Stressing the need for diversifying the economy alongside the RMG sector, former lead economist of the World Bank Dr. Zahid Hussain said that it is crucial to develop other sectors.
He came up with the observation at the fourth episode of Youth Policy Forum (YPF) talking policies titled ‘Growth, Competitiveness, and Macroeconomic Policies’ through a virtual programme.
He further highlighted the window of opportunity for Bangladesh as Japanese and American firms move away from China.
In the list of countries being considered for relocation, Bangladesh has competitive advantage in terms of labor cost and wages but Bangladesh has been ranked poorly in terms of institutional quality and doing business indicators, he added.
The fourth indicator deals with experience in doing international business and is partially skewed for Bangladesh due to our lack of export diversification. This brings the need to make our investment climate more favorable to the forefront, he stated.
The episode also observed that the Bangladesh economy had been exhibiting a downward trend during the coronavirus pandemic, with economic growth and other economic factors declining.
With the pandemic restricting mobility and assembly, the supply chain has been severely disrupted, thereby further accelerating this decline. This disruption has also led to an increase in poverty and unemployment.
He pointed out that flattening the curve is the only sustainable way of forward; otherwise we will have to go through multiple openings and reopenings of the economy.
He believes humility to be very important for the path to recovery in this pandemic.
Replying to a question from the audience about Nobel laureate Dr. Abhijit Banerjee’s recommendation to print money, Dr. Hussain explains that ‘printing money’ is a metaphor here. The main intention is to ensure cash relief for those employed in the informal sector.