'Easier SME financing the main element to recovery'

bangladesh24.com
Easy access to finance for smaller enterprises is required for employment generation and economic recovery during and after the pandemic, authorities said on Saturday.

They also needed creating an effective database of the labour market situation in the united states to formulate time-befitting policies and offer financial and tech support team to jobless people to integrate them in monetary activity.

The suggestion came at a discussion organised online by South Asian Network on Economic Modeling or SANEM.
 
Chaired by Planning Commission member Professor Shamsul Alam, ILO country director in Bangladesh Tuomo Poutiainen addressed the programme as the special guest where SANEM research director Dr. Sayema Haque Bidisha presented the keynote paper.
 
Policy Research Institute executive director Dr. Ahsan H. Mansur, SANEM executive director Dr. Selim Raihan, and Institute of Governance and Development executive director Dr. Imran Matin spoke as the panelists at the function.

Dr. Mansur said currently, the united states is facing three challenges: containing the spread of the COVID-19 disease; issue of unemployment and livelihood; and supporting the recovery of the economy.

Since the economy has been opening up gradually, the trend in recovery is pretty slow, he said.

Expressing concern over the investment scenario, he said, "The private sector may well not invest until the pandemic situation gets better." "Public sector is likely to grab, but there are issues of resources," he added.

The main element problem for the general public sector investment is from the target of earnings collection and reality in collection activities.

Discussing stimulus packages, Dr Mansur said, "While the stimulus packages for big companies are being disbursed quickly, a delay has been seen in disbursing the stimulus packages for SMEs."

The disbursement of loans for SMEs should be expedited and bureaucratic complexities ought to be undone in that regard, he added.

Explaining the necessity of a focused recovery strategy, Dr. Mansur said attracting the investments moving out of China should be a part of Bangladesh's post-pandemic monetary recovery strategy.

Dr Raihan said in the short to medium-term, the continuing future of economy looks bleak and the depressing effects on employment and wages may continue.

He said the federal government policy response related to the current labour market has been weak and inadequate due mainly to lack of information and insufficient up to date data of the labour market.

He recommended beneath the current crisis, the federal government is going for an enlarged deficit budget to invest high on social back-up programmes in general.

Dr. Raihan suggested the federal government form a 'Labour and Employment Commission,' that may assess the existing unprecedented situation and suggested necessary measures.

Emphasising public employment programmes, Mr Poutiainen said the stimulus shouldn't only be for large businesses, but also give attention to employment-generating sectors.

He also said the creation of an information system on labour market is essential where regular update should be made.

"Such a system can be associated with job matching and job placement," he said.

In his concluding speech, Professor Alam said small and medium enterprises or SMEs were offered loans at 4.5 per cent interest rate under the stimulus package while the government will subsidise other 5.5 % of the loan.

Terming usage of finance more very important to smaller businesses, he said, since the prices of some products produced by such enterprises are relatively high, question has been raised as to why interest rate should be reduced further.

Mentioning increased labour productivity both in rural and urban areas, he said technical education is important to meet the requirement for the country's fast-growing industries.

In the keynote presentation, Dr Bidisha said the challenges of fabricating jobs during pandemic includes fall in domestic demand, fall in global demand, the influx of labour supply because of returning migrants, restricted productive activities and slow pace of private investment.
Source: https://thefinancialexpress.com.bd

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