$150m extra aid sought as budgetary support to recoup flood losses

FE Team | Published: August 20, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The government has sought an additional aid worth US$150 million as budgetary support from donor agencies and countries to help achieve the projected growth and maintain macroeconomic stability, following a major shock that the economy has received from the current floods.
It has already diverted budgetary allocation equivalent to 0.8 per cent of the gross domestic product (GDP) to recoup the losses caused by the floods, acting finance secretary Dr Mohammad Tareque said Sunday at a meeting with Local Consultative Group (LCG) of international donors.
Tareque gave a presentation on the impact of the floods on the economy and the country's requirement for additional fund to tide over the losses caused by the flood.
The meeting was held at the NEC conference room.
Without this foreign assistance, the finance secretary said, the government will have to depend on excessive borrowing, which will fuel inflation, slow down private sector investment and its growth and affect implementation of annual development programme (ADP) and poverty reduction activities.
Organised by Economic Relations Division (ERD) and co-chaired by ERD secretary Aminul Islam Bhuiyan and World Bank (WB) country director Xian Zhu, the meeting focused on flood damage assessment and framing a roadmap to overcome the shock.
According to the presentation, initial assessment suggested that the extent of losses caused by the current flood is around 50 per cent of the damage wrought by the flood of 2004. The worst affected areas include agriculture, communications, education, health, rural infrastructure and embankments, he added.
The actual losses are yet to be estimated in terms of money, ERD secretary Aminul Islam Bhuiyan told newsmen after the meeting.
At the meeting, the government sought food assistance in the form of rice and wheat on the basis of the need for the enhanced food safety net programme for an extended period due to the flood, he added.
"We'll hold follow up meetings to apprise donors of the actual requirements," ERD secretary said.
At the follow up meetings, Bhuiyan said, all ministries concerned will submit assessments of losses and damage, and specific requirement for fund to recoup the losses.
"The donors were very appreciative. We hope they'll extend all-out support to the government to recover the flood losses," Bhuiyan told newsmen.
The ERD secretary said the donors were also informed that the government needed food assistance as food procurement has become difficult domestically. The government received poor response to the tenders it floated to purchase food, he added.
The government has already sought food assistance from the World Food Programme (WFP), he said.
"We have also sought food aid from the donor agencies and countries, and they have assured us of a response accordingly," Bhuiyan
Addressing the press briefing, WB country director Xian Zhu said the World Bank will come up with specific commitment for assistance when the government will complete its assessment of damage, losses and the needs.
During his presentation, finance secretary Tareque informed the meeting that the government had reallocated Tk 21 billion worth of food safety net budget and a similar amount of maintenance budget to meet the immediate relief requirements and immediate post-flood rehabilitation priorities.
He said resources will be channeled from less priority ADP projects to meet medium and long term rehabilitation requirements.
The finance secretary said the floods disrupted the supply chain that has pushed the prices of essential food items up while the damage might call for a downward revision of the growth forecast.