Bangladesh News

The government should set up a disaster response fund of $300 million for dealing with losses caused by natural disasters, says a post-cyclone Sidr damage assessment report by the donors.

The report titled “Damage, Loss and Needs Assessment for Disaster Recovery and Reconstruction” also suggested exploring possibilities of buying risk coverage from the international capital market, including the reinsurers, for catastrophic events.

Such risk financing can assure government of sufficient funds immediately after a disaster and boost its coping capacity as well as offer hazard-contingent budget support, it added.

“For Bangladesh, the coverage should include weather-related events [floods and cyclone] and the premium could be financed through the World Bank soft credit,” the report said.

The damage assessment report on cyclone Sidr was sent to 30 government ministries and departments recently for opinions.

A team comprising representatives of 13 donor countries prepared the report, which also discussed about other natural calamities like floods and earthquakes and actions to be taken in such cases.

The proposed disaster response fund would provide the government with capital for early recovery programmes, obviating the need to tap into the operation and maintenance budgets.

“The estimated level of disaster response fund should be around $300 million, based on the immediate recovery needs of the 2007 floods and cyclone,” it said.

The donors also suggested creating a ‘Climate Change Multi-Donor Trust Fund’ of $80 million as international awareness on climate change has led to a considerable increase in interest in supporting Bangladesh, given the numbers of people likely to be affected.

Considering Bangladesh’s disaster risk profile, the report recommended the government a five-point risk reduction framework, which included strengthening and enhancing emergency preparedness, and institutional and community capacity building.

A 15-year long plan of action would be required to achieve a good disaster risk reduction and management mechanism, the donors said.

Given the potential for long-term climate change related with the changes to existing climate variability, it is crucial to update the risk assessments for various regions and zones of the country and prepare detailed hazard maps for each district, upazila and union, the report noted.

While there is sufficient knowledge of flood management for identifying risks and generate hazard maps for each union or village in the country, more work is needed for assessing earthquake risks, it said.

The report estimated that the total damage and losses in cyclone Sidr was Tk 115.56 billion, of which, Tk 21.68 billion was in public sector while the rest in private sector.

A total of $5.37 billion is required for rehabilitation and future protection programmes in the districts affected by cyclone Sidr, the report said.

Of this, $300 million will be spent for the immediate recovery plans, while for medium to long-term recovery and reconstruction programmes, another $1.07 billion is required, the report calculated.

Besides, $4 billion is needed for the investment in the long-term disaster risk management programme, it said.

About the macroeconomic impact of cyclone Sidr, the report said that the estimated loss in the current fiscal year (FY08) from the cyclone amounts to Tk 25.76 billion at current market prices, which is approximately 0.5 percent of the national GDP.

The cyclone would increase the country’s import bill and may also hurt exports in specific sectors, the report observed adding that some 0.5 million tonnes rice will need to be imported in the aftermath of the cyclone at an estimated cost of Tk 13.8 billion.

Referring to the government estimation, the report indicated that while Tk 35.3 billion is required for relief and recovery in the current fiscal year, the FY08 budget would be able to provide only Tk 9.5 billion.

In addition, the projected budget deficit will increase to 5.4 percent of the GDP while it was calculated 4.5 percent at the beginning of the fiscal year, the report said.

The report suggested the government start constructing at least 2,000 additional shelters in the high-risk zones and upgrading some 1,000 existing shelters.

Given the capacity for implementation and possible financial outlays, it would be reasonable to build about 100 new shelters and upgrade 200 shelters annually over the next five years, the donors observed.

The report also underscored the need for disaster shelters in frequently flood-hit areas and shelters for earthquakes and other natural calamities. These should be multipurpose buildings with water supply, sanitation facilities and storage for food and other supplies needed for survival after a disaster.

The government should follow a systematic approach for upgrading the coastal embankments to ensure protection against future storm surges, the report said adding that damages and losses were much lower and lives were saved where effective embankments were present.

The report estimated that the coastal embankment improvement programme with forestation would cost around $1 billion. The first phase should start with investment of about $300 million over the next five years, giving priority to the areas with high population density and economic activity, it added.