Written by The Banking Post
The finance ministry has been asked to set aside dedicated budget lines for disaster-related rescue operations instead of relying on block allocations, as Bangladesh faces increasingly frequent and severe natural disasters, officials said.
The request was made at a meeting on the National Strategy for Disaster Risk Financing (NSDRF), held at the Ministry of Disaster Management and Relief on Monday. Participants also called for keeping separate allocations for financial-sector rescue measures in case of sectoral shocks.
Officials noted that the government currently maintains block allocations for emergencies, but the rising scale and frequency of disasters demand more formal and predictable budgeting. Bangladesh faces major floods roughly every three years, alongside frequent cyclones and a growing number of earthquake-like events, causing widespread damage to crops, homes and infrastructure. The country ranks as the seventh most disaster-affected nation globally.
Despite the heavy toll, the meeting observed that Bangladesh lacks robust financial mechanisms to deal with these events. The annual cost of responding to disasters averages around US$810 million, while large but less frequent events can create substantial funding gaps.
The NSDRF called for integrating disaster risk financing into fiscal policy, expanding financial instruments, and building resilience in line with the Smart Bangladesh 2041 vision. Participants stressed the need for stronger fiscal buffers and more efficient delivery of relief funds through social assistance programmes.
They also highlighted several priorities: expanding insurance coverage for crops and vulnerable assets; encouraging private-sector initiatives; evaluating financial institutions for disaster financing solutions; exploring sovereign disaster insurance; and promoting loan-linked insurance to boost preparedness.
A senior Finance Division official said disaster impacts have already been incorporated into the Medium-term Macroeconomic Policy Statement. “More effective steps have to be taken for disaster risk reduction and successful disaster risk financing,” he said.
