Tuesday, 27 September, 2022

Bangladesh economy needs to be diversified: Economist

  • Staff Correspondent
  • 24th August, 2020 12:00:00 AM
  • Print news

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.

This former lead economist pointed out that the RMG-centric economic policies have turned Bangladesh into a ‘Pyjama Republic’ though the contribution of the sector cannot be denied in our economy, foreign trade, and other aspects. 

 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.

Highlighting the rising inequality with the shift to ‘work from home’ amidst the pandemic, Dr Akhtar Mahmood, the Advisor of Youth Policy Forum (YPF) said that only the rich are able to adapt, leaving the poor further behind and the income gap is on the rise consequently.

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.