The world economy is on the edge with no immediate hope for rebound. International organizations like the World Bank, the IMF and the OECD have warned of a deeper recession, even worse than the Great Depression of the 1930s. For Bangladesh, our GDP growth could crash to 2 % this fiscal year.
This means the economy has already slowed down. Before the pandemic, the world economy also had experienced an economic crisis during 2007-08, which led to huge unemployment globally. Now, with many countries across the world enforcing lockdown, the situation has worsened and the misery of the people has compounded. Bangladesh is not an exception.
Now we see sluggish economic activities, export-import business has almost ground to a halt, but the post pandemic value chains will be some reconfiguration of production chains, which that means shortened in the future and production will be more localized.
So we must have a workforce full of productivity. And that can help build better future for the nation of 170 million So, if the acute disruptions to the lives of millions will continue, food and cash should be the immediate priority. The government announced some rescue packages, which are piecemeal and of which nearly the half constitutes old schemes anyway. These have done literally nothing to help the distressed people. If we take any decision, we must think about the post-pandemic situation.
Though the government announced nearly BDT 1 lac crore, it is not adequate considering the staggering needs. Some programs are the continuation of the existing ones. BDT 5,000 crore for the export sector might be effective, because it is for workers' salary. Other schemes such as soft loans may not be utilized properly. Bank owners are there. At the end of the day, bank directors, not the government, will decide on who will get credit and who will not. So, the needy people are unlikely to benefit from soft loans.
Though I welcome the stimulus packages and social protection programs, the success of these initiatives depends on a few factors: these must be ensured that businesses that are really affected and the vulnerable people receive the support. Here, targeting the vulnerable people is most important. Strong monitoring and evaluation system is required to make sure the selection process and implementation are done efficiently, transparently, supported by accountability.
Special attention must be paid to the most vulnerable sections of society, like as women, indigenous people, day laborers and landless people. These people are the most vulnerable, not just this time, but they are least-protected. Another important thing is to ensure adequate and continuous supply of essentials and other items of mass consumption at reasonable prices.
It is believed that this fight against the invisible enemy has clearly exposed the holes in our healthcare system. I recommend urgent efforts to put in place a universal healthcare system and this is opportune given the upcoming budget, which will be on the table on June 11, 2020.
What should be done in this time, I can see it in two ways: one is external and the other is internal measures. Externally, we will need more multilateralism, more aid or assistance from the development partners. To achieve this, we need to build better relationship and win their trust.
Internally, we need some policy measures like the overhaul of tax policy, more cash to the poor's, interest waiver for the fourth quarter. Raising the minimum tax threshold to BDT 10 lac, reducing corporate tax and taking strong and effective steps to curb corruption are among the domestic measures.
Other thing we need to realize that production will be more localized. Buyers' choice will be changed. They will ask for cheaper and more environment-friendly products. Non-agricultural activities must be promoted with a clear eye on their ecological sustainability and their capacity for employment generation. This means we've lay greater emphasis on `green' production and expanding the provision of care services. The diversification of products is a must.
The writer is the business and economic editor of
The Daily Ittefaq
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