29% businesses asked to bribe for stimulus packages: SANEM

Nearly 29 per cent businesses were asked to bribe by officials involved in disbursing funds from the government-announced stimulus packages aimed at helping them tide over the pandemic, a South Asian Network on Economic Modeling survey says.

The government has announced 28 stimulus packages worth Tk 1,35,000 crore. The Bangladesh Bank said 83 per cent of the funds have so far been disbursed, mainly through commercial banks.

The lion share of the stimulus fund was disbursed by banks, while the rest by different state-owned entities and some non-government organisations.

SANEM said 32 per cent of those raising bribery allegations are from the SME sector, 43 per cent from medium enterprises and 19 from large businesses. Seventy-six per cent of them did not receive any money from stimulus packages.

SANEM surveyed 501 businesses from April to June this year, assisted by the Asia Foundation. It revealed the findings of ‘Covid-19 and Business Confidence’ through a virtual press conference on Saturday. The results came up during the fifth phase of the survey.

Among South Asian countries, Bangladesh announced the highest amount of stimulus for economic recovery during the pandemic. SANEM thinks that the funds were not properly utilised.

Among the surveyed businesses, 79 per cent did not receive any funds, while 29 per cent brought allegations of bribery against officials, 47 per cent did not answer the questions while 24 per cent said they did not face such situation.

Among the 79 per cent, 65 per cent applied for the funds but did not get any while 14 per cent said they did not know about the stimulus packages.

Only 21 per cent among the surveyed entities got the funds, according to the survey. Fifty-two per cent of these businesses are from the readymade garment sector.

The survey suggests that smaller entities are getting lesser fund compared to the bigger enterprises. Only 9 per cent of entities received stimulus funds are from SMEs, 24 per cent medium enterprises while 45 per cent large enterprises.

After analysing the survey findings, SANEM said that 79 per cent of entities reported lengthy process in getting the money.

Seventy-two per cent said they received the fund through banks but 50 per cent of them complained of complicated process. Apart from this, 36 per cent entities think the money they received was insufficient.

When asked about vaccination, 60 per cent owners of these entities and their representatives said they took at least one dose of Covid-19 vaccine. Among the workers, 25.5 per cent said they were vaccinated while 75 per cent were yet to take the first dose.

Among RMG workers, 19 per cent have so far received the first dose compared to over 50 per cent in financial and pharmacy sectors. Less than 30 per cent workers from other sectors have so far been jabbed, according to the report. The rate is even lower for workers from the SME sector, especially those from outside the capital.

SANEM said the Covid situation was bad in April-June period, compared to the same quarter last year. Confidence of traders fell to 41.39 per cent during this period but rose to 89.78 in July-September. The rate was 58 per cent during January-March this year.

Among the traders, 64 per cent think that the economic recovery has been poor while 27 per cent termed it moderate. Only nine per cent traders think the recovery has been strong.

In the January-March quarter, 67 per cent traders reported weak recovery, while 31 per cent said the recovery was moderate and 2 per cent said it was strong.

Still, 73 per cent businesses from the SME sector consider the recovery to be weak.

Additionally, entities under RMG, textile, leather, pharmacy, food, restaurant and financial sectors said the recovery has been good in the current July-September quarter. Those lagging behind in recovery are light engineering, wholesale, retail, transport, ICT, real-estate and services sectors.

Among the participants, 76 per cent considered remittance playing a strong role in the economic recovery, 69 per cent credited goods and services, 65 per cent vaccination, and 61 per cent private sector bank loan.

“The economic recovery pace is very slow and it deteriorated in April-June quarter,” SANEM Executive Director Selim Raihan said, adding that the rate is much better compared to last year.

He said that it is very unlikely that the situation would get better soon and emphasised coming up with new tactics to cope with the new situation. There’s no one-size-fits-all solution.

“A course of action involving private and public stakeholders must be formulated for economic recovery,” he said.

Raihan said the government should pay attention to two measures – vaccination and stimulus packages .

“Over 70 per cent workers have not been vaccinated yet,” he noted, “while the disbursement of stimulus packages has not been efficient either. Alongside this, there has been no sectoral evaluation on damage done by the pandemic.”