Some Distinguished Features of GBM Bangladesh Delta: An Analysis Using the Input-Output Table

The article sheds light on the socio-economic and biophysical contexts of GBM Bangladesh delta. At the end, it comes up with some relevant policy measures based on the analysis.

You can find the full article at Thinking Aloud, 1 December 2018.



Political Economy of Special Economic Zones: China vs India — SANEM CoRE

Towhid Iqram Mahmood According to the World Bank in 2008, a modern day Special Economic Zone (SEZ) typically includes a “geographically limited area, usually physically secured (fenced-in); single management/administration; eligibility for benefits based upon physical location within the zone; separate customs area (duty-free benefits) and streamlined procedures”. For that, practices related to business and trade differ from […]

via Political Economy of Special Economic Zones: China vs India — SANEM CoRE

Climate Change Threat to the Bangladesh Economy

Bangladesh, as an economy, has performed remarkably well in the recent decade regardless of socio-political obstacles. It has maintained an average economic growth of 6% per annum and performed well in reducing the poverty rate to 24.3% and extreme poverty rate to 12.9%. Bangladesh desires to reach upper middle-income status and eliminate extreme poverty by the fiscal year 2031. Although the stable growth rate and positive outlook of the future make us optimistic about the targets Bangladesh is aiming at, climate change challenges may impede such growth aspiration.

Ganges-Brahmaputra-Meghna (GBM) Bangladesh delta is one of the largest deltas in the world and is highly vulnerable to natural disasters because of its geographical position, population density, illiteracy and lack of institutional setup. Evidence suggests that the regular occurrence of natural disasters such as flood, cyclones, salinity intrusion, rise in sea level, river bank erosion, rising temperatures, high humidity, etc. has been a real threat to the overall economic development scenario of Bangladesh. Due to the deltaic formation of the country, natural disasters and climate change, Bangladesh has been ranked as the 6th most suffered country from extreme weather events for the period 1997-2016. During this period, Bangladesh lost 0.68% of GDP annually and experienced an average 0.44 deaths per 100,000 inhabitants each year (Global Climate Risk Index, 2018). Climate change and global warming data of NASA depicts that the sea level rises by 3.4 millimetres per year with the increasing global temperature of 1.7°F each year. Such climatic changes will make it further difficult for Bangladesh by damaging food security, hurting the economy’s growth and harming the poverty reduction effort unless they are managed comprehensively.

The climate factors affect several sectors and lead to economy wide substantial losses. Agriculture is the most vulnerable sector. In the future, climate change, especially, high temperature, humidity and radiation could reduce yields of high-yielding varieties of rice at a significant level. The increase in soil salinity will also contribute to the contraction of agricultural production. Agriculture will also suffer because of the frequent flooding caused by climate change. The forestry and ecosystems of the country will also be affected. The sea level rise (SLR), higher temperatures, an increase in cyclone intensity will damage the forest resources and the diverse ecosystem. Additionally, the SLR will result in permanent inundation of a significant part of dryland. The land quantity shock will lead to the fall in production in all sectors and ultimately, would lead to a fall in real GDP. The climate change could affect the economy of Bangladesh adversely by incurring an average loss of 2% of GDP per annum by 2050 and it may increase to 9.4% by 2100 (ADB, 2014). The majority of the working age population from the South West region of Bangladesh earns their livelihood by working in the agriculture, forestry and fishing sectors. Therefore, the overall unemployment rate may increase due to the reduction of agricultural production. There is a positive correlation between the intensity of natural disasters and poverty rate. Hence, climate change will play a role in deteriorating the poverty status, especially, of the disaster-prone areas since majority of the coastal districts that are most exposed to natural disasters show poverty rates that are higher than the national average.

Adapting climate actions such as developing the resilience capacity of communities, building emergency cyclone shelters, enhancing the capacity of government agencies to respond to emergencies, intensifying river embankments and coastal polders, reducing saline water intrusion in agriculture-dependent areas, executing the early warning and emergency management systems, etc. could be a possible way to avoid the worst impacts of climate change on the macroeconomic indicators. The diversity and universality of the problem will make the task trickier in future. The successful implementation of well-coordinated long-term adaptation and mitigation policy measures will be the key in the way of ensuring the sustainability of agriculture, food security and livelihoods. Moreover, the amount of financial and technical support received by Bangladesh will determine how well Bangladesh deals with climate impacts and their subsequent effects. Therefore, the incremental financial support from private sector and innovative alternatives (i.e. carbon tax) for climate financing will be crucial to accommodate the total demand of financing the climate projects.

