Bangladesh economy awaits a bigger blow: Economists

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Continuation of the existing economic stagnation through the government-declared shutdown to prevent the spread of coronavirus will lead to a grim monetary outlook for Bangladesh, economists warn.
 
"There’ll be a major blow to the economy," former caretaker government adviser and visiting Professor at BRAC University Dr AB Mirza Azizul Islam said.

He said international organisations have previously projected low growth for Bangladesh at 2-3 percent, which was 8.15 percent in the previous year. Growth will depend on the continuation of today's situation. "If it continues then you will have a poor growth," he said.

Dr Islam said when the problem boosts the government’s main task will be restoring the supply chain, increasing export activities through import of raw materials and capital machineries, noting that otherwise it will be tough to recuperate the export markets.

He said remittance inflow would drop because of coronavirus pandemic and also to improve the situation, the government should give highest efforts to export manpower to the importing countries through diplomatic efforts.

He also said that there surely is weakness in the infrastructural structures in the united states where in fact the transportation and port management system has collapsed. These ought to be restored immediately.

Discussing the budgetary measurers after COVID-19, the economist said allocation for the social safety net has to be increased as a huge number of folks lost their income and jobs.

He mentioned that a sizable number of people are engaged in informal economy and relief programmes must be strengthened for them.

The government has many initiatives and attention should be given to make certain that these are administered properly, he said.

Distinguished fellow of Center for Policy Dialogue (CPD) Prof Dr Mustafizur Rahman said the united states is facing a tri-dimensional calamity - health, economic and humanitarian - and attention should be paid to all or any three sectors.

He said allocation for health sector in the united states may be the lowest, only 0.9 percent.

"The average allocation in the worldwide is 3-4 percent. We didn’t invest properly inside our health sector. We must give priority to your health sector to ensure that we can take the necessary steps for health security," he said.

He said that the federal government should allocate appropriate fund for the health sector in the next budget. However, safety gizmos for doctors have to be distributed right now.

For the economy, the CPD distinguished fellow said the economy was going through a tough time. He said the federal government has taken some measurers and these ought to be bolstered so that the country could enter recovery mood very quickly.

"Otherwise, it’d be difficult to regenerate the economy. The government should widen the expansion of monetary policy along with investment," he said.

On the humanitarian purpose, Dr Mustafizur said the back-up programmes ought to be widened and strengthened.

For ensuring food security, he emphasised on boro harvesting properly saying that this season is quite crucial for country in terms of ensuring food security.

"So far the problem of food security is good, nonetheless it will be based upon the boro crops. The federal government has announced its target to procure 17 lakh boro crops already and for that the federal government should prepare well," he said.

He said that if the Tax-GDP ratio of the country, which is below 10 percent, was like Nepal (18 percent) or India (17 percent), then it might be easier for the federal government to provide money easier.

He said the government should start the healing process as quickly as possible and take actions against tax evaders and loan defaulters alongside ensuring good governance.

"If we can do that, then we’ll have the ability to improve our capability against facing calamity such as this one," he said, adding that the government should mobilise foreign aid to face the aftermath of COVID-19.

Giving an answer to a query, he said the impact of COVID-19 on the economy could possibly be measured on its longevity.

"If we're able to start our activities completely swing in-may, then we're able to tackle the situation although the growth could have been lower than the prior year," he said.

If the lockdown continues till June, then the projection of the international agencies like World Bank will be true.

Dhaka University Professor of Development Studies, Dr Rashed Al Mahmud Titumir said the economy have been weak even before coronavirus struck.

He said poverty reduction was slowing, unemployment was high and export earnings were shrinking.

"There is a blow to the economy before COVID-19 struck Bangladesh. Now, the hit is much bigger as production is stopped. Taking into consideration the two blows, the magnitude will be quite definitely high," he said.

Titumir said the federal government must formulate its plan for three years and make budgets for another fiscals according compared to that. He suggested to check out the matter of fabricating a life cycle based social security system for people who are lagging behind, overhaul the health sector, provide stimulus not loan to agricultural sector, step into multiplier effect programmes, and increase mission oriented capital facility.

Regarding the funding, he said the so called five percent budget deficit won't work here, rather he suggested increasing it to ten percent, saying that consumption spending needs to be increased.

Dr Titumir put focus on maintaining foreign trade, not give any potential for currency fluctuation and negotiate bilateral partners for debt relief and long-term loans at low interest rates.

South Asian Network on Economic Modeling (SANEM) Executive Director Dr Selim Raihan said that it is obvious that you will see a large blow to the economy as all economic activities are halted as a result of lockdown.

"Export and remittance already faced serious setback and the coming days aren't that much promising," he said. "You will have an enormous negative impact [on the economy].”

Dr Raihan put emphasis on recovery plan from the federal government.

"It should are the fiscal measures, monetary policy and social protection in a way to stimulate private investment."

He mentioned that the Prime Minister already announced various stimulus packages where a number of these matters were included.

"The success of the packages will depend on financing, distribution and monitoring of the amount of money. This will be reflected in next several budgets," he said.

He also said the united states needs a major uplift to tackle post crisis situation looked after needs expansion of social safety net coverage.

"Bringing private sector in the investment will be a big challenge with reestablishment of supply chain," he said.

Dr Raihan said priority ought to be directed at boosting trade and addressing the inclining poverty rate.
Source: https://unb.com.bd

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