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The Centre for Policy Dialogue (CPD) yesterday put the flood damage estimate at Tk 11,418 crore or 3.4 percent of GDP and asked the government to adopt short- and medium-term measures for a year.

The independent civil society think-tank says its initial damage estimate can rise to Tk 15,000 crore at the maximum. The UN had put the figure at $7 billion and the government at $6.7 billion

"The main challenge the government faces now after the recession of floodwaters is to create domestic demand through adopting an expansionary economic policy by increasing public expenditure," Dr Debapriya Bhattacharya, executive director of the CPD, said at a press briefing on "Rapid Assessment of Flood 2004" in the capital.

Bangladesh with its own domestic resources can by and large finance the post-flood reconstruction work, the CPD maintains.

"A closer look at the allocations made under both Revenue Budget and Annual Development Programme (ADP) reveals that the government has at its disposal (either unallocated or earmarked for use of physical infrastructure development) at least Tk 3,426 crore.

"If one can tap into the Block Allocation for the other sectors (and not fully utilise the Unexpected Allocation) total amount of available resources may go as high as up to Tk 4,944 crore... the total cost of damage in the public sector, as estimated by the CPD, is about Tk 4,303 crore."

Dr Debapriya warned against continuing the incremental expansionary approach till the general elections, as it may weaken macro-economic fundamentals, particularly by way of widening fiscal deficit underwritten by the government borrowing.

The CPD suggests the government restructure budget to enhance public investment in post-flood rehabilitation programme, increase credit flow in the agriculture and industrial sectors and woo additional foreign aid.

The worst flood-hit areas received less relief materials compared to moderately-affected areas, according to a CPD survey.

The government and the NGOs were sluggish to respond to the relief needs and their responses, too, were poor at the initial stage, many respondents of the survey told the CPD.

"The response of the NGO was surprisingly late. In some areas, the NGO response came after the government programmes were initiated," the CPD says quoting its survey.

"The distinguishing features of this year's flood was that individual level and community level philanthropic and relief operations were extensive in many areas and in many instances actually filled the vacuum left by the late response of the government and the NGOs," the CPD observed.

Dr Debapriya noted the NGOs have wider scope in the post-flood rehabilitation and urged the government to take measures to immediately release foreign funds channelled to the NGOs.

Many raised allegations of nepotism, pilferage and politicisation in relief distribution operations.

The CPD sent its teams to 12 upazilas of nine districts to carry out the survey and interviewed some 900 flood-affected local people. They also talked with government officials including upazila nirbahi officers, magistrates, journalists and NGO activists.

The damage assessment was done on the basis of data and information gathered from government and non-government sources and also from media reports. Later, the CPD held an in-house dialogue with the government and non-government experts before finalising the report.

The private sector has lost Tk 7,115 crore to the floods -- agriculture Tk 2,916 crore, residential Tk 3,706 crore and industries Tk 493 crore, according to the preliminary estimate of the CPD.

The public sector damage stands at Tk 4,303 crore, of which infrastructure incurred Tk 3,857 crore, education Tk 345 crore, health Tk 48 crore, industries Tk 38 crore and agriculture Tk 3.9 crore.

The CPD suggests the government spend Tk 3,426 crore the budget set aside as block allocations and under repairs, maintenance and rehabilitation head for post-flood infrastructure rehabilitation.

It warns the government against corruption in repairing flood-damaged dams and embankments, bridges and culverts and roads and other physical structures.

The think-tank also advocates for expanding credit to agriculture and small and medium enterprises as, it observes, credit expansion played the crucial role in economic recovery after the 1998 deluge.

The CPD advises the government to negotiate with the development partners for another $200 million in budgetary support in addition to the $200 million it recently received from the World Bank.

This year's flooding affected 33.75 million or 24.96 percent of the total population and submerged 30,582 square kilometres area, as against 31 million or 24.55 percent of the total population and 100,000 square kilometres area in 1998.

Total farm damage in the latest floods stands at 1,694 crore, which was Tk 3,483 crore in 1998.