This article was first published in Thinking Aloud, 1 September 2018 

Long Stay of Rohingyas: Discomfort about Sustainable Development

Bangladesh has shown the valor by giving shelter to a large number of persecuted Rohingya people. Bangladesh is one of the most densely populated countries in the world with limited resources. Hence, it has its own struggles and challenges to overcome. This large number of refugees, who apparently are stateless, may need to stay in Bangladesh for a period longer than we can guess right now. Of course, we have to show diplomatic shrewdness and ask the international community to put pressure on Myanmar so that they take the Rohingyas back to their country. Besides, it is important to realize that this additional population may impede the process of sustainable development if Bangladesh does not work on a concrete plan to handle the upcoming social, economic and environmental challenges.

In today’s world, we talk about the sustainable development and Bangladesh is not an isolated land. The effort from Bangladesh to ensure growth with sustainability is evident. As a part of that exertion, South Asian Network on Economic Modeling (SANEM) has recently done a research work for General Economics Division, Planning Commission of Bangladesh in order to estimate the additional cost for achieving the Sustainable Development Goals (SDGs) for Bangladesh and assess the potential financing sources. The study shows that the total additional cost for implementing SDGs in Bangladesh will be 928.48 billion USD for the rest of the SDG period (FY2017-FY2030). The study also unveils that more than 85% of this additional cost will be financed by domestic resources. Thus, emphasizing on building own financing capacity is going to be one of the pre-requisites for attaining SDGs. High GDP growth and redistribution of existing domestic resources are going to be key here. It is a huge task. Now, the addition of Rohingyas may make the job huger.

Only feeding Rohingyas thrice a day is not going to be enough. The other things will come if they stay for a longer period. We can definitely argue that the foreign aid will come for the Rohingyas. But will the volume of aid be enough to help them? Will they come for the endless period? At the end of the day, we may need to help them with our own resources. Therefore, we may need to re-redistribute the domestic resources.

We will need to give Rohingyas health services. As a result, we will see a reallocation of our existing medical resources. They will compete with our labor force for employment (mostly in informal sectors). The increase in labor supply will lower the wage level and consequently, reduce the income level of the poorest section of the society. This will boost the inequality level. Moreover, we may need to appoint our own resources to educate their children in the future.

The government has an ambitious target of achieving 9% GDP growth by the FY2030. The main driver of this high level of economic growth will be the investment by the private sector but the lack of security in Cox’s Bazar and Teknaf may help to lose the volume of private investment in that area and contribute to the reduction of total private investment.

Moreover, the environment is going to be affected adversely by the surge of Rohingyas if appropriate measures are not adopted by the authority. The impact is already visible in Teknaf and Ukhiya. A total of 2,000 acres of forestland have been allocated to accommodate the incoming refugees and the immediate result is deforestation. If this continues, it may contribute to undesirable climate change (i.e. increase in CO2, raise in sea level, etc.) and make our task of achieving SDG13 difficult. It has economic effect as well. The degradation of the environment may contribute to loss of agricultural production in that area.

Furthermore, the possibility of decline in law and order is another concern. The crime like drug smuggling, hijacking, etc. can increase and overall law system can worsen. This kind of deterioration has both social impact and economic impact. We will observe the depletion of social values. The young people from that region will get directly involved with the unlawful activities and many will be drug addicted. Moreover, the downfall of law situation will attract a lower number of tourists and result in a decrease of contribution by tourism sector to GDP.

A small economy like Bangladesh does not have the capacity to absorb all the effects caused by the influx of Rohingyas completely. In the long run, we will have to give them medical services, house to live, land to cultivate or job for a living, education, etc. Nevertheless, we can use the right tools and minimize or eliminate the negative impacts. We have to shift this huge additional population to a safe place as soon as possible so that we can avoid issues such as deforestation, degeneration of environment, etc. Besides, it will be important to keep a record of Rohingyas coming to Bangladesh and maintain proper tracking of their movement in order to avoid any kind of unpleasant event or anarchy.