Showing posts with label floods. Show all posts
Showing posts with label floods. Show all posts

Wednesday, 28 August 2024

Bangladesh Floods: Natural Calamity or Manmade Disaster

The recent floods in Bangladesh have underscored the complex and often contentious nature of water management in South Asia. As the region faces increasing challenges from climate change and population growth, the need for cooperation and mutual respect between nations has never been more urgent. The disaster serves as a wake-up call, highlighting the critical importance of regional collaboration in managing shared resources and ensuring the well-being of all people in the region.

Bangladesh, frequently affected by natural calamities, is now enduring one of the worst floods in recent memory. While floods are common in this region, the current catastrophe is not solely attributable to nature’s wrath. Instead, it is being increasingly linked to the actions of neighboring India.

The recent and abrupt release of water from the Dumbur Dam in India’s Tripura State, located upstream of the Gumti River, has sparked unprecedented flooding in Bangladesh’s eastern border districts. This incident has intensified long-standing tensions between the two countries, with Bangladesh accusing India of negligence and poor management of their shared water resources.

The flood’s impact has been nothing short of catastrophic. More than three million people have been affected, with vast areas of farmland, homes, and infrastructure swallowed by the surging waters. The districts of Feni, Parshuram, Fulgazi, and Chhagalnaiya have suffered the most, as the Chhota Feni River, along with the Muhuri, Silonia, and Kahua rivers, swelled beyond control.

Residents of these regions are in shock, noting that such severe flooding has not been witnessed in over three decades. The immediate trigger for this disaster, as widely believed in Bangladesh, was India’s decision to release water from the Dumbur Dam.

Indian authorities, however, have pointed to heavy rainfall in the Gumti River’s catchment areas as the primary reason for the dam’s release. Nonetheless, Bangladeshi officials and local media remain adamant that the scale of the flooding could have been mitigated with better management and communication from the Indian side.

In response to the growing accusations, India’s Ministry of External Affairs (MEA) has defended its actions, stating that the water release from the Dumbur Dam was an automatic response to the heavy inflow caused by intense rainfall.

According to the MEA, real-time flood data was shared with Bangladesh until the floods disrupted communication channels. Indian officials maintain that the crisis was an unavoidable consequence of natural forces and that they are not to blame for the resulting devastation.

Despite these explanations, Bangladesh remains skeptical. Officials in Dhaka argue that India’s handling of the dam and the subsequent communication breakdown significantly worsened the situation. They believe that India could have taken additional steps to minimize the impact of the water release, including better coordination with Bangladeshi authorities and ensuring contingency plans were in place for such emergencies.

The fact that communication between the two countries failed at a critical moment has raised alarm bells in Dhaka. This disruption has exposed serious flaws in the existing bilateral protocols, particularly in how emergency communications are managed. Whether due to inadequate preparedness or a lack of priority given to emergency communication, this failure has clearly exacerbated the disaster.

The flood crisis is not merely an environmental catastrophe; it carries significant political and diplomatic repercussions as well. The incident has strained the already fragile relations between India and Bangladesh, with public opinion in Bangladesh increasingly viewing India as an unreliable and negligent neighbor. This growing sentiment could have lasting effects on bilateral relations, particularly in areas such as water-sharing agreements, border management, and regional cooperation.

For years, Bangladesh has advocated for fair and equitable water-sharing agreements with India, given its reliance on trans-boundary rivers like the Ganges, Brahmaputra, and Teesta. The recent floods have reignited these concerns, with calls growing louder for a more transparent and accountable system for managing shared water resources.

In the wake of this disaster, there is a strong push within Bangladesh for a reevaluation of its water-sharing arrangements with India. Many are demanding stricter regulations and more effective safeguards to prevent a recurrence of such incidents. Additionally, there is increasing support for greater international involvement in overseeing the management of these critical resources, considering the potential for cross-border disputes.

While the political and diplomatic fallout is significant, the human toll of the floods is devastating. Millions of people have been displaced, with many losing their homes, livelihoods, and, tragically, loved ones. The affected regions are now facing severe shortages of food, clean water, and medical supplies, as relief efforts struggle to address the magnitude of the disaster.

