth estimates for the current fiscal down to 2.3 percent from 3.4.
Growth in the industries sector is expected to fall by a massive 3.2 percentage points from 11.3 to 8.1 percent, while fisheries growth may also drop by one percentage point.
The government also pushed up its expected inflation target from 6.5 to 7.5 percent.
The budget deficit that was projected at 5.89 percent of the GDP is now expected to be 6.82 percent. The Annual Development Plan will also need to be cut by Tk 26,500 crore to Tk 24,000 crore.
Subsidies to flood and cyclone-affected people, and farmers will cost an additional Tk 5,400 crore if oil, fertiliser and food prices are not adjusted to international prices.
The food and disaster management ministry reiterated the government’s request for food assistance given the huge food shortage expected from the floods and cyclone damage.
Dr Mohammad Tareque, finance secretary, Jafar Ahmed Chowdhury, planning secretary, and Ayub Miah, food and disaster management secretary, made presentations at the meeting.
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