Nearly 83 percent small and medium enterprises (SME) are yet to receive any support from stimulus packages even one year into their announcement as a tool for corona recovery, , reveals a business group study.
In first week of April 2020, the government unveiled the stimulus plan to address the pandemic impact on economy declaring stimulus of Tk 727.5 billion.In a joint study report of Business Initiative Leading Development (Build) and Policy Exchange Bangladesh published at a webinar on Thursday, found that around 69 percent firms are unable to pay staff wages and other fixed cost.
Planning Minister MA Mannan was the chief guest while Build chairperson Abul Kasem Khan made address of welcome at the virtual meeting to review the stimulus scenario.
The sales of 86 percent firms have been negatively impacted by the pandemic and 95 percent of firms reported a depressed demand currently compared to the pre-pandemic scenario which indicates, as researcher mentioned, the consumption and demand has not recovered fully.
Addressing the session, Planning Minister MA Mannan said the government is always welcoming green field FDI in Bangladesh considering quality of investment.
“National Budget for FY 2021-22 has focused on the continued economic recovery amid the pandemic. The government will consider the demand of the bottom line of the society if a second stimulus package is formulated,” MA Mannan said.
In that case importance will be given to activate more SME supportive organization. Best practices from different developed countries should be considered to make economy vibrant, he noted.Minister also appreciated the role of central bank in disbursing stimulus packages for the cottage, micro, small and medium enterprise (CMSME) sector
Federation of Bangladesh Chamber of Commerce and Industry (FBCCI) president Jashim Uddin said the government addressed private investment, SME, agriculture, health, education, employment, social safety net, integrated logistics system as tool for its economic recovery plan.
International Labour Organization (ILO) director Tuomo Poutiainen said the social inclusive measures like assisting youth, real unemployed, vaccination programme, access to education, mental health etc. need to be addressed and linked to the stimulus package.
To ensure continuity of the growth of investment, productive employment, the social safety net programme etc, the upcoming stimulus package should focus on inclusive areas, he observed.
He praised the government for addressing almost all the macro and macroeconomic issues with the context of the pandemic in the 8th Five Years Plan.
In keynote, Policy Exchange Chairman Dr M Masrur Reaz said the design of the stimulus packages is not inclusive enough because of lacking in consideration of the challenges and needs of small entrepreneurs.
He added that the working capital support and the overall design of the packages lacked incentives for employers to sustain employment.
Focusing on education system upgradation, Metropolitan Chamber of Commerce and Industry (MCCI) president Nihad Kabir said the informal economy has not received the expected benefit from the announced financial stability plan.
Chittagong Chamber of Commerce and Industry (CCCI) president Mahbubul Alam claimed that the desired results are not achieved through the first announced FSP.
“Private investment and demand are decreasing, on the other hand unemployment rate is increasing. The government has taken mega projects to take the logistics sector to a global height,” he added.
Centre for Policy Dialogue (CPD) Distinguished Fellow Prof Mustafizur Rahman said the employment generation should get proper focus on FSP as the foreign direct investment has been reduced an alarming rate amid pandemic.
He referred targeted FDI of seventh five year planning was 33 billion US dollar of which only 11 billion has been achieved.
Dhaka Chamber of Commerce and Industry (DCCI) president Rizwan Rahman, Chittagong Stock Exchange chairman Asif Ibrahim, SME Foundation Chairperson Masudur Rahman, Bangladesh Bank general manager Jamal Uddin and BUILD CEO Ferdaus Ara Begum were also connected to the session.