Coronavirus in Bangladesh: Experts for prudent monetary recovery plan
Collected
As coronavirus has started taking its toll on the country’s economy alongside the general public health, economists think the government needs to immediately workout a well-thought-out recovery plan and action programmes to tackle the toxic impact of the deadly disease.
With the cancellation of orders around $2.58 billion of RMG products by foreign buyers, halt generally in most monetary activities and decline in remittance flow, professionals also warned that the country’s fast-growing economy and growth brace for serious fallout that can't be tackled without proper strategies and a highly effective economic diplomacy.
The economists highly appreciated Prime Minister Sheikh Hasina for announcing a bailout package of Tk 5,000 crore for the struggling export-oriented industries to overcome the coronavirus impact, and said such support also needs to get to other sectors, especially the informal one.
Former caretaker government finance adviser Dr AB Mirza Azizul Islam said coronavirus is wreaking a havoc on the country’s economy and its own channel of transmission is RMG, tourism, remittance, transport and informal sectors.
“It’ll increase unemployment, reduce the poverty reduction rate and overall production. Low-income persons will be affected badly. The Asian Development Bank predicted that Bangladesh’s GDP growth will be affected. The actual ramification will rely upon the extent and amount of the coronavirus prevalence, and action plans to recover the finical damage,” he said.
Mirza Azizul said the Prime Minister announced a stimulus package of Tk 5,000 crore for the RMG sector and that's good, but specific plans should be spelt out for the informal sector which shares 85 percent persons of the total employment in the united states.
He said the government must widen the social safety net with satisfactory allocation as the low-income group of individuals is now jobless. “Besides, proper strategy and plans has to be taken to support the virus and tackle its fallout.”
Executive Chairman of Power and Participation Research Centre (PPRC) Hossain Zillur Rahman said three types of men and women will suffer huge financial losses as a result of coronavirus attack. “One group is whose products are fully reliant on foreign buyers, the second group whose supply chain depends on imported raw materials-- machinery-- from abroad, and the third group is whose livelihoods be based upon internal demands, which the largest damaged group.”
He said the RMG sector is facing trouble and this problem ought to be resolved. “But, there’re lakhs of men and women in the informal sector and it will also get proper attention.”
The PPRC chief said the country could not prepare well beforehand to contain coronavirus. “We shouldn’t make the same mistake when confronted with a potential economic crisis in the days to come. We have to determine what kind of support could be provided in the specific sectors. It usually is financial incentive or policy support.”
He said they are conducting a study to estimate the probable fallout of the coronavirus and submit suggestions to overcome those.
Former lead economist at the World Bank Dr Zahid Hussain said the coronavirus has started affecting Bangladesh’s some business sectors although some sectors will witness unpredictable impact in the days to come.
“We’ve already seen the effect on some specific sectors, including RMG, health, tourism and other services sectors. The impact will be observed in other sectors soon, too. Actually, all of the finical sectors are affected more or less as a result of coronavirus.”
The noted economist said the country’s export earnings will face a significant setback because so many markets, including that of the united kingdom and the united states and the UAE, remain shut now. “The country’s RMG export has already been in the negative trajectory. A big impact will fall on remittance, too.”
Zahid said different international organisations may provide the country fund to meet up coronavirus impact and the government should take programmes as preparation to use that money properly.
Dr Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), an exclusive think-tank, said Bangladesh will face both domestic and external impacts of the coronavirus.
“The national economy will face a slowdown and lose its pace if the existing situation prevails for a long period. Our earnings shortfall can deepen further while the export earnings will drop drastically as a result of coronavirus,” he said.
Stating that Bangladesh’s economy is under a significant threat because of the COVID-19, International Chamber of Commerce, Bangladesh (ICC,B) President Mahbubur Rahman urged the policymakers to work through a proper strategy to overcome it.
The veteran business leader said Bangladesh’s export earnings fell by 4.8 percent in the first eight months of the existing fiscal year-- to $26.24 billion from $27.56 billion in the same amount of the last fiscal year -- and this downward trend might aggravate in the coming months when confronted with wholesale cancellation of export orders.
“Thus, Bangladesh’s financial activities may hinder as a result of direct impact on production, supply chain and market disruption and impact on companies and financial markets,” Rahman added.
President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Rubana Huq said, “The work order situation is quite vulnerable. Some 954 factories reported 822.91 million pcs worth $2.65 billion export cancelled/ organized affecting 1.94 million workers. The situation might worsen.”
She thanked Prime Minister Sheikh Hasina for announcing a stimulus package of Tk 5,000 crore for the export-oriented industry to overcome the coronavirus fallout.
Rubana said they spent sleepless nights worrying about the fate of the workers. "Limitless gratitude for you (PM) for giving us this support at a crucial time when orders stand cancelled and we face uncertainty.
She said the amount of money will be utilized for providing the salaries and wages of personnel and employees only.
Source: http://m.theindependentbd.com
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