Straight Talk

Bangladesh Back on Track

Abdul Mannan

19 September, 2020 12:00 AM printer

Bangladesh Back on Track

Abdul Mannan

The year 2020 will go down in the history as the year of doom and destruction. It all began in Wuhan, the sprawling capital of central China’s Hubei province when cases of deaths of larger number of residents of the city were reported first in the beginning of the year.  The deaths were traced to an unknown virus-Covid-19, commonly known as Corona. Initially the force of destruction of the virus was little known until the virus turned into what is now known as a pandemic. Over the centuries there were quite a few pandemic that took a heavy toll of life and economy, most notably the Spanish Flu that struck Europe and spread in the eastern part of United States towards the beginning of the last century. Though there is no exact data of casualties of this pandemic, it is estimated that about 500 million people or one-third of the world’s population became infected with this virus. The number of deaths was estimated to be at least 50 million worldwide (Europe-Eastern Part of US) with about 675,000 occurring in the United States alone. In strict sense of the term, Spanish Flu was not a global pandemic as the concept of globalisation was unknown till the later part of last century.

Towards the beginning of this century the world witnessed the break of epidemics called SAARS or EBOLA but it did not take the shape of global pandemic which happened in the case of Covid-19. This happened because today globalisation is a reality, people in millions are travelling around in the world every year, sometimes on a short notice, for business, holiday or on family visits. These people acted as carries of the virus and today about 210 countries across continents, from Auckland  to Alaska or from Belgium to Brazil, are affected and as of Thursday approximately three million were affected in  these countries of which 0.95 million people died. The end to this catastrophic pandemic still remains elusive and the global economic outlook, amongst other issues, still remains uncertain for many countries. What is sure the world will never be the same again. According to the World Bank estimates published in its regional report recently, ‘The Covid-19 pandemic has spread with alarming speed, infecting millions and bringing economic activity to a near-standstill as countries imposed tight restrictions on movement to halt the spread of the virus.’ The WB report continues and mentions ‘The baseline forecast (of economy) envisions a 5.2 per cent contraction in global GDP in 2020….Every region is subject to substantial growth downgrades. East Asia will contract by 2.7%....downturns are expected to reverse years of progress toward development goals and tip tens of millions of people back into extreme poverty. WB also says, ‘Coronavirus pandemic is set to bring down Bangladesh’s gross domestic product growth from a high-flying 8.15 per cent last year to just 2 per cent this year ending in June 30 (2021). The highest growth range is also predicted to be a bleak, 3 per cent only. If that happens, there are signs of that becoming true, then Bangladesh will see its growth rate dipping below 3% for the first time in three decades’. The country’s GDP growth rate was 2.61 % in the 1988-89 fiscal year (General Ershad regime). Historically WB estimates are conservative in nature and seldom reflect the true picture of a country’s economy. Countries often have hidden strengths. To have a better picture one has to read the WB estimates with similar estimates made by other equally important international agencies like the World Economic Forum, International Monetary Fund (IMF) or the Asian Development Bank.

In an intermediary report published by the Internationally Monetary Fund (IMF) this August it was reported that Bangladesh’s GDP growth in the year ending on 30 June 2020 was 3.8 per cent while India grew at the rate of 1.9 per cent, China 1.2 per cent, Indonesia 0.5 per cent, Japan (minus) -5.2 per cent and the worst being Italy which had growth of (minus) -9.1 per cent followed by Spain with (minus) -8 per cent. The primary reason for a comparatively better growth in Bangladesh can be ascribed to its agricultural sector energised by the leadership of the country’s Prime Minister. The country saw a bumper harvest of Boro crop and there are indications that the Aus crop (July-August) will also end with a good harvest. Agriculture has always been an important life line of Bangladesh’s economy.