The floods have also deepened existing vulnerabilities in Bangladesh’s rural areas, where poverty and inadequate infrastructure make communities particularly susceptible to natural disasters. The long-term impact of the floods will likely be felt for years, as Bangladesh undertakes the arduous task of rebuilding and recovering from this calamity.

As Bangladesh contends with the aftermath of the floods, it is evident that the country must bolster its disaster preparedness and resilience. This involves not only improving infrastructure and early warning systems but also ensuring that neighboring countries are held accountable for actions that have cross-border consequences.

Bangladesh must continue to assert its rights and interests in regional discussions, particularly concerning water management and disaster response. For India, this incident should serve as a critical reminder of the importance of maintaining transparent and reliable relationships with its neighbors. Effective communication, collaboration, and a genuine commitment to resolving shared challenges are essential to preventing similar disasters in the future.

 

Friday, 2 September 2022

Pakistan: IMF country report

International Monetary Fund (IMF) has released its Country Report on Pakistan after the Executive Board completed seventh and eight reviews of the Extended Fund Facility (EFF).

According to the IMF report, program implementation deteriorated after the completion of sixth review in February 2022. Amid a tense political landscape, programmed fiscal adjustment was undone and several key EFF commitments were reversed like imposition of Petroleum Levy (PDL) and grant of subsidies on petroleum products.

In June 2022, two Performance Criteria (PC) on net international reserves and the primary budget deficit requirements were not met, as well as three continuous PCs were missed.

Moreover, seven structural benchmarks were also not met. Analysts believe that fiscal deficit target of 4.6% of GDP was ambitious.

Recent floods in various parts of the country have caused major losses to human lives, infrastructure, and crops. According to Dr. Aisha Pasha, State Minister for Finance the initial estimates indicate that the losses caused by floods were close to Rs2 trillion (2% of GDP).

Considering this view, it is likely that Pakistan’s fiscal deficit will likely clock in between 6-7% of GDP for FY23.

It is also expected that IMF will consider the potential impact of floods and provide some relaxations especially if Pakistan continue to remain steadfast in implementation of reform agenda agreed with IMF.   

As per the IMF country report, Pakistan Government has recently taken major steps including the completion of prior actions that led to revival of the IMF program.

It is believed that the current political setup has taken unpopular steps recently in spite of increasing political noise. This helped Pakistan got two waivers on PCs and also brought IMF program back on track.

IMF also approved Pakistan’s request to increase the size of program by US$1 billion and extend the program till June 2023 instead of September 2022.

Waivers on PCs & extension in program tenure will provide the much needed support to the Pakistan economy.       

IMF has recommended Pakistan authorities to restore fiscal and debt sustainability, safeguarding monetary and financial stability and maintaining a market driven exchange rate.

IMF has projected GDP growth of 3.5% in FY23 with Current Account Deficit (CAD) of 2.5% of GDP (US$9 billion) and CPI inflation of 19.9%.

It is anticipated that GDP growth will be in the range 2.5% to 3.5% in FY23. Current Account Deficit is likely to remain less than 3% of GDP. 

Though, it is early to estimate the potential impact of floods on current account but risk to upward revision in current account estimate remain (close to around US$1 billion) depending upon the crop damage and the demand to meet required demand through imports.

It is also believed that pressures on current account due to crop damage could also be somewhat compensated through: 1) economic slowdown and lower demand for imports, 2) higher remittances due to flood support from expats, and 3) increased aid and financial assistance from international community.

As per IMF, gross external financing requirement for FY23 is estimated at US$31 billion and available financing is projected at US$33 billion for FY23 as against SBP’s target of US$37 billion for FY23.

Analysts believe any additional financing requirement due to higher current account could be compensated through increased foreign aid and financial flows to the country.

On the monetary front, keeping in view the recent inflationary trend (CPI Inflation of 27.3% in August 2022) and the outlook on food prices post floods, it is likely that average inflation will also cross IMF estimate of 20%.

CPI inflation is likely to remain below 24%, keeping in view the extent of damage from recent floods and potential economic slowdown.

Analysts do not expect any further hike in interest rates in 2022. In fact, it is expected to start falling from 4QFY23.