Result of Service

The ultimate result of service of this consultancy is an informed disaster risk reduction financing strategy for the Government of Bangladesh.

Work Location

Dhaka, Bangladesh

Expected duration

7 months 15 days

Duties and Responsibilities

Created in December 1999, the United Nations Office for Disaster Risk Reduction (UNDRR) is the designated focal point in the United Nations system for the coordination of efforts to reduce disasters and to ensure synergies among the disaster reduction activities of the United Nations and regional organizations and activities in both developed and less developed countries. Led by the United Nations Special Representative of the Secretary-General for Disaster Risk Reduction (SRSG), UNDRR has over 140 staff located in its headquarters in Geneva, Switzerland, and in regional offices. Specifically, UNDRR guides, monitors, analyses and reports on progress in the implementation of the Sendai Framework for Disaster Risk Reduction 2015-2030, supports regional and national implementation of the Framework and catalyzes action and increases global awareness to reduce disaster risk working with UN Member States and a broad range of partners and stakeholders, including civil society, the private sector, parliamentarians and the science and technology community.

Following prudent macroeconomic policies in the last 13 years, Bangladesh has managed to maintain macroeconomic stability and achieve high economic growth. It had consistently high GDP growth from 2009 to 2019 until the outbreak of the COVID-19 pandemic. During this period, Bangladesh also made steady progress in social development, such as reducing poverty, improving life expectancy, improving literacy, and increasing per capita food production.

Although Bangladesh successfully weathered the negative impact of the COVID-19 epidemic and the associated economic slowdown by implementing an effective fiscal and monetary stimulus program, the Russia-Ukraine war brought new challenges to the economy, preventing a full recovery from the pandemic.

Besides, despite remarkable progress in poverty reduction, Bangladesh faces significant challenges to enhancing further human development, living standards, and vulnerability reduction. Strong growth performance over the last decade has contributed to a remarkable reduction in poverty. However, a large proportion of the population still lives in extreme poverty and remains highly vulnerable to disaster shocks. Government spending to address disaster risks remains low. In particular, the low level of government revenues necessitates pre-planning for social assistance that may arise from disasters.

While Bangladesh is facing economic challenges caused by global winds, it is also struggling with escalating disasters due to climate change. This situation affects the social and macroeconomic balance negatively. Bangladesh aims to pursue pro-poor high-growth strategies that will require developing new growth engines, increasing productivity to take advantage of demographic dividends, closing infrastructure gaps, and investing in human capital to achieve high-income status by 2041. Given Bangladesh’s aspiration to achieve high-income levels by 2041, it must accelerate its ambitious reform agenda to achieve more resilient, inclusive, and sustainable growth. However, such climate and disaster-related events can disrupt economic activity and disproportionately affect the poor and vulnerable, causing significant long-term economic damage and putting pressure on the currency, reserves, and public debt.

Against this background, Bangladesh has set its course against climate and disasters by envisioning various strategies and policies, including the Delta Plan, National Adaptation Plan, and a series of five-year plans, with policies to increase income further and reduce poverty. These plans determined adaptation and mitigation priorities in Bangladesh’s transportation, energy, industry, infrastructure, and agriculture sectors, and the annual additional climate finance needs were estimated as 2-3 percent of GDP. For example, it is estimated that an annual investment of US$3.8 billion will be needed by 2030 in climate-resilient water resources management, flood prevention, and water supply and sanitation infrastructure planned under the BDP2100. Likewise, the Mujib Climate Welfare Plan estimates an annual investment of US$6.4 billion, including climate-smart agriculture, local adaptation, disaster risk financing, and BDP2100 resilience bonds.

In this context, Bangladesh Government requested access to IMF resources through the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF), and the Resilience and Sustainability Facility (RSF) with a disbursement 42-month program. With this demand, the Bangladesh government had an opportunity to reach US$3.3 billion with ECF and EFF arrangement and US$1.4 billion with RSF arrangement. The ECF/EFF arrangement is envisioned to help alleviate short-term pressure on the balance of payments and the budget and act as a buffer against shocks until policy adjustments and reform measures are implemented. However, it envisions RSF funding to complement reforms under the ECF/EFF by supporting authorities’ efforts to tackle climate change challenges.

