The World Health Organization (WHO) has declared Coronavirus outbreak a pandemic on 11th March 2020. Coronavirus is a type of a virus that can attack the respiratory tract meaning the mouth, nose, throat or lungs. It causes common cold, fever, coughing, etc. It can also cause severe illness. People can be affected by droplets and these droplets carry the virus into the air and enter through the mouth, nose, throat or lungs of a person who is within six feet. The virus infects the lungs causing lungs become inflamed. Infection of the virus causes damage to the lungs and triggers to an inflammatory reaction. Then fever may develop also resulting in coughing and difficulty in breathing. Then the oxygen level of the blood may decrease. In some people who become severely ill in that case other organs may be affected such as kidneys or the heart.
According to Johns Hopkins University and Medicine as on 17th April 2020 due to coronavirus disease (COVID-19) globally total confirmed cases are 2,196,109 whereas total numbers of deaths are 149,024 in 185 countries. In Bangladesh total confirmed cases are 1838 among which 75 people died according to Government data as on 17th April 2020. According to Johns Hopkins University and Medicine as on 17th April 2020 in Italy total confirmed cases are 172,434 among which 22,745 people died, in Spain total confirmed cases are 188,068 among which 19,478 people died, in the USA total confirmed cases are 672,303 among which 31,015 people died and in China total confirmed cases are 83,760 among which 4,512 people died.
As this is undoubtedly a global issue so our government needs to act promptly and tactfully in every situation with clear vision to save lives, to mitigate losses due to the coronavirus outbreak.
However, knowing the risk factors and the nature of coronavirus the Government allowed around 3 (three) lacs migrant workers (source: Different TV channels and Newspapers) to enter into this country who were living in different countries. After arriving here in Bangladesh few were taken to the Hajj Camp for quarantine purpose. Though they denied to stay there for 14 days. Surprisingly due to their agitation government finally decided to release them from the Hajj Camp. That decision had created enormous dissatisfaction among the country people. That incident has put the nation in a vulnerable situation simply because of the fast spreading nature of coronavirus.
As we all know, many of the governments around the world have stopped flights to fight against coronavirus. We are a densely populated country and for that reason we should have taken the same decision from early March this year.
Some professionals uttered confidently and smartly that coronavirus cannot spread in the regions where the temperature is above 23 degree Celsius and there is no need to wear masks for all people which have become viral in the social media. This type of serious misinformation has done immense harm for our country. Interestingly Centers for Disease Control and Prevention (CDC), USA has said that masks are very much effective in protecting someone from COVID-19.Moreover, some political leaders and social activists are now distributing relief to the poor. This is a good move but some of their actions made it questionable while they were not maintaining social distancing rather trying to violating government directives.
On 4th April 2020 thousands of RMG workers rushed towards the Capital as the competent authority declared that the RMG factories will be opened from 5th April 2020. It was a severe offence because it has clearly breached the government’s directive of maintaining social distancing. After extreme pressure and criticism the authority changed their mind.
In some cases our people are not also well aware of all the issues of COVID-19 and in most of the cases they are not ready to obey the law and government directives.
So, in this scenario overall supply chain will be disrupted badly which may have greater impact on daily life of all the country people. Already world supply chain has been disrupted. People will be losing their earnings, jobs and in that way unemployment will be high. In the USA a record number of 6.6 million unemployed people applied for unemployment compensation. Whereas, Investors may become more cautious while thinking of further investment here in Bangladesh rather they will try to adopt the “wait and see” policy. Already stumbling stock market may face severe bad impact due to the COVID-19. In addition to that, remittance is already declining and it may be continuing as the whole world is affected by coronavirus pandemic and our migrant workers will be losing their jobs in a huge number. Dependency on RMG sector may become curse for all of us resulting in sharp decrease in our export earnings. Tourism sector has been halted by coronavirus outbreak and according to Tour Operators Association of Bangladesh this sector already incurred loss of BDT 57,000 million. FDI will decrease whereas it was in a rising trend in the FY 2019 amounting to USD 3,888 million. In the meantime, exporters will face severe problem as it is a global issue. Other developed countries like USA, China, Italy, Spain, Japan and India are also struggling with COVID-19.
