Holding on to hope amid drawn-out adversity

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Wheels have started shifting the streets of Bangladesh.

Dhaka, which wore a deserted look soon after the lockdown was enforced towards the end of March to fight the coronavirus disease, has returned to its usual state, marked by chaotic traffic, horns and tailbacks.

Residences are more available to allow their domestic personnel in and rickshaw-puller Akram Hossain can now pedal on the streets of the capital to earn a living for his family.

Roadside tea-sellers are popping up. Restaurants and offices are open aswell. In the outskirts of the administrative centre, personnel are busy making goods to ship abroad.

The economy is recovering from the rubble left out after the Covid-19 pandemic emerged just half a year ago, on the trunk of rebounding exports, astonishing record flows of remittances, uptick in private credit and peoples' responses.

However, the journey has been very costly.

Just like the virus has tilted this world off its axis, Bangladesh paid much price.

Prior to the onslaught of the respiratory disease commenced on March 8, Bangladesh have been on an upward growth trajectory and monetary wellbeing. The pace has lost its steam.

The condition took away so many lives, snatched the country's gains in poverty and inequality decrease in the recent decades, wiped out millions of jobs and income and put a sizable number of men and women in the struggle of managing three meals a day. 

Human development has suffered a significant setback.

"The economy lost a sizable number of jobs in the formal and informal sector in short order.  Many of these losses may never be recovered," said Zahid Hussain, a former lead economist at World Bank Bangladesh.

Several private research organisations estimate that the shutdown for two-and-a-half months to battle the virus increased the poverty level by as much as 20 percentage points.

The planning commission revised upwards its estimate to 29.4 % in June. Extreme poverty doubled to 20.5 per cent.

The highflying growth of the economy nosedived, posting 5.2 per cent in the last fiscal year, down from its historic most of 8.15 per cent a year ago.

The official growth figure is greater than the forecasts by multilateral lenders such as International Monetary Fund, World Bank and Asian Development Bank and local think-tank Centre for Policy Dialogue (CPD).

Whatever be the growth numbers, Bangladesh's economy has performed much better than India's.  Asia's third-largest economy shrank 23.9 % in the 90 days to June this season from that a year earlier, reports Bloomberg.

"There was an enormous disruption alive and the economy. It will require time to create up for losing. However, good things are that the economy didn't see any contraction," said Arif Khan, chief executive officer of IDLC Finance.

Entrepreneurs, top executives and economists said the Tk 1 trillion-plus stimulus package unveiled by the federal government for industries, businesses and agriculture played a key role in boosting confidence of entrepreneurs, who saw their earnings plummet as the lockdown brought monetary activities to their knees.

Businesses responded to the brand new reality starting from working at home using digital platforms to paying attention to enhancing efficiency. Many had to cut operational costs, jobs and salaries and sacrifice profits to withstand the unprecedented health insurance and economic emergency.

"We have seen the hardest time of our business. We've seen how worst and devastating the situation could possibly be. The catastrophe came all of a sudden for which we weren't prepared," said Md Fazlul Hoque, managing director of Plummy Fashions.

Hoque recalled businesses holding a meeting at the Metropolitan Chamber of Commerce and Industry in Dhaka on March 8 on how to find alternative sources for raw materials and other goods to ensure smooth supply as China, an integral supplier, was dealing with the deadly virus.

"The news broke at night and we went into lockdown by the finish of the month.  We'd experienced deep trouble in April and could. From that situation, we have made a huge turnaround."

"It isn't that the coronavirus situation has improved but at least, the garment sector has made a turnaround," the entrepreneur said, adding that the support from the federal government to garment entrepreneurs to pay wages to staff at less expensive helped the sector fight.

Shams Mahmud, president of the Dhaka Chamber of Commerce & Industry, said the private sector was protected as a result of a bold move of the federal government as it introduced low-cost stimulus packages and a re-financing scheme to aid vulnerable large, cottage, micro, small and medium enterprises.

"Almost all major export sectors have become operational and export growth is little by little picking up," said Mahmud, also the managing director of Shasha Denims.

Rubana Huq, president of the Bangladesh Garment Manufacturers & Exporters Association, said the Covid-19 caused unprecedented disaster in the type of cancellation of orders and income loss.

"The industry is rebounding strongly."

Citing export data, she said the growth is apparently V-shaped, a recovery pattern that involves a sharp rise back again to a previous peak after a sharp decline. 

"Yet, there is no scope for complacency since the recovery from the pandemic is faltering," said Huq, also the managing director of Mohammadi Group.

Not absolutely all export sectors are successful.

The exporters of leather goods and footwear, among the leading sectors, are bearing the brunt of the pandemic. Leather goods and footwear export dropped 25 per cent year-on-year to $428 million in the first eight months of 2020.

