Dr. Atiur Rahman
Governor, Bangladesh Bank :
Bangladesh is most vulnerable to natural disasters due to the frequency of extreme climate events and its high population density.
Climate change is no longer only an environmental issue; it is now a development issue as well.
Bangladesh is seeking to transform into an upper middle-income country through enhanced and sustainable agricultural production, accelerated industrialization and increasing integration into the global economy addressing critical energy supply and infrastructure gaps.
In vision 2021, the demands of Bangladesh’s export partners for socially and environmentally-responsible production continue to grow; this suggests that success in attracting much-needed foreign investment will also be linked to rising expectations of sustainable industry.
Around the world, it is increasingly being recognised that the full potential of the financial system needs to be harnessed to deliver the transition to sustainable development.
Policies, regulations and norms must shape more stable and efficient financial systems that are also connected to the mainstream economy and the social and environmental challenges it faces.
BB has been playing a leadership role in pursuing sustainability priorities, including poverty alleviation and environmental stability within its mandate of maintaining monetary and currency stability in order to foster growth and development in the national interest.
As part of ongoing financial sector reform there is a concerted effort not just to deepen the financial system and make it more efficient and inclusive, but also to make it greener.
As part of its developmental role, BB is promoting and facilitating environmentally sustainable, inclusive ‘green’ financing.
BB has been developing new policies and integrating green criteria into its existing operations. There are three key policies: green refinancing, green banking guidelines, and a credit quota for green output options.
Over the past few years Bangladesh has been slowly been able to turn around its reputation in the context of climate change from being one of the most vulnerable countries to becoming one of the most adaptive countries.
Billions are invested in adaptation measures such as flood management schemes, coastal embankments, cyclone shelters and others. However, the journey is far from being over.
Macro Stability of Bangladesh Economy
Experience in the Bangladesh context brings out with ample clarity of inclusive, green financing potentials as a potent employment-centric sustainable development tool.
Adequate financing for farm, off-farm MSME output initiatives are bolstering employment and income generation.
The financial sector’s MSME and green financing engagements are strengthening its stability and resilience, diversifying both asset and liability bases.
The domestic economy added about 1.3 million jobs per year, on average.
BB refinance support against SME lending is conditional on a significant part of it (15%) going to women entrepreneurs.
Mandatory engagements of all banks in the agriculture financing with incremental targets have helped the sector sustain 3%+ annual average growth for several years now.
Massive countrywide modernization of financial system IT infrastructure enabling advent of online/mobile phone/smart card based financial services.
Green financing initiatives have spawned millions of jobs in manufacturing, distribution and maintenance services in related technologies, like Solar PV power units, Energy efficient CFL, LED lighting, Energy efficient brick kilns, effluent treatment plants, and so forth.
Summary of the paper titled ‘Routine Disasters: Floods, Human Capital and Adaptation in Bangladesh’
This paper presents results of the effects of flood on physical development outcomes in Bangladesh.
The method consist the creation and use of an exogenous measure of flood exposure derived from remote sensing and its combination with pre-collected survey data. This allows us to identify an effect of early life exposure to flooding.
Bangladesh is a disaster prone country. But only the low frequency highly catastrophic ones only attract attention while the county is always exposed to regular small calamities.
These “small disasters”, with more common levels of exposure, are suspected to be responsible for large costs once the full impacts are quantized (UNISDR,2013) and could be responsible for longer-term impacts, which may affect the development possibilities of Bangladesh.
This leads to two key questions:
1. Are there prolonged negative outcomes resulting from flooding or similar disasters and environmental conditions? This dynamic has been observed for rainfall (Maccini and Yang, 2009).
2. What indirect impacts (e.g., market access interruption or health effects) may increase the total costs of floods beyond the direct damages? Previous research suggests that the indirect effects may be substantial in comparison to directly measured damages (Anttila-Hughes and Hsiang, 2012).
This paper develops a method to measure flood over the entirety of Bangladesh from 2000-2013 using data from NASA satellites and the observation was taken once in every 16 days.
Key Findings:
Negative effects are found on physical development of infants, with the effect being larger in boys than girls, and also find evidence of adaptation to this natural hazard.
These results on physical development are interesting because lower height-for-age ratios and stunting are associated with negative educational and labor market incomes in later life. This could represent a significant extra cost associated with environmental impacts in Bangladesh and other flood-prone developing countries.
Summary of the Project titled ‘Natural Calamities and Innovative Social Safety Programs’
This presentation is based on an ongoing project concentrating on evaluating the effectiveness of mobile cash transfers to vulnerable populations in Bangladesh.
The target population consists of poor households dwelling in the Northern Bangladesh who recurrently face severe natural calamities.
The objective of the study is to assess the supply of and demand for mobile money particularly through bKash, and to understand the usage and impact of electronic cash transfers on receivers’ consumption pattern and difficulties, if any in cashing the payment as well as on their bargaining power within the household.
The study also looks for the scope of developing an ad-hoc feature for mobile cash transfers, its challenges and whether a prototype could be made available.
The researchers have interviewed key NGOs, BRAC Microfinance and bKash to finalize the data collection methods for the titled project. Additional to the study objective, they are looking for implanting a game to measure any differences in the household bargaining process.
