Cyclone Sidr, which hit southern districts of
In the discussion we pointed out the following issues:
Growth concerns: The economic impact of the cyclone may be more significant than the political fluctuations. The economy was already sluggish before the cyclone hit due to flash floods.
- Higher oil prices were sapping government budgets and increasing fertilizer and transport costs.
- The area hit by Cyclone Sidr is often described as the national rice basket and the destruction of crops there will have a significant short-term impact. There is a possibility of price hike of food grains in near future. Some 2,000 square kilometres of rice crops have been completely destroyed, pushing up prices by 15% in some places. They are likely to increase further as the government moves to boost dwindling rice reserves.
- The government has requested 500,000 tonnes of rice from donor countries in order to make-up a shortfall -- the country is normally self-sufficient in rice.
- Rice imports mean that problems with grain supply are unlikely to result in a severe shortage of food or famine (as occurred after the 1970 cyclone), though the peak of any shortages will not be clear until March -- when rice stocks are traditionally at their lowest.
- Other agriculture sectors have been affected -- livestock worth 44 million dollars was destroyed.
- Reconstruction will put further pressure on budgets that are already strained by the need to cover higher oil subsidies.
