Better social safety net needed to offset price hike: WB MD

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Visiting World Bank (WB) Managing Director Ngozi Okonjo-Iweala yesterday said Bangladesh should adapt to a long-term reality of high food and oil prices by setting up better safety nets, which the lending agency is helping to design.

She said the global price hikes of food and energy, which are hitting the poor hardest, are unlikely to recede anytime soon while driving up the bills for fuel and fertilizer subsidies.

“The challenge is to adjust to the reality of higher prices by securing the basis for a strong macroeconomic performance while protecting efficiently the most vulnerable,” said Ngozi, rounding up a four-day trip at a news briefing.

She also suggested that Bangladeshis could switch to potato as their staple food as the recent ‘bumper yield of potato’ could substitute for the current staple rice, for those who would no longer be able to afford rice in case of a greater shortage.

During her trip, she met the energy, finance and communications advisers, and the business community, and made 5 visits to different projects and cyclone-hit areas.

The WB MD however stressed, “I saw no evidence of a famine here, but there is an issue about the availability of food.”

She also said Bangladesh should import more food in the short run, for which she and WB Vice-president Praful C Patel will urge India to understand Bangladesh’s rice shortage, in a bid to help resolve the stalled import of 5,00,000 tons of rice.

“We will do our bit, but I cannot make any promise. That is why I won’t go into specifics. I just hope our voice is heard,” she said.

But, she also added, the countries that are putting caps or bans on food exports, ‘are allowing the food crisis in the world market to worsen’. India has put a global ban on rice export.

Patel, also present at the briefing, said WB is also helping the government design a better safety net for the poor, who are the hardest hit.

Asked whether a democratic government would be better equipped to handle the food crisis, Ngozi said it would not matter which form of government was in place.

Ngozi however stressed that reforms must continue, especially structural reforms to open up the economy, and to create a climate more conducive to investment, with a level playing field.

She identified energy sectors, the agriculture sector, social sectors, and environmental management, as requiring reforms.

“Bangladesh can recover from the food and oil price shocks and the natural disasters of last year by supporting farmers and creating an investment friendly climate,” she said.

Ngozi also said Bangladesh must have a long-term plan to adapt itself to climate change, so it may protect its crops and its infrastructure from greater intensification of the effects of global warming.

WB is also helping the government recover stolen assets from home and abroad through programmes like training the officials of its central bank’s financial intelligence unit.

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