As the world’s oceans continue heating up, it is the poorest countries – those that have contributed the least to climate change – that are set to suffer the most from increasingly frequent hurricanes, monsoons, cyclones, landslides, and flooding. That’s according to the stark conclusion of the IMF’s latest World Economic Outlook, which questions whether these mostly tropical nations will have the capacity to deal with the economic repercussions of recurring weather shocks. More disturbing news followed the publication of that report: the World Meteorological Organization released a paper on October 30th that pointed out that the concentration of CO2 in the Earth’s atmosphere grew by 3.3 parts per million between 2015 and 2016 – the largest increase on record.
For low-lying tropical countries, the effects of climate change are no hazy threat looming over the horizon. They are already here. And no other continental country in the world is more exposed than densely populated Bangladesh.
Situated at the end of a vast delta, Bangladesh faces more tropical cyclones than any other country. Two-thirds of the 163 million people strong country is less than five meters above sea level and is highly exposed to flooding, especially during monsoon season. No wonder that Bangladesh tops the 2015 Climate Change Vulnerability Index, with a risk level categorized as “extreme”.
The effects of every new storm on Bangladesh are wide-ranging. Floods destroy homes, inundate farms, cause business to shut down, ruin public infrastructure, and raise the risk of water-borne illnesses. Erosion eats away at an estimated 10,000 hectares of land every year and harms coastal aquatic ecosystems. The southwest coastal regions in particular are facing fresh water shortages as salt water creeps further onto low-lying plains.
As the earth’s temperature rises, these effects will only grow worse. According to IMF chief Christine Lagarde, a one-degree rise in the average annual temperature in a country like Bangladesh would in turn slash per capita GDP by nearly 1.5%.
Public policy to the rescue?
Faced with these facts, Dhaka has put climate change action at the center of its agenda, investing more than $10 billion in efforts to minimize the effects of global warming on the national economy. Bangladesh has financed community resilience efforts, strengthened embankments and sought to bolster the emergency response of government agencies.
But for a country that managed to cut levels of extreme poverty from more than 40% of the population in 1991 to less than 14% today, the stakes are incredibly high. Bangladesh’s success story, largely the result of a burgeoning garment industry, is now under fire. As temperatures and sea levels continue to rise, Bangladesh’s other economic powerhouse, responsible for 16% of its GDP and 47% of employment, risks unraveling: agriculture. And despite the momentous challenge of readjusting its economy while the clock is quickly ticking away, the government has done precious little to boost growth and diversify the economy.
Other than imposing protectionist measures (such as custom duties) on a range of imports - a solution that is only expected to raise prices for consumers and businesses while doing little to boost growth – Bangladesh has not embraced forward-looking policies. Indeed, instead of prioritizing short-term gains, Dhaka must focus on more ambitious structural reforms that will have a greater economic impact: pursuing greater regional integration, streamlining its regulatory environment, and pursuing more foreign investment in public infrastructure projects. Doing so would help improve the business climate, increase competitiveness, and allow more productive sectors to develop – ones that would be more resilient to the inevitable effects of climate change.
For instance, Bangladesh is still inadequately integrated with the South Asian Association for Regional Cooperation nations and with China’s Belt and Road Initiative, in part because of its outdated trade policies and domestic supply chain issues, which are bungling the government’s target to export $50 billion worth of garment products by 2020. According to a recent UN Development Program conference, exporters and importers still have to wait for roughly a week for their goods to be released from Dhaka airport and up to three weeks for imports to be released from the Benapole land port.
Bangladesh’s telecoms and energy infrastructure is also lagging behind its peers, with severe implications for nation’s economy. For example, Dhaka is planning to launch 4G connectivity soon, with an auction set for this year. While the plan is welcome in a country where millions depend on their mobile phones for Internet access, the government has been bungling the rollout – setting sky-high prices for new blocks, forcing operators to pay over $550 million to use their existing spectrum for 4G services according to current plans, and jeopardizing the implementation of the technology by proposals that would block operators from building telecom towers.
Dhaka has also failed to secure adequate private sector investment in energy infrastructure projects, with the government accounting for 90% of infrastructure spending and private sources accounting for only 10%. To be fair, the government enacted a successful private power production program in the late 1990s and has since initiated a large public energy investment program, in addition to importing electricity from India. This has helped boost the number of people with access to electricity from less than 50% a decade ago to 78% today. Yet substantial challenges remain, with demand continuing to exceed power supplies and generation capacity at only 60% of neighboring Pakistan. As the government scrambles for solutions to the energy gap, it has built two coal-fired power plants and allowed the private sector to construct even more – hardly the kind of private investment it should be pursuing at a time when it needs to curb pollution more than ever.
The challenges facing Bangladesh are certainly not fair. After all, the country only emits 0.3% of the emissions causing climate change. But if it does not start preparing now, not only the coastal parts of the country but also much of its economy will soon be underwater.