Independent University, Bangladesh

ECn-302 section 1

Flood and Bangladesh economy

Group 07 summer 2020

Submitted by:

Md. Enamul Kabir ID: 1810095

Nishat Saiyara Chowdhury ID: 1821663

Nabin Raj ID: 1820108

Md. Asfaq Uddin ID: 1721529

Submission Date : 21 September, 2020

Submitted to:

Md. Kamrul Islam

Senior Lecturer

School of Business,

Independent University Bangladesh.

 Letter of Transmittal

28th of July 2020

Mr. Md. Kamrul Islam

Senior Lecturer,

School Of Business.

Course ID (ECN-302, Section-1)

Independent University, Bangladesh (IUB)

Subject: Letter of Transmittal for The Intermediate Macroeconomics-302 report.

Dear Sir,

With due honor and respect I would like to say that I, Md. Asfaq Uddin want to submit my research
report. This was a Research and group study on the impact flood on Bangladesh economy.

We did our research and prepared the report based on the data collected from research, articles and
website through questionnaire survey, observation methods. This was an enormous Experience for us and
we have learnt a lot about the country’s Economy, policy and strategic factors of flood in Bangladesh
economy.

I sincerely hope that this report meets your approval and I will be glad to provide you with any
Clarification if required.

Thanking you.

Sincerely,

Md. Asfaq Uddin (On behalf of Group-7)

ID: 1721529

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Abstract
The possibility of a worldwide pandemic in Current situation concern for many countries around the
globe. Many predictions of the economic and social costs of a modern-day economy are based on the
effects of flood in Bangladesh Economy.

This report begins by providing a little historical background on history of some major floods in
Bangladesh, a short-lived, but tragic event that has all but escaped the public’s consciousness today.

Detailed flood statistics for cities and states, including those in the Eighth Federal Reserve District, are
presented. These data provide insight into mortality differences based on race, income and place of
residence.

The Evidence on the economic effects of floods in Bangladesh are reported using newspaper articles
published during the economic situation. There is also a survey of economic research on the subject. The
information presented in this report and information provided in some prominent publications on the
flood impact economy are then used to formulate a list of the likely economic effects of a modern day
Critical economy.

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 Topic Sub-Topic Page

1 Introduction 4

2 Methodology, and scenarios 4-5

2.1 Methodology 4

2. 2 Scenarios 4

3 Major floods In Bangladesh: 5

4 6-8
Interrelationship between flood
and Economy :
:
4.1 Impacts on buildings and 6
Infrastructures
7
4.2 Impacts on personal security

4.3 Impacts on Agriculture 8

5 Impacts of major flood in 9-11

Bangladesh economy:

5.1 Macroeconomic Impacts. 11

6 References: 12

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1. Introduction

Bangladesh, owing to its position on the global map in the South-Asian region, is one of the most
vulnerable countries susceptible to climate change scenarios, especially floods. In past decades various
model studies have been conducted, predicting an alarming level of severity of the impact of climate
change on Bangladesh, raising an inevitable urge for the development of its future climate projection
technologies & techniques. Notwithstanding a simplified forecast contingency plan, Bangladesh has
received its own fair share of disastrous natural events over time, some of which can be attributed to
climate change. Especially floods.

2. Methodology, and scenarios

2.1 Methodology

This synthesis was done using the information from different peer reviewed scientific research and gray
literature such as reports, media sources including, folklore etc. Information was also gathered through
local and national workshops and seminars and also from attending different regional workshops and
conferences. Research institutions, meteorological stations, rural and urban administrative bodies and
Non-Government Organizations (NGOs) of both Bangladesh and Nepal also provided valuable
information for the study. The information gathered was used to examine and document the societal
impacts and vulnerability of Bangladesh and Nepal to floods specially reflecting on coping strategies.