According to Bloomberg Saudi Arabian Government will provide 60% of the salary of private companies for the next three consecutive months amounting USD 2,600 million to save the companies. Singapore in an effort declared one month lockdown due to the coronavirus pandemic. In Bangladesh 37 private banks donated Tk. 140.8 crore to the Prime Minister’s Relief and Welfare Fund in an effort to help the government in mitigating the financial risk and health risk which arises from the coronavirus outbreak. Many other similar initiatives have been taken by different corporate bodies of the country.
Bangladesh Bank –The Central Bank of Bangladesh has taken prompt and effective measures in combating COVID-19. In an early effort along with other vital initiatives the existing Repo rate of Bangladesh Bank has been reduced by 75 basis points and re-fixed at 5.25 percent from 6.00 percent. The Cash Reserve Ratio (CRR) has been reduced to 3.5% (daily average) and 4% (bi-weekly average). To facilitate export trade due to COVID-19 related disruptions interest rates on EDF loans has been decreased whereas the size of EDF has been enhanced to USD 5.00 billion. It has been directed from the Central bank to the Banks and MFS providers to open MFS account of the workers and employees of export oriented garments factories within 20th April 2020 in view of disbursing wages accordingly. Moreover, Bangladesh Bank directed all the Schedule Banks and MFS providers and all Payment Service Providers for providing uninterrupted banking and payment services. Also Directed Banks not to downgrade the classification of loans until 30th June 2020. Usance period extended for maximum 180 days in case of back to back LC. And at the same time encouraged people in using Digital payment system. Also the Advance Deposit Ratio (ADR) has been increased to 87% for Commercial Banks except Islamic banks whereas Investment Deposit Ratio (IDR) has been increased to 92% for Shariah Based Islamic Banks.
Environment is getting better during this lockdown to a greater extent. It has been seen that Dolphins were playing near the Cox’s Bazar beach since there is no tourists in the beach. Busy cities and streets are now empty. People are staying in their homes for ensuring social distance. Geologists and seismologists are confirming that the coronavirus pandemic is making Earth vibrate less. The reduction of vibration on Earth’s upper crust generated by cars, trains, buses and people are resulting smaller earthquakes and other seismic events.
Matter of concern is that, World Health Organization has alerted that after Europe and America South Asia will be the centre of coronavirus pandemic which is really alarming for all of us living in this region. This is our sole responsibility to protect ourselves as well as our countrymen.
If we believe that we are in a recession then it is high time for us to invest on our Agriculture with special focus on crops, fisheries, dairy, etc as well as our own capacity building to increase agricultural production.
We must ensure food for all and act accordingly to maintain the supply chain involved here. Most importantly, making our product distribution channel vibrant during the pandemic is imperative.
At the same time, various Mega projects continuing in the country can be halted for six months to 12 months for ensuring sufficient liquidity in the market.
Whereas, Covid -19 has shown us 4th industrial revolution is not that important for us rather we must invest more on Scientists, Research and Development specially on Chemists, Pharmacists, etc to invent more life saving drugs.
Cash assistance and food support is needed for the poor people especially for the garments workers, wage earners, slum dwellers, etc in this pandemic situation.
People are losing their jobs, unemployment rate is increasing so government expenditure should be increased on this issues as part of social safety net programme.
Currency devaluation may not be a prudent solution in the perspective of our country.
Time has come to find out alternative to China as our major trade partner in case of import and export.
While taking foreign loans we must show high prudence and we must utilize the funds in a more effective and efficient way.
As Bangladesh Bank has taken so many initiatives to ease the situation and to increase the money supply in the economy so that it is necessary to maintain the inflation rate within a tolerable limit during the next 18 months.
Our export basket needs to be diversified and which is imperative now.
In Bangladesh there are 7.81 million SMEs that employ 24.5 million people according to BBS. SMEs are in real trouble and SMEs need better fiscal stimulus support from the government.
Law enforcement agencies should be given adequate power in confirming that all the people of this country are staying at home during the declared general holidays.
National emergency may be declared immediately for ensuring social distancing.
Government should be vigilant against hoarding and well aware about the unusual and syndicated price hike during the COVID-19 outbreak.
Before the scenario deteriorates it is imperative to take effective measures without any delay in combating coronavirus outbreak which is essentially important to save our people and to save our economy as well.
The writer is Deputy Director, Bangladesh Bank.