Home ›› 06 Jan 2022 ›› Opinion
Wuhan, capital city of Hubei province in China came under much discussion because of it being the originating place of Covid-19. Coronavirus began it vicious journey from the end of the 2019 and spread worldwide like wildfire. A good number of Wuhan people breathed their last within a very short time of being affected. But, the reason of their deaths could not be identified at first. In view of a growing number of dead people, the researchers were able to detect the virus finally. The South Asian nation, Bangladesh faced the virus in the first week of March, 2020. The virus killed millions of people across the world and left behind many more in critical
conditions.
If truth be said, the world was not prepared at all for fighting this virus. As a result of the sudden appearance of the virus, the business activities were disrupted in the twinkling of an eye. The situation did not allow random movement of working class people. Of course, the country to country communication was cut off by suspending air transport. The world’s beach towns during pandemic situation turned into deserts. The eateries turned down customers’ requests. However, to contain the virus, government-level initiatives worked better. When Bangladesh began to experience steep economic growth, the outbreak of coronavirus set the running growth down. At the same time, socioeconomic impact was largely adverse. Among the indirect impact of the pandemic were increasing number of child marriages and violence against women.
Just ahead of being hit hard by coronavirus, among South Asian economies, Bangladesh’ GDP growth rate was really admirable. GDP growth rate during 2018-19 FY was recorded at 8.15 per cent, highest in the South Asia region. For the last couple of years, the world leaders had been expressing optimism about Bangladesh’s economy. With a total of $ 355 billion GDP size, Bangladesh has, in the meantime, kicked off its journey in the aim of grabbing the status of a developed country in 2041. What is worrying is that the Covid-19 outbreak has abruptly stifled the rate of growth. It is very difficult to predict when the Corona affected economy will bounce back to pre-Covid-19 levels.
With a view to reviving the pandemic-ravaged Bangladesh economy, the government did not make any delay in announcing a number of stimulus packages. The stimulus packages was worth around 4.4 per cent of the country’s Gross Domestic Product (GDP). The central bank of Bangladesh gave lots policy supports from time to time in order to keep international business afloat. Especially CMSMEs, agricultural and export-oriented sectors were given due importance in the stimulus packages. Besides, the vast number of people working in informal sectors, were brought under these packages. The objective of the launching stimulus packages was to keep the wheel of economy running like before. But, the government’s plan to save people’s lives and livelihoods had been shattered due to improper distribution of stimulus packages.
According to published reports of media outlets, the real needy people or businesses failed to receive facilities announced by the government. The central bank was not efficient in finding out actual borrowers. It is important to note that the large borrowers managed to snatch bank money within hours of placing export orders. Most manufacturers that are related to CMSMEs sector remained out of stimulus packages. A study done by this writer said that the information about state-provided facilities did not reach small-scale borrowers. Ultimately, the people, who were linked with manufacturing, were waiting for virus-free climate in Bangladesh finding no alternative ways to survive. A newspaper reported that manufacturing growth has declined sharply due to the pandemic. The report said that the average growth in manufacturing was more than 10 per cent from 2010 to 2019 and was 14.2 per cent in 2019, registering a mere 5.84 per cent in 2019–20.
As a result of growing unemployment rate, the number of new poor is on the rise. The Bangladesh Institute of Labour Studies (BILS) and Centre for Policy Dialogue (CPD) carried out timely study titled “Impact of Covid-19 on the labour market: Policy proposals for trade union on employment, gender and social security for sustainable recovery”. The study revealed that about 3 per cent of the country’s labour force was jobless creating an estimated around 16.38 million new poor. Around 37 per cent of wages was also decreased. Dhaka-based Power and Participation Research Centre (PPRC) & BRAC Institute Governance and Development (BIGD) in their study revealed that the number of new poor people in the country was registered as 2 crore 45 lakh due to the first wave of the coronavirus.
Besides, households and individual earnings decreased markedly due to the pandemic. A study said that around 13 per cent of the total population became unemployed in the informal sector. According to another study, the months between April and October of 2020 saw roughly 77 per cent of households in Bangladesh lose a portion of their average monthly income, with approximately 34 per cent having at least one member lose their job. In response to the ramifications of the pandemic, the impacted families consumed their savings and borrowed heavily, leading to a decrease of 62 per cent in their average monthly savings, as well as an increase in debt by 31 per cent. According to Dhaka University’s Institute of Health Economics, Bangladesh economy is losing Tk 3,300 crore per day from its service and agriculture sectors during the nationwide shutdown.
Following the Covid-19 pandemic, the country’s Ready Made Garment (RMG) sector was in great trouble for not being able to make shipment within the stipulated time. Nevertheless, export orders worth million of dollars were cancelled by the world’s branded retailers at the beginning of the pandemic. The organizations concerned claimed that during 2019-20 FY, export orders worth Tk 600 crore were dropped due to the Corona pandemic. In view of this grim scenario in the export-oriented sectors, the government somehow managed to keep production running amidst protests by a section of people. At last, the government’s strong decisions helped rise export earnings in the pandemic year. A business daily reported that Bangladesh has been able to achieve 14.12 export growths and export earnings of $ 45.37 billion in the 2020-21 fiscal years. It is true that inflow of foreign direct investment in Bangladesh decreased alarmingly. A report by the United Nations Conference on Trade and Development (UNCTAD) identified a 42 per cent fall in the global FDI to an estimated USD 859 billion in 2020 from USD 1.5 trillion in 2019. According to media outlet sources, the net inflow of foreign direct investment (FDI) in Bangladesh declined by 39 per cent in the past fiscal year (FY20) over the previous one (FY19). Bangladesh economy had been facing income inequality problem for a long time. The presence of Coronavirus helps widen the problem more. Income inequality is measured with Gini coefficient in economy. Before lockdown the Gini coefficient was recorded as 0.482. After imposing a 66-day lockdown up to 31 May, 2020, the Gini coefficient stood at 0.635 a daily reported.
It is true that foreign remittance next to export earnings has become a matter of pride. Amidst virus attack, inflow of foreign remittance was noticed. Currently, 10 million expatriate workers are working abroad aiming to change their financial fate. When the virus started to attack, around 0.4 million workers lost their jobs, a study pointed out. Nevertheless, many expatriates returned home finding no other alternative avenues to survive abroad. Wage theft cases were also detected. Despite economic disruptions during the pandemic period, foreign exchange reserve stood close to $ 50 billion mark thanks to Bangladeshi-born expatriates. Such type of achievement made Bangladesh economy proud. Amid the pandemic situation, Bangladesh’s trying to show progress in SDGs goals was admirable. SDG award came recently for attaining or developing most targets set by the United Nations.
The writer is an economic affairs analyst. He can be contacted at mazadul1985@gmail.com