"We are available goods at reduced prices and profits and then stay afloat and retain markets," said Md Saiful Islam, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh.

WHAT WENT WRONG

However, much of the worse might have been avoided had there been sufficient planning and timely response from medical ministry to control the spread of the virus.

The disease, which originated in Wuhan, China in December 2019, had not been taken seriously by public health officials, so the preparation to tackle the condition regarding increasing the testing and tracing capacity was poor.

"We were right into a denial syndrome for a brief period," said Fahmida Khatun, executive director of the CPD. "The lockdown was also imposed without the proper planning."

Rather, corruption and anomalies associated with the purchase of protective gears and testing materials were exposed.

While there's been appreciation for the stimulus package, support for the poor, like the new ones, was inadequate. There was also complaint of irregularities and food and cash aid going to the wrong hands.

"Support for the marginalised was very inadequate in comparison to their need," Khatun said.

Rizwanul Islam, a former special adviser for the employment sector at International Labour Office in Geneva, said the money transfer scheme came very late, was too small in amount and failed disastrously in its implementation.

"What should have experienced the hands of the indegent in April was inaugurated in-may, and by July, only a tiny proportion of the prospective number was reached," he said.

LESSONS LEARNED

The pandemic taught doing office from home is very much possible and tasks could possibly be accomplished without physical contacts. Businesses also had to consider ways to cut costs.

"We have learned how to function digitally. A country like Bangladesh has functioned digitally. It is proved that people could work using digital platforms without physical contact," said Azam J Chowdhury, founder and chairman of East Coast Group.

"Digital platforms and the purchase of goods by people helped the economy remain functional."

"We've lost huge business in the last half a year. However, what we achieved is bigger than that," said Syed Almas Kabir, president of the Bangladesh Association of Software and Information Services.

"There's been a realisation that ICT is vital for life. This is the biggest achievement."

Rupali Chowdhury, president of the Foreign Investors' Chamber of Commerce & Industry, said fixed costs of a company ought to be kept at a sustainable level to survive as you will find a sharp decline in demand.

Through the pandemic, the areas in the general public healthcare system that require to be improved have already been identified. Accountability and recognition of doctors and healthcare professionals ought to be ensured.

She said overall, the Covid-19 testing capacity and the management of patients has improved compared to the initial days.

According to Chowdhury, the return of the economy to the pre-Covid-level will be possible when consumers will come out of their concern with the coronavirus.

She said individuals are still spending only on essential items. "The world will come to normalcy when vaccines can be found."

Yasir Azman, CEO of Grameenphone, said losing in this Covid-19 pandemic is immeasurable.

"But, together, we are stronger in the recovery journey. We are now more digital savvy and adapting to new uses of technology. The transformation is supposed to happen after two to three years. It really is happening now in many ways."

"It's a demanding situation we are into and that requires collaboration and leadership to navigate through."

Tanvir Ahmed Mishuk, managing director of Nagad, a mobile financial service, said, "Our best lesson is to control resources in the perfect way atlanta divorce attorneys aspect."

"So that you can face current challenges, every person must adopt technology as fast as possible."

LOOKING FORWARD

Regardless of the sign of recovery, there are uncertainties and risks. Remittance inflows increased in recent months, but CPD's Khatun said there exists a caveat.

"Many migrant workers could possibly be returning home. I am uncertain whether this will continue. The quantity of individuals going abroad has slumped."

Revenue collection remained low until July as the government's development expenditure fell 17.6 per cent year-on-year in the first month of the fiscal year.

Zahid Hussain said the economy is recovering relative to the ebb reached through the March-May period. 

"However the recovery is uneven and uncertain.  The non-vulnerable middle class and the rich seem to be benefiting most from the recovery implying further deepening in inequalities."

"At lower levels, the task has recovered, but incomes are far behind and the health and poverty pains remain deep together with pervasive."

The recovery is likely to continue, said Mostafa Kamal, chairman of the Meghna Band of Industries.

"We urge public agencies to greatly help us and increase the process of approval for investment and business."

Selim Raihan, executive director of the South Asian Network on Economic Modeling, said the caliber of institutions matter in handling the crises including the Covid-19.

"The countries that performed much better than Bangladesh in handling the health hazard and resultant financial crisis have better institutions. Therefore, reforms in critical institutional domains are extremely important."

Aameir Alihussain, managing director of BSRM, sounded caution.

He said people may actually have relaxed and so are not wearing masks when they step outside their houses.

"If another wave comes, monetary activity will decline and several companies will never be able to survive. Then it'll be tough for the federal government to cover another stimulus."  
Source: https://www.thedailystar.net

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