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The government yesterday asked the donors for $150 million additional budgetary support and food aid to tackle the post-flood situation.
High officials of the finance ministry at a meeting with the Local Consultative Group (LCG) comprised of representatives from multilateral and bilateral donors sought the financial assistance to cope with the emergency caused by the devastating floods that have blighted millions of lives across the country.
Finance Secretary Dr Mohammad Tareq briefed the development partners on budgetary allocations for different sectors and the potential impact of floods on implementation of the budget for current fiscal year.
He told the meeting that the government would divert resources from the low priority projects in the Annual Development Programme (ADP) to medium- and long-term rehabilitation requirements.
When the donors asked if the government would make any formal plea to the world community for help to face the floods, the officials replied in the negative, said sources.
"We have sought additional budgetary supports from the donors as it would be quite difficult for us to implement the current budget due to the floods," a finance ministry official said.
He said the government has also asked for food aid as there is a scarcity of food grains in the international market while prices of essential food items are spiralling upwards due to disruption of supply chains.
"Suppliers did not respond to repeated tenders for procuring rice from the international market," Economic Relations Division (ERD) Secretary Aminul Islam Bhuiyan told the reporters, explaining the rationale for seeking food aid.
At the meeting, representatives of the World Bank and Asian Development Bank (ADB) pledged additional support for Bangladesh, considering the fallout of flooding.
"The World Bank has already had a plan to provide $300 million and ADB $150 million in budgetary supports by December. During the meeting, they pledged to provide funds in addition to those," said a source.
World Bank country director Xian Zhu told reporters, "We have agreed to help Bangladesh with additional aid. But size of the assistance hasn't been determined yet."
"We are also assessing the flood damage on our own," he said, adding that the amount of additional assistance would be announced after integrating the flood damage data.
Sources said the government would submit the flood assessment report by the end of this month, given that in the meantime no fresh flooding occurs.
The finance secretary said the initial assessment suggests that the extent of damage is around 50 percent of that caused by the floods in 2004. "The worst affected are agriculture, communications, education, and health sectors," he said.
He told the donors that the government is planning to reallocate Tk 2,100 crore to meet immediate relief requirements and another Tk 2,100 crore for post-flood rehabilitation.
Dr Tareq also said that budgetary allocations amounting to 0.8 percent of the GDP will be shifted to flood rehabilitation.
He, however, identified some possible impact on the economy due to the diversion of funds. "Budget deficit will increase to keep momentum of the planned activities. It means more bank borrowing, fuelling already high inflation further, slowing down growth further due to reduced private sector investment, and downsizing of ADP that may affect development activities," he added.
The food and disaster management ministry officials apprised the donors of the damage wrought by the current floods. According to the ministry report, the floods have affected 1.05 crore people in 39 districts with the death count standing at 554 as of August 18.
Standing crops on 7.55 lakh acres were totally destroyed while crops on another 7.62 lakh acres were partly damaged. Over 2,800 kms of highways, motorways and roads were badly damaged while 72 bridges and culverts washed away.
As per the ministry report, the government and NGOs so far have received $6.20 million relief aid from different external sources like the DFID, UNDP, USAID, CIDA, WFP, OPEC and the AUSAID. Saudi Arabia alone gave $56.20 million as emergency aid.