2. 2 Scenarios

Coastal flooding occurs in Coastal flooding occurs in April -May and October October-November
November when intense pre and post monsoon when intense pre and post monsoon cyclonic winds funnel
waters cyclonic winds funnel waters into the into the Bay of Bengal, producing tidal waves up to Bay of
Bengal, producing tidal waves up to 5 m or more above normal 5 m or more above normal high tide high
tide with associated wind speed with associated wind speed over 220 km/h. over 220 km/h. Severe floods
occurred in 1954, '55, '70, '74, '84, '87, ' Severe floods occurred in 1954, '55, '70, '74, '84, '87, '88, ’98,
2004 and 2007. and 2007. Severe coastal flooding occurred in the year 1822, 1876, Severe coastal
flooding occurred in the year 1822, 1876, 1897, 1942, 1950, 1897, 1942, 1950, 1970, 1974, 1988, , 1974,
1988, 1991, 1994, 1995 , 1994, 1995 and 2007. Based on the historic records, it appears that the Based on
the historic records, it appears that the frequency, magnitude, and duration frequency, magnitude, and
duration of floods have of floods have increased substantially during increased substantially during the

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last few decades. For the last few decades. For example, all major floods covering more than example, all
major floods covering more than 35% of the country occurred after 1974.
 The 1988 flood resulted in a total damage to the national economy of approximately US$2
billion.
 It was estimated that 45 million people were directly affected (Brammer, 1990).
 The cost of direct damage for 1998 flood was US$ 2.8 billions (World Bank, 2002).
 In 2004 the flood damage was estimated to be US$ 2 billion (Hype, 2007).

3. Major floods In Bangladesh:

In the 19th century, six major floods were recorded: 1842, 1858, 1871, 1875, 1885 and 1892. Eighteen
major floods occurred in the 20th century. Those of 1987, 1988 and 1951 were of catastrophic
consequence. More recent floods include 2004 and 2010.

1)The catastrophic floods of 1987 occurred throughout July and August and affected 57,300 square
kilometres of land, (about 40% of the total area of the country) and was estimated as a once in 30-70 year
event. The seriously affected regions were on the western side of the Brahmaputra, the area below the
confluence of the Ganges and the Brahmaputra and considerable areas north of Khulna.

2)The flood of 1988, which was also of catastrophic consequence, occurred throughout August and
September. The waters inundated about 82,000 square kilometres and its return period was estimated at
50–100 years. Rainfall together with synchronisation of very high flows of the three major rivers of the
country in only three days aggravated the flood. Dhaka, the capital of Bangladesh, was severely affected.
The flood lasted 15 to 20 days.

3) In 1998, over 75% of the total area of the country was flooded, including half of Dhaka. It was similar
to the catastrophic flood of 1988. A combination of heavy rainfall within and outside the country and
synchronisation of peak flows of the major rivers contributed to the flood. 30 million people were made
homeless and the death toll reached over a thousand.The flooding caused contamination of crops and
animals and unclean water resulted in cholera and typhoid outbreaks. Few hospitals were functional
because of damage from the flooding, and those that were open had too many patients, resulting in
everyday injuries becoming fatal due to lack of treatment. 700,000 hectares of crops were destroyed,400
factories were forced to close, and there was a 20% decrease in economic production. Communication
within the country also became difficult.

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4) The 1999 floods, although not as serious as the 1998 floods, were still very dangerous and costly. The
floods occurred between July and September, causing many deaths, and leaving many people homeless.
The extensive damage had to be paid for with foreign assistance. The entire flood lasted approximately 65
days.

5) The 2004 flood was very similar to the 1988 and 1998 floods with two thirds of the country under
water. In early October 2005, dozens of villages were inundated when rain caused the rivers of
northwestern Bangladesh to burst their banks. Floods also occurred in 2015 and 2017.

4. Interrelationship between flood and Economy :

Bangladesh, owing to its position on the global map in the South-Asian region, is one of the most
vulnerable countries susceptible to climate change scenarios, especially floods. In past decades various
model studies have been conducted, predicting an alarming level of severity of the impact of climate
change on Bangladesh, raising an inevitable urge for the development of its future climate projection
technologies & techniques. Notwithstanding a simplified forecast contingency plan, Bangladesh has
received its own fair share of disastrous natural events over time, some of which can be attributed to
climate change. Especially floods.

