Home ›› 27 Nov 2021 ›› Editorial
Just as Bangladesh's economy was recovering from the worst days of the Covid-19, the spiralling price of essential goods has made lives difficult for the common people and stalled the economic recovery process. Metropolitan Chamber of Commerce and Industry (MCCI), in its Review of Economic Situation in Bangladesh for July-September 2021, identified four major challenges in the path of recovery from the economic fallouts of the Covid-19 pandemic. These challenges are the recent rise of essential commodity prices and industrial raw materials, declining remittance inflows and the comparatively slow vaccine rollout. On the other hand, the drastic fall in the number of coronavirus cases has made the majority of businesses hopeful about the recovery of the economy. On another positive note, the report stated that the country's foreign currency reserve remains in a satisfactory position. Be that as it may, in spite of the recovery trends in the economy, the challenges must be faced in order to ensure a smooth economic recovery.
Over the last two decades, the country has witnessed a sustained economic growth. Bangladesh has been achieving a steady and stable economic growth along with maintaining sound macroeconomic stability with stable inflation, low public debt, and greater resilience to external shocks. And many a pertinent observer considers Bangladesh as a model for economic development. However, at present, Bangladesh is struggling to recover from the slowdown caused by the pandemic. The devastating impacts are being observed in almost all sectors of Bangladesh's economy, especially the industrial and service sectors. The increasing price of raw materials will further hurt the industrial sector. Transport and communication, community and social services, bank and financial intermediaries, tourism, and wholesale and retail trade have all faced economic slumps.
Be that as it may, the increasing price of essential commodities has dealt the most serious blow to people with limited income. The daily necessities of life are becoming costlier with each passing day. The government's market intervention mechanism has failed to produce the desired results. The pandemic has resulted in many people losing their jobs. Many others have seen a significant reduction in their incomes. The South Asian Network for Economic Modelling (SANEM) has reported that 42 per cent of the population has fallen below the poverty line during the span of the pandemic.
The authorities must realise that the price line is the lifeline. In addition to the natural pull-push factors in the open market economy, there are manipulators, profiteers and syndicates to create volatility in the retail market. Unscrupulous traders have been exerting unbearable pressure on people in general, especially on fixed income groups of people in society. And they are often using the pandemic as an excuse. The recent announcement to increase the price of fuel oil has had a spill-over effect on transportation, power generation and agriculture. All are contributing to the price hike. One of the major reasons for the rising prices is the absence of a proper mechanism or a plan to regulate the prices of essential commodities.
The decreasing remittance inflow is another stumbling block to the recovery process. As is well known, remittances have multipurpose positive effects on the economy. Remittances boost growth, and the growth is widely shared. The decreasing inflow is an ominous sign as far as economic recovery is concerned.
What is essential for rebuilding the economy is to revise and balance monetary and fiscal policies to boost investment and create jobs evenly. There is also a need to introduce new social assistance programmes. The pandemic has given Bangladesh an opportunity to address its target of minimising longstanding inequalities in access to health and basic services and financial products and digital services for the common people.
