Natural calamities and Bangladesh growth potential
BANGLADESH is widely known as a flood or natural disaster prone country for many years. In recent times many European countries have also experienced floods. Once United States was free from natural calamities, but not now. US people are also afraid with possible revisit of hurricane Katrina. Why is the world facing such calamities? Environmental depletion and global warming are identified as the prime reasons for world wide natural disasters. United States did not take these factors into consideration until recently, though they are one of the accused for these causes. However, though delayed, people all over the world are now concerned about the environmental depletion and global warming. But the irony is that prime victims of these two disasters are nations which are not really responsible for the creation of these disasters.
Flood hit Bangladesh in the past and also may hit in the future. But, the nature and duration of flood are changing day by day. If heavy rainfall occurs in a year due to global warming, floodwater inundates Bangladesh. On the other hand, if there is no rain or less rain in other year, the irrigation is hampered and so is food production.
Cyclones happened in the past and it is also happening now. Whether the nature of cyclones has changed that is something scientists will be able to answer. But Bangladesh is only at the receiving end when it comes to man-made disasters. We, the people of the world, are polluting the sea, and the sea in return gives us Tsunami, we are drilling polar areas to explore minerals, and melted ice of those areas are increasing the water level of the sea, which may even cause our beloved country to sink in the sea in future.
Apart from natural calamities we are facing two other disasters in Bangladesh: (a) our agricultural land is reducing, almost 1 percent per annum. As a result, we would not be able to increase the production of food grains beyond the limits supported currently available by high yield varieties, (b) the high growth of population is hindering all our development plans. If we could control the population growth from the time of our independence, there would not be any people below poverty level at this point in time.
We have always heard that manpower is an asset. However, it is only true when the ratio of land and population is right. In recent days, birth control is again somehow neglected. If the NGOs who are spending hefty amount against HIV/Aids could spend a fraction of that for birth control measures, the benefits would have been greater.
Our economy has already suffered two floods in a row this year. Post-flood initiatives were taken in the form of distribution of new seeds to farmers, exemption of repayment of agri-loans and distribution of subsidised food. And now comes the cyclone. The consequences of cyclone are even more severe than the floods. We could not arrange adequate shelter for everybody. It is not also possible as we have so much of population in such a small country.
The amount of loss we have incurred due to such calamities is huge in monetary terms. However, we cannot measure the loss of lives in monetary terms. The government has requested for financial aid and has already received favorable response from both domestic and international arena. We are optimistic that the affected people would be able to recover the loss. The government has to conduct a survey to assess the actual amount of loss.
However, if the figures turn out to be even five lakh metric tons, that would be even a big sum for Bangladesh. Bangladesh could never attain self-sufficiency in agriculture. So far we have only been able to reduce the gap between the demand and supply of food grains. For the last two years, this gap has been widening further. As a result, we have to spend a huge portion of our foreign exchange reserves to import food grains.
Another problem is that earlier we could import food grains at lower costs but now we have to spend a lot to import rice and wheat, especially wheat price is highest now in 27 years. It is likely that the cost of sugar and edible oil would also increase as a result of these being used to produce bio-fuel. So the liberalisation of trade in agriculture sector would not help our country because Bangladesh will not be able to import at the subsidized or reduced rate.
This is time to tighten the belt of our economy. It is not possible for us to increase agricultural production drastically. We have lost that opportunity a long time back. We cannot produce more jute even if the price of jute increased to three times in the international market. The same reason applies for production of food grains. We can try to increase production by using better quality seeds and applying advance technology; however that would not meet our demand.
If we want to live decently, we have to do that as a part of the global community. We should not depend on the donors. It is good that today we can afford to import food grains from international market even at higher rates. If the country's GDP would grow at 8%, it would be even easier for us to meet the demands. Despite having enormous potential, we could not achieve the growth rate of 8% due to destructive nature of politics and failure of the policy makers.
We have ignored the necessary reforms for many years, rather we implemented unnecessary projects at higher costs without national economic benefits. Before making any investment decisions we need to evaluate the economic benefits of it. The country would not face shortage of power now if we could involve the private sector in production and distribution of power. Similarly we could have improved our road and other infrastructure by engaging the private sector.
A question that is hanging over the economy now is whether we will face inflation due to the recent cyclone. It is evident that as the production is hampered, the price of the commodity will be increased due to scarcity of supply. We can import the commodities at higher price, but this will again increase the price level. Besides, there are growing supply side constraints in the international markets. However, if our economy progresses well, the inflation will be tolerable to the consumers. So we need to concentrate on the overall growth of the economy. If we can achieve the expected level of growth, we can solve the shortage of production in other manner.
Bangladesh has demonstrated high degree of resilience to natural calamities over the years. We have always stood up on our own feet, but sometimes it takes time and that slows down our growth. In a competitive world, we can not afford to remain behind and hence we have to factor these calamities and restoration costs into our growth plan. We have to ensure clean water, health and good education for our future generation to survive in the future world of growing scarcity. The country has to project its GDP considering such spending for major reconstruction work since this will come back again and again and we have to face it realistically and united.