4.1 Impacts on buildings and Infrastructures

Research shows that the impact of flooding on housing and households can be extensive. Fast flowing
flood waters are capable of washing away entire slums while the slow rising water damages buildings. In
rural areas of Bangladesh, houses with “Mud Walls”, “Coconut leaf Walls” and “Tin Walls” collapse
leaving people and assets exposed and vulnerable. About 32% of the total population in Bangladesh lives
in slums and thus a large number of people are left homeless and stranded for days due to flooding.
Similarly, a substantial reduction is visible in the capacity for providing both immediate and long-term
healthcare and support. The city waste management system is negatively affected during flood, with
garbage scattered all over the clogging drainage system and polluting environment in both the countries.

Since Bangladesh is situated near the equator, specifically in part of the Tropic of Cancer (the most
southerly position at which the Sun can be immediately overhead, resulting in more direct and thus more
potent sunlight than in areas where the sunlight is more dispersed), temperatures are hot and humid.

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Floods, accompanied by storm surges and cyclones, periodically affect the country. Most elevations of
land masses are less than 5 meters above sea level (in the coastal south, terrain is less flat, and is
characterized by hills; as a result, more of the southern regions are exactly at sea level). As a result of
materials deposited by tides on the coast, the Bengal Delta has prograded (wherein the low-lying ground
has grown farther out into the sea) for the last several decades.

Bangladesh already has poor infrastructure: power plants are often unable to meet electrical demands,
roads and bridges are damaged and disrupted, and government supported public transit is effectively
ineffective in areas where it is not nonexistent. people are forced to leave their homes and normal life is
disrupted. Extensive flooding simply damages such infrastructure to become further inadequate. In order
to avoid the impacts of flooding, a large proportion of Bangladesh’s population live in and are migrating
to regions relatively distant but still somewhat susceptible to overflow (e.g. to Bangladesh’s capital city of
Dhaka). As a result, the population density of regions in Bangladesh skyrocket, as there is less land
available for those residing. In addition, because it is desirable to settle in areas that are in proximity with
water or water bodies, a larger rural population is displaced by increasing water levels, especially
considering the lack of running fresh water available in homes.

4.2 Impacts on personal security

Both locations of flood-risk regions and locations of water level increases demonstrate linearly
concentrated patterns along the edges of major rivers and along the coastline. Regions at flood risk appear
to overlap or be in extremely close proximity to regions of water level increases, demonstrating a strong
positive relationship with occasional outliers (e.g. from cyclones). Since flood-risk regions are determined
by the presence of water level increases (as well as the frequency and intensity of said increases) the
relationship between the two features is correlational and causal (with the cause being locations of water
level increases).

Loss of life is considered to be the most important loss type in the public perception of disasters29.
During 1972-2013, 15,033 people died from flooding in Bangladesh, resulting in an average 358
fatalities per year. In Bangladesh, the major impact of floods is death caused by drowning, water-borne
diseases, diarrhea and snakebites. During the 2007 monsoon floods in Bangladesh, snake bites were
estimated to be the second most significant cause of death after drowning and contributed to more deaths
than even diarrheal and respiratory diseases. Many people change their jobs and residential location
changes because of the flood. Violence and injuries are under-reported in developing countries, especially

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during natural disasters such as floods. In our country Child and woman violence and injuries occurred in
flood affected areas.

