The Business Post
Tuesday, January 26, 2021

Home Opinion & Analysis

Mahfuzur Rahman
Mahfuzur Rahman
Former Executive Director of Bangladesh Bank
16 May 2020 16:14:41

Next budget should be humane

Next budget should be humane
Business Post Photo

Covid-19 pandemic has put the world through an unprecedented catastrophe, revealing the crisis of healthcare, food, and so forth. Being stuck at home in quarantine, people are desperately waiting for the world to rid itself of this crisis. A clear sign when the situation will return to normalcy is still far-fetched, suggesting that a fight against this invisible foe will continue till it completely gone, and the next budget should be prepared with this in mind.

When Covid-19 struck the country, the government’s priority was “save lives first”; enforced lockdown to curb its spread, ensured food supply for the poor, and declared fiscal stimulus for various sectors hard-hit by the pandemic. We most probably have overcome the initial shock, but are yet at the stage of tackling the virus. Now is the time to think of what the next course of action will be and how to strengthen our economy once more.

We recognise food, clothing, shelter, education and medical care as peoples’ fundamental rights. Bangladesh is now self-sufficient in food. The season has seen a bumper Boro yield, the farmers have quite successfully harvested paddy as people of different walks of life had joined them in the successful completion of their work, highlighting our culture of working together during disasters, a characteristic we have been experiencing since the War of Liberation. Many pieces of evidence of our people working together very closely during the flood, cyclone and other natural disasters are recorded. Amid the threat of impending flash floods during the harvesting season, people from all walks of life came forward to help farmers harvest Boro paddy. Fancy and expensive food on our table is not what the people need, but simple rice, alu vorta (mashed potatoes), and dal would suffice.

Clothing and accommodation are not issues, however, the absence of medical care is our main problem. The rich and people high on the socio-economic ladder go abroad for treatment, and when sick, are flown to Singapore and Bangkok on air ambulances, to ensure better treatment. But the Covid-19 pandemic has awakened us to stark reality – we have come to terms that treatment facilities in a foreign land will not keep us safe, while our health system is weak.

Therefore, the upcoming 2020-21 fiscal year budget must give priority and due importance in developing the country’s healthcare system. It is imperative to improve healthcare quality at government hospitals and make them corruption-free. The government hospital services are of such low quality, beyond the imagination of policy makers. Private hospitals and clinics cannot be ruled out, as relevant rules and regulations should be set for these institutions, and following the rules must be made mandatory for all healthcare facilities.

The government could form an independent commission or a commission under the health ministry to supervise these activities. It has become common knowledge that doctors prescribe unnecessary medical tests for patients in exchange for commissions from diagnostic centres. The health sector must be rescued from this state.  This can be done if physicians are ensured of a decent honorarium for their services. When people are assured of better healthcare facilities, under whatever circumstances, they will devote themselves completely to work with peace of mind and contribute towards the country’s development. 

A look at the education sector – the pandemic has brought all educational activities to be suspended.  Although some institutions are conducting online classes, these cannot replace real-life classroom experiences. The good thing about online classes is that students are at least in touch with their lessons. A few departments of Dhaka University (DU), criminology department, in particular, desired to continue educational activities virtually; but was halted by the university authorities explaining that it did not suit all students. The DU vice-chancellor cited that many students had moved to their respective villages where internet facilities were not widely available.  

At present, I believe, mobile networks are available even in the country’s remotest areas. It is quite understandable that the villages may not have broadband internet and Wi-Fi facilities, but students continue online classes using mobile internet.  A point to be noted is – do all students have smartphones or the ability to buy mobile internet packages?

The upcoming budget can allocate a certain amount to the education sector, allowing universities to provide digital devices to students to cope with online academic activities.  This brings us to mobile internet package prices. The lifestyle of people from different walks of life is changing and shortly everyone will be depending on the internet to complete most of our work. It is suggested that the existing price of internet package be slashed by a half and continue for at least three years. The government can provide subsidy in this regard.

Further, for students’ smooth participation in online classes, a few gigabytes of internet, free of cost, could be provided to their mobile devices registered under colleges and universities. The crux of the matter is that education has to be facilitated, come what may.

Existing financial activities must be continued and people in need should be given aid in cash. The government has already decided to give five million families Tk2,500 each through mobile banking channels. The process has to be made easy so that small entrepreneurs can access loans at a low interest rate.

Bangladesh Bank (BB) issued directives at different times asking banks to provide loans to small and medium enterprises (SME) on easy terms, but these small entrepreneurs have been deprived of the facility due to the negative mind-set of bank authorities. Many believe this happened as there was little or no supervision from the central bank. If we want to move the economy forward in the post-pandemic period, providing loan facilities to these small entrepreneurs must be ensured. If BB sets loan disbursement targets and follows them regularly, the whole process will accelerate the country’s economic development --and people’s purchase and consumption capacities will increase.

Tax and value-added tax are the government’s biggest sources of income. But the government should not solely depend on them, as revenue collection from these sectors will significantly decrease this time, leaving the government with no choice, but to borrow money. It will be wise if the government then lessens the dependence on banks and could think of a ‘Corona Bond’. It would also be comparatively better if the government secures more loans from donor agencies.

Bangladesh’s reputation as a loan-receiving country is good among the donor agencies, as it has not missed any loan repayment deadline since its independence. If the government secures loans from international lending agencies, it will help to keep the country’s inflation in check. Besides Bangladeshis living abroad can be encouraged to invest in foreign currency bonds here. In the past, this initiative had brought some good results. Bangladesh should focus on building strong diplomatic relations with countries that usually host a large number of Bangladesh migrant workers so that these countries would call back the migrant returnees for work.

To increase the flow of funds, the government and Bangladesh Bank can introduce more re-financing schemes, and if the government ensures credit guarantee schemes for small entrepreneurs and farmers, it will bring in good results. The budget has also to ensure that small businesses and agriculture are not affected and that farmers get a proper value for their produce.  

Oil prices in the international market have come down, lowering the government’s oil-importing cost. People demand a decrease in the oil price in the local market. And since the government will be spending less on importing oil, the surplus money can be invested in health, education and poverty alleviation sectors.

The government has to make special arrangements for Bangladeshi migrant workers, who either have returned from middle-east or are expected to come back soon. Else these returnees will spend their savings after their return and will be helpless once these savings are exhausted. The government can announce a special package for these returnees allowing them to be engaged in business and other innovative areas of work. 

Incidents of misappropriation of relief materials meant for the poor were reported. Corruption in relief distribution is by no means acceptable. When people see that distributors and influential people embezzle the government relief materials during periods of crisis, it weakens them psychologically. The government must increase its monitoring activities, take stern action against culprits and ensure exemplary punishment for them.

Last but not the least, people belonging to different professions need training. Therefore a significant allocation in the budget must be allowed for research and training to ensure a better Bangladesh.


Mahfuzur Rahman is a former executive director of Bangladesh Bank.