RSF reforms include (i) prioritizing and allocating finance for the BDP2100, which includes strategies for climate adaptation and DRR investments, (ii) scaling climate-smart investment across sectors, (iii) facilitating an enabling environment and strengthening the institutional framework through better public financial management (PFM) and public investment management (PIM) practices, and (iv) leveraging different financing instruments.

One of the reform agents under the RSF is the creation of a national disaster risk financing strategy (DRFS) that integrates social assistance measures to protect the most vulnerable.

In this context, the UNDRR ROAP office will provide technical assistance to the Bangladesh government in preparing the Disaster Risk Reduction Financing Strategy (DRRFS), which covers all aspects of DRFS and includes more comprehensive elements. Within the scope of this technical support, the financing of DRR investments for disaster risk reduction will be evaluated together with risk financing instruments, and the most appropriate financing model will be developed in DRRFS to ensure that climate adaptation and DRR investments are cost-effective. In addition, the use of probabilistic cost-benefit analysis in DRRFS for prioritization of DRR investments and climate adaptation makes the financing requirements of these investments clear and transparent. In this way, the most cost-effective risk financing instruments and other financial instruments will be used to reduce the costs and risks of disasters. This also strengthens PFM and PIM practices by making them transparent.

In this way, the development of financial strategies for DRR and climate adaptation investments, together with strategies for using risk financing instruments, which have very important functions to protect the most vulnerable segments of society financially, will reduce macroeconomic and financial risks. Because with DRR and climate adaptation investments, protecting businesses and human capital against disasters will prevent a decrease in the economy’s total factor productivity and prevent the economic development trend from being negatively affected. Additional efforts to enhance climate adaptation and DRR spending efficiency would help meet the authorities’ climate and DRR objectives. In this respect, DRRFS will cover strategies related to both risk financing instruments and DRR financing instruments.

The consultant will work under the supervision of the Economic Affairs Officer of the United Nations Office for Disaster Risk Reduction, Regional Office for Asia and the Pacific (UNDRR ROAP).

Specific areas of support include:
• Adapting the models to be used in estimating direct costs with the DSGE model to the economic structure and functioning of Bangladesh
• Determining the resources for disaster risk reduction, climate change adaptation investments, and social assistance allocated for possible disasters in the state budget and/or external resources
• Determining the financial instruments to finance disaster costs, social aids, disaster risk reduction, and climate change adaptation investments
• Collecting related to macroeconomic data and other related data.

General
• Assisting in the creation of the Dynamic Stochastic General Equilibrium model (DSGE) for Bangladesh and models used to estimate direct costs
• Collecting the necessary data for the models to be used in the DRRFS
• Identifying the risk financing instruments and other financial instruments that can be used in the Bangladesh capital market for disasters that have occurred and may occur
• Overall support for liaising with national institutions, including supporting setting up working meetings and support organizing workshops and consultations.

Key Functions:
• Adapting the DSGE model and models used for estimating direct costs to the economic structure and functioning of Bangladesh in the preparation of DRRFS document.
• Collecting the necessary data for the models to be used in the DRRFS.
• Overall support for liaising with national institutions, including supporting setting up working meetings and support organizing workshops and consultations.
• The consultant will also provide some of the two-week training on DSGE models to the Ministry of Finance and other relevant ministry staff.

Qualifications/special skills

• Advanced university degree in economics, business administration or a related field is required. A first-level university degree in combination with a minimum of two additional years of qualifying experience may be accepted in lieu of the advanced university degree.
• A minimum of five years of relevant experience in economic analysis or public finance is required.
• Expert-level knowledge of Bangladesh’s economy and public finance is required.
• Knowledge of DSGE models is desirable.
• Having knowledge of the major schools of economic thought is desirable.
• Knowledge of time series or analysis is desirable.
• The applicants should be based in Dhaka, Bangladesh.

Languages

Fluency in English and Bengali is required.

No Fee

THE UNITED NATIONS DOES NOT CHARGE A FEE AT ANY STAGE OF THE RECRUITMENT PROCESS (APPLICATION, INTERVIEW MEETING, PROCESSING, OR TRAINING). THE UNITED NATIONS DOES NOT CONCERN ITSELF WITH INFORMATION ON APPLICANTS’ BANK ACCOUNTS.