4.3 Impacts on Agriculture

Bangladesh has a large agrarian economy. Bangladesh agriculture comprises about 18.6% of the country's
GDP and employs around 45% of the total labor forces 52. Majority of the poor in this country live in
areas of high risk to floods and landslides and are more reliant on local natural resources. A special type
of rain fed rice “Aman” grown in Bangladesh is highly susceptible to river floods and has been affected in
all years of flooding. During the Bangladesh 1998 floods, 69% of Aus rice production, 82% of deep-
water Aman and 91% of transplanted Aman were lost leaving the whole country food insecure. Floods in
Bangladesh also affect small agriculture farms such as mushroom industries. The whole mushroom
industry was seriously affected by the floods of 1998 and 2007 causing huge loss of foreign currency.
Within rural and semi-urban areas, the impacts of flood are severe on domestic animals like poultry and
dairy which are the major sources of earning in both Bangladesh. Cultivated fish (Catfish, Shrimp and
Carps etc.) drift away due to erosion of embankments and boundaries of the lakes or ponds and resulting
in economic losses to the export industry of Bangladesh. In Bangladesh a large portion of food supply
depends on agricultural production. Due to flooding, losses in crop, dairy, poultry and fisheries are
leading these countries dependent on foreign aid. Another prime impact is tree destruction. With the
increasing trend of climate-induced floods, millions stress have been dying due to floods and
waterlogging. This situation has caused severe impacts on socio-economic conditions of Bangladesh. The
impacts involved a significant loss in terms of investment, biodiversity and afforestation program.

Bangladesh is a country almost entirely situated on flat low land that is barely above sea level. It consists
mainly of regions relating to or situated on a river or riverbank (such delta plains occupy almost 80% of
the country; furthermore, the Bengal Delta is the largest delta in the world). Bangladesh’s climate, similar
to other South Asian countries, is heavily affected by monsoons (which are seasonal prevailing winds that
bring rain between May and September and detract precipitation between October and April). As a result,
precipitation cycles seasonally, with both extremes of high and low amounts of rain.

4.4 Impacts on Transport and travel

Floods make roads impassable, destroy bridges, and increase the danger of travelling along rivers and
crossing rivers. Furthermore, the cost of boat transportation increases when roads cannot be used. Access
to all key services including health and education, as well as markets often becomes limited. Needs
assessment and distribution of aid may be difficult due to damaged infrastructure and adverse weather

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conditions. Every year, the number of people in need due to flooding exceeds the amount of aid provided
by the Government and development partners. Agencies are unable to meet the level of need due to the
scale and frequency of disasters.

5. Impacts of major flood in Bangladesh economy:

In Bangladesh flooding is a natural phenomenon that is expected annually. On average 18% of the land is
flooded and there of records of 75% of the country being inundated such as the case in 1988. Bangladesh
is prone to serious and chronic flooding as 75% of the country is less than 10 meters above sea level and
80% of it is classified as floodplain. Bangladesh is the delta region of South Asis’s great rivers: the
Ganges, Brahmaputra and the Meghna. These along with 300 rivers and channels create the floodplains of
Bangladesh. The river systems drain a catchment area of 1.7 square kilometres. The floodplains are home
to a large population of
people, most of which is
rural and poor, whose life
is delicately linked to the
flooding regime. The
annual flooding proves
beneficial but the low
frequency high magnitude
floods have adverse
impacts on the Bengali
citizens and the economy.

Despite several major disasters, Bangladesh remains among a handful of countries that have avoided a
single year of negative growth since the 1990s. Damage to agriculture due to flooding has decreased with
changes in cropping patterns, particularly the shift from deepwater “aman rice” – which highly
susceptible to floods - to “boro rice”, which is harvested before the monsoon season starts. On the other
hand, rapid and uncontrolled urbanization, weak environmental management, poor maintenance of
infrastructure, and increasing investments and population growth in the floodplains may hinder flood
reduction efforts and contribute to additional physical and economic losses after major floods.

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The disastrous flood of 1998, which lasted from the first week of july to the third week of September, was
the worst in recorded history; it was the most severe both in terms of depth and duration. The relative
severity of the impacts of severe
floods in Bangladesh has decreased
substantially since the 1970s due to
the improvement macroeconomic
management, increased resilience of
the poor, and progress in disaster
management and flood protection
infrastructure. The 1974 flood was a
1-in-9-year event, which resulted in
damages of 7.5 percent of GDP. In
comparison, the 1998 flood was a 1-
in-90-year event, flooding nearly twice the area but resulting in damages of 4.8 percent of GDP.