On 14 September the Asian Development Bank in its ADB Outlook (ADO) 2020 published from its Manila headquarters predicted that the Bangladesh’s economy will grow at a rate of 6.8 per cent in the current fiscal year (FY 2021, ending next June). The report mentions that ‘the growth reflects gradual recovery, supported by a strong manufacturing base (small and medium) and strengthening of growth in export destinations…Bangladesh’s economy has started recovering from the pandemic. Despite significant pressure on the health and pandemic management systems, the government has managed the economy well with appropriate economic stimulus and social protection measures, ensuring basic services and commodities for the poor and vulnerable.’ This surely is a robust recognition to the government’s success in handling the pandemic related crisis that hit the country in last March, initially having a paralysing affect amongst the larger sections of the society including the important government institutions.

It is a fact when the pandemic hit Bangladesh in the first week of March, no one realised its destructive capability. As news of the damage done to the other parts of the world travelled to Bangladesh, people became aware of the danger of the pandemic and the government realised it has to act quickly to protect its economy and the people from the lurking danger of the pandemic. Bangladesh’s largest exported oriented sectors, including the readymade garments apprehended the fast approaching challenges of keeping its business going. The government stepped in fast with generous incentive packages to help these ‘vulnerable’ sectors. The ADB recognises this and says ‘prudent macroeconomic management and speedy implementation of the government stimulus measures are the key imperatives to ensuring the projected recovery.’  Bangladesh’s readymade garments export is picking up, remittance inflow has now increased to USD 39.4 billion and this has happened to a great extent due to the government’s policy of offering 2 per cent incentive for sending remittance through legal channels, expatriate workers who had to return home in the beginning of the pandemic have started to return back to their work place and the Bangladesh’s foreign exchange reserve have crossed USD 39 billion mark, an all-time high.

Another remarkable feat that Bangladesh can boast is amidst the initial hiccups caused to the arrival of the pandemic and due to the announced lockdown and closure of all offices, banks and business houses, education institutions, the daily workers were affected hard.  Again the government stepped in to feed anyone who needed to be fed. This quick action by the government was remarkable by any standard as no such action was reported from any other country, the states of Paschimbanga and Karnataka in India being exceptions. Alongside the government other philanthropic organisations came forward in aid of the common people. Though the healthcare sector was in a state of shock initially, it soon recovered. However the common belief is that it could have done better had it not been for few self-seeking unscrupulous corrupt individuals who wanted to capitalise on the people’s misery. All said, it must be recognised that the leadership of country’s Prime Minister Sheikh Hasina during this difficult time must be appreciated and her proactive measures has enabled the country to avert more chaos and damage. Many developed countries of the west have failed on this count. 

The next big challenge for Bangladesh or any other country affected by the pandemic is to prepare itself to handle the post-Covit-19 emerging new socio-economic situation. It must be recognised that many of the economic activities preceding the pandemic may not be the same in the post-Covid-19 world. People’s work habit has changed. Many businesses globally have shut down and countries saw emergence of new entrepreneurs ‘working from home.’ In Bangladesh people have learned that they can very well be in lucrative business just by supplying groceries or homemade food to other homes. Once the normalcy returns, many would like to continue with their entrepreneurial activities, even supplying food to work places. They will need support from the government. Many young people have learnt that they can very well use their two-wheelers for delivery of essentials to homes and offices. People who thought living a life with the use of analogue technology now knows many of their routine work can very well be done with simple digital technology. Bangladesh has seen a remarkable growth in its tele-banking service, a service even not easily available in neighbouring India. Country’s education system has witnessed the use of digital technology to keep the learners busy. WB in its   Blogspot has recognised this and said in a report last August that ‘Covid-19 boosts digitisation of higher education in Bangladesh.’ The people of Bangladesh would like to think the country is returning to normalcy but they would like to see more robust leadership of the Prime Minister in the post-Covid era. They are holding their hopes high. However people must recognise that the danger of Covid-19 is not over yet and their indifference can be very costly.

 

The writer is an analyst and a commentator.


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