WB experts for providing cash to flood-hit people
Saturday, 11 August 2007
FE Report
Providing cash to people affected by the floods that have devastated parts of Bangladesh, India, and Nepal is one of the most effective ways to help rebuilding lives and stimulate local markets, World Bank (WB) South Asia experts said.
"Cash transfers have proven a very effective immediate relief mechanism in previous natural disasters such as the tsunami and the Bangladesh floods in 2004, and the 2005 earthquake in Pakistan," WB's chief economist for South Asia Shantayanan Devarajan said.
"Most people affected by the floods are poor and now they are losing their homes, livestock, and assets," said Devarajan.
"Cash transfers are a way of enabling these people to rebuild their lives. It also helps stimulate the markets which might have been depressed in the wake of a disaster," he added.
Former WB's Bangladesh chief Christine Wallich, who is WB's Senior Advisor for South Asia, said that it is also critical that relief assistance respond to the demands of local communities. "This usually entails drinking water, food, medications, and seeds to minimise the effects of a destroyed harvest. It is also essential to help households replace their lost livestock, which are very important for family nutrition (dairy) and for helping farmers in crop production," she added.
Despite the loss of lives and damage to vital infrastructure, Devarajan and Wallich said governments in South Asia are better prepared to handle such disasters today than a decade ago.
The two economists spoke in an online interview posted on the World Bank website.
"Countries like Bangladesh have faced floods in the past, some more serious than the current one," Devarajan said. "I am confident the government can respond to the situation given what they have learned."
Wallich said that involving NGOs in relief activities and disaster recovery "ensures quicker food assistance and other relief activities. Thanks to strong government efforts, the population at large is also much more educated about safe water, the location of shelters, and the like, and knows what to do when disaster strikes."
About how countries can prepare for future natural disasters, Devarajan said South Asia could benefit from a regional framework to manage such risks.
"The same floods are affecting three neighbouring countries," he said.
"An early warning system could help mitigate the impact. When a river is rising 200 miles upstream information should be transmitted downstream, which can then enable neighbouring countries to make cautionary adjustments and relocate people before the floods strike," he added.
The floods could have adverse economic impact on these fast growing countries, Devarajan said adding that the primary concern is the potential for food and other commodity prices to rise sharply. "The way to mitigate this economic impact is to increase trade," he said. "It is vital to bring in imported goods to replace commodities destroyed by the floods."
While the impact on gross domestic product (GDP) growth is likely to be small, a disaster of this scale could pose a risk to some export industries, such as Bangladesh's garment industry.
However, Wallich said road and embankment development has to date protected the corridor from Dhaka to the port, making it possible to continue manufacturing as well as exports.
Providing cash to people affected by the floods that have devastated parts of Bangladesh, India, and Nepal is one of the most effective ways to help rebuilding lives and stimulate local markets, World Bank (WB) South Asia experts said.
"Cash transfers have proven a very effective immediate relief mechanism in previous natural disasters such as the tsunami and the Bangladesh floods in 2004, and the 2005 earthquake in Pakistan," WB's chief economist for South Asia Shantayanan Devarajan said.
"Most people affected by the floods are poor and now they are losing their homes, livestock, and assets," said Devarajan.
"Cash transfers are a way of enabling these people to rebuild their lives. It also helps stimulate the markets which might have been depressed in the wake of a disaster," he added.
Former WB's Bangladesh chief Christine Wallich, who is WB's Senior Advisor for South Asia, said that it is also critical that relief assistance respond to the demands of local communities. "This usually entails drinking water, food, medications, and seeds to minimise the effects of a destroyed harvest. It is also essential to help households replace their lost livestock, which are very important for family nutrition (dairy) and for helping farmers in crop production," she added.
Despite the loss of lives and damage to vital infrastructure, Devarajan and Wallich said governments in South Asia are better prepared to handle such disasters today than a decade ago.
The two economists spoke in an online interview posted on the World Bank website.
"Countries like Bangladesh have faced floods in the past, some more serious than the current one," Devarajan said. "I am confident the government can respond to the situation given what they have learned."
Wallich said that involving NGOs in relief activities and disaster recovery "ensures quicker food assistance and other relief activities. Thanks to strong government efforts, the population at large is also much more educated about safe water, the location of shelters, and the like, and knows what to do when disaster strikes."
About how countries can prepare for future natural disasters, Devarajan said South Asia could benefit from a regional framework to manage such risks.
"The same floods are affecting three neighbouring countries," he said.
"An early warning system could help mitigate the impact. When a river is rising 200 miles upstream information should be transmitted downstream, which can then enable neighbouring countries to make cautionary adjustments and relocate people before the floods strike," he added.
The floods could have adverse economic impact on these fast growing countries, Devarajan said adding that the primary concern is the potential for food and other commodity prices to rise sharply. "The way to mitigate this economic impact is to increase trade," he said. "It is vital to bring in imported goods to replace commodities destroyed by the floods."
While the impact on gross domestic product (GDP) growth is likely to be small, a disaster of this scale could pose a risk to some export industries, such as Bangladesh's garment industry.
However, Wallich said road and embankment development has to date protected the corridor from Dhaka to the port, making it possible to continue manufacturing as well as exports.