The increased resilience of Bangladesh to floods is also apparent when recent GDP and agricultural
growth rate trends are examined with respect to the timing of flood events. Major flood events are shown
in the figure as red dots. Until the 1990s, GDP and agricultural growth rates sharply declined following
major flood events. However, the relative effects of major floods have diminished after 1990. These
recent gains may be at risk if the severity of floods increases with climate change. Change.

The 2004 floods lasted from July to September and covered 50% of the country at their peak. At the time
of the July 2004 floods 40% of the
capital, Dhaka was under water.
600 deaths were reported and 30
million people were homeless.
100,000 people alone in Dhaka
suffered from diarrhoea from the
flood waters. Bridges were
destroyed, the death toll rose to 750
and the airport and major roads
were flooded hampering relief
efforts. The damage to schools and

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 hospitals was estimated at
$7billion. Rural areas also
suffered, the rice crop was
devastated as were important
cash crops such as jute and
sugar.

In April, the haor areas in the

country’s northeast suffered
from flash floods that destroyed
a substantial portion of the boro
rice crop. The main wave of
monsoon flooding started in
early July, eventually affecting 36 million people (almost a quarter of the total population) living in the
northern and central districts, including Dhaka. The inundation caused nearly 800 deaths, affected 2
million acres of agricultural land, and damaged and destroyed infrastructure and social and educational
facilities as well as private assets including housing, crops, livestock, and fisheries.

Damage and Losses of the 2004 Flood. The effects of the disaster include asset losses (direct damage) and
output losses (indirect losses). Preliminary estimates show that total assets and output losses due to the
floods are approximately Tk 134 billion (about US$2.3 billion), including both the public and private
sectors. Of this total, Tk 79.8 billion (US$1.35 billion) correspond to lost assets and Tk 54.7 billion
(US$930 million) to lost outputs. Asset losses were substantial in sectors such as housing, transport
infrastructure, as well as crops, livestock and fisheries. Output losses have been mostly incurred by the
private sector, mainly due to agriculture sector losses Macroeconomic impacts (secondary effects) of the
floods are discussed below.

5.1 Macroeconomic Impacts.

The country’s economy appears to be more resilient to disaster impacts, which tend to be temporary and
are expected to be overcome in view of Bangladesh’s good fiscal and macroeconomic performance.
Preliminary analysis shows that GDP growth will be about 5.2 percent, lower than the 5.5 percent
projected before the floods and the Government’s target of 6.0 percent. Agriculture, particularly the crop,
livestock, and poultry subsectors, and small and medium scale industries, are likely to be the most
adversely affected in the short run. After being on the rise for three consecutive years, inflation appeared

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to have stabilized before the floods. However, delayed transplanting of the aman rice crop and flood-
induced setbacks in other food crops (particularly vegetables) have contributed to higher inflation, which
reached a six-year high of 7.9 percent in October 2004.’

6. Reference:

1. https://www.sciencedirect.com/science/article/pii/S2212094714000930?fbclid=IwAR3tCqDVoA
w6HcVXizhw2jT7ixbvMHhi1sAFjPLdLapxAsDNenQH13usOhk

2. https://www.arcgis.com/apps/Cascade/index.html?appid=79bf52aefcc74ca1a542658cb47e2d04&
fbclid=IwAR2--kOKooQTQ-z0aqlDstVUWk9mbnan3T2aubRguSKCVLRnx_suiP4NLWM

3. https://reliefweb.int/sites/reliefweb.int/files/resources/180520%20Start%20Fund%20Floods%20
Disaster%20Summary%20Sheet.pdf?fbclid=IwAR3PHwniefyn3rAAQEDJqlnEvKZvKNp9_xW
Cfb90ZGCx9-Qp6E0o5pWZOis

4. file:///C:/Users/ASUS/Desktop/ECN%20302%20report/Flood-Monowar.pdf

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