Dear Friends from the Media, Thank you for accepting our invitation today. As you know, on Thursday I visited Kalapara Upazila of Patuakhali district. Seeing firsthand the devastation caused by Cyclone Sidr was shocking. Even after one month, the damage remains evident. The magnitude of the devastation is huge and the challenge of rebuilding the lives of the victims is formidable. I was moved by the people’s resilience and their determination to get back on their feet. I also want to complement the Government, both, for its pre-cyclone evacuation efforts, which helped contain the loss of life, and for moving swiftly to help the affected people cope with the aftermath. This is the Bangladesh we know and admire. I know many of you are also interested in knowing how the World Bank can assist Bangladesh in this hour of need. I will get to that issue after making two main points. My first point relates to the current economic challenges faced by the Bangladeshi economy. As we all know the Bangladesh economy has been burdened by three adverse shocks occurring in quick succession this year. First, is the unabated increase in international prices of oil, food and other commodities. Second, is the damage caused by the two natural shocks: the floods in July-September; and the destruction by Cyclone Sidr. • International price shocks alone are likely to have inflicted losses to the economy this year to the tune of $1.6 billion, which is equal to 2.3 percent of GDP. Moreover, in the absence of any domestic price adjustments, rising oil and fertilizer prices are putting an inordinate fiscal burden on the FY08 budget. The Caretaker Government is also paying close attention to that issue. • While firm estimates of damages caused by Sidr are not available yet, the preliminary numbers on damages suggest that the magnitude of loss suffered by the economy due to the two natural disasters is very large—floods causing over $1 billion and cyclone probably over $2 billion. The government alone cannot deal with a problem of such enormous magnitude. Both Bangladeshi citizens and the international community must work together to help the country get out of these economic difficulties. I appeal to everyone, most specifically to our development partners, to come forward and help the country in this hour of need. This is not the first time Bangladesh has been hit with such large adverse external shocks and time and again Bangladeshi people have impressed the world community with their capacity to recover, rebuild and move forward. This brings me to my second point that relates to the challenge of climate change. Bangladesh’s future is trapped between the melting Himalayas in the north and the encroaching Bay of Bengal to the south. Together with climate change, this makes Bangladesh extremely vulnerable to natural disasters. In a normal year between 25 to 35 percent of the country can be affected by flooding. As recent research has shown, climate change is projected to worsen the intensity and frequency of natural disasters. Of course that will adversely impact development and, as always, the poor will suffer the most. The climate change issue puts Bangladesh in a more difficult situation. The challenge now is natural disaster augmented by climate change. There is also some good news and the Agriculture Advisor Mr. Karim will tell you more about that. I know that the Government of Bangladesh had already put in place a Medium-Term Disaster Management Strategy in 2003. Building on this, the Chief Advisor has recently articulated an urgent long term vision to deal with the threat of climate change. As one example, it plans to nearly double coastal defenses and has asked for over $1 billion to support this work. In the past three days I have met with Chief Advisor Dr. Fakhruddin Ahmed, Finance and Planning Advisor Dr. Mirza Azizul Islam, senior Government officials, development partners and members of civil society. During all these meetings, I got the clear sense that the time has come for us to look at Bangladesh’s flood and cyclone vulnerability through the perspective of climate change. Climate variability and change are critical development issues for Bangladesh today and it is indeed heartening that the government, the civil society and the international community recognize the importance of this issue. The Bank is engaging the Government in a planning process that looks at coastal zone management, precisely the area that is most vulnerable in Bangladesh. This will include building climate resilience into infrastructure design, strengthening mangrove and tidal shelter belts. We need to integrate adaptation strategy into all policy making and new infrastructure decisions. The challenge includes planning for worst case scenarios when areas lose viability and people have to move and transition to new economic opportunities. In this context, dialogue with India to deal with climate change will be important. These two countries have 54 shared rivers calling for a shared vision of development. The recently concluded Bali conference has made it very clear to all that climate change is no longer just an environmental issue. It is an important element of a long-term strategy to eliminate poverty and hunger. Paying attention to climate change now makes not only good practical sense but also very good economic sense. Finally, let me tell you about the World Bank's response to the recent floods and cyclone Sidr. As you know, within a week of Cyclone Sidr we offered up to US$ 250 million assistance to cover immediate, medium-term and long-term needs. The first part of this assistance strategy is a quick-disbursing budget support operation. Our initial plan was to provide $75 million to this end. However, after my trip to the cyclone affected areas on Thursday and the subsequent discussions with the Ministry of Finance officials, I am convinced that we need to do a bit more to help the government's FY08 budget. Therefore, we are recommending a quick-disbursing amount to $100 million; these resources will be available to the government budget in January. I know this is a small gesture on our part, but one that will help in reducing the pressure on the FY08 budget of increased spending. Another element of our financial assistance strategy to support the post-cyclone recovery involves providing $50 million for livelihood restoration support that will be made available by April next year. We expect other development partners to join in this effort and the total amount is likely to be $100 million. Our remaining assistance, $125 million, is for supporting the long-term vision of disaster prevention and management articulated by the Chief Advisor recently. This would involve activities like building and repairing embankments as well as more shelters. We will work closely with the government and other development partners, and if needed, will scale up our financial resources to several hundred million dollars. As you may also know, the World Bank recently provided US$ 75 million in budget support following the devastating floods and is preparing additional support of US$122 million by reallocating funds from the current International Development Association commitment to Bangladesh. A few projects will also receive increased allocations to target flood-related needs. Let me close by saying that the World Bank is fully committed and stands ready to contribute in whichever way possible, to the government’s long-term disaster management and mitigation efforts. We will closely work with the government, development partners, NGOs and the local community on some suggested interventions that I have outlined to make a difference to the lives of Bangladeshi people. I will be happy to respond to any queries that you may have.
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