Uncertainty looms large over the invitation of a planned international bidding for hydrocarbon exploration in the country’s gas blocks due to the coronavirus impact on the global economy.
According to official sources, state-owned Petrobangla had planned to announce the bidding round on March 17 marking the birth centenary of Father of the Nation Bangabandhu Sheikh Mujibur Rahman.
“But the global coronavirus pandemic forced Petrobangla to shelve the plan and the government also suspended birth centenary programmes,” a senior Petrobangla official told UNB.
He said the plan to invite international bidding on March 17 with fixing a schedule for international oil companies (IOCs) to submit proposals between October 2020 and March 2021.
“We had laid out the plan keeping in mind to complete the evaluation of offers and sign contracts with selected companies between March-October 2021 so that they can start exploration in November that year,” said Shahnewaz Parvez, General Manager (Contract) of Petrobangla.
Earlier, the government amended the model production sharing contract (PSC) for both offshore and onshore gas blocks to pave the way for inviting international bidding in March 2020.
Through those amendments, the IOCs were given more incentives to attract them to invest in the country for exploration of oil and gas.
Petrobangla sources said the incentives include allowing the IOCs to export their share of gas from deep sea blocks to any third party outside the country with first right of refusal by Petrobangla and local companies.
Secondly, the price of gas was increased when it comes to purchase by Petrobangla as the government entity, Petrobangla officials said.
They said the country has now 48 blocks of which 26 are located in offshore areas and 22 in onshore areas.
Of these, 21 offshore blocks were planned for international bidding as PSC remained active in five blocks while 18 onshore blocks are ready for bidding as four PSC is active in four such blocks.
Petrobangla officials said with the coronavirus pandemic the international bidding has become uncertain as the prices of oil and gas have come down to their lowest in 30 years.
“Most of the IOCs will go for cost-cutting measures to survive the recession,” said another top official of Petrobangla adding that in such a situation no IOCs will be interested to invest in hydrocarbon exploration business.
Echoing the same concerns, eminent energy expert and Professor of Chemical Engineering Department of BUET Dr Ijaz Hossain said it is very difficult to say when it will be possible to overcome the situation.
“It may take years for the IOCs to rejuvenate themselves in the exploration activities,” he said.
Energy experts said it is a common phenomenon that when oil price drops in the global market, the IOCs feel discouraged to go for investing in exploration works.
Meanwhile, Bangladesh settled its dispute with neighbouring Myanmar and India over the maritime boundary almost eight years ago. It has had no success in exploration of oil and gas in its offshore areas located within its maritime boundary, said an energy expert.
Amid the nosedive in revenue collection, export earnings and remittance inflow, economists fear a burgeoning of the budget deficit in the aftermath of the pandemic and the massive steps taken to tackle it.
Due to halt in the economic activity with the closure of most business establishments and shops as part of ‘social distancing’, they also fear that the Bangladesh economy could take a significant hit unless proper planning is undertaken for a quick recovery.
The economists said the revenue mobilisation will fall significantly here due to slow business activities and the government should support small and big companies so that they can return to optimal performance smoothly.
According to sources at the National Board of Revenue (NBR), revenue collection was already Tk 45,000 crore short of the target set in the budget during the first eight months of the current fiscal year (till the end of February) at Tk 1,44,925 crore against the target of Tk 1,90,000 crore for the period.
The experts feared that the deficit will go up further in the future due to the stagnation of the overall economic activity with the advent of the pandemic.
UNB File Photo
Contacted former caretaker government finance adviser Dr AB Mirza Azizul Islam told UNB that there is a deficit every year, which is kept within 5 percent of the budget. In the circumstances of Coronavirus pandemic, the proportion of deficit will swell this year.
“We see around 5 percent deficit in budget every year. The amount of deficit will swell to around 6-6.5 percent this year following the Coronavirus impact. Because, the revenue collection will be less but expenditure will increase vastly due to the impact,” he also said.
Dr Azizul Islam said corporate tax will fall short of the expectation of the government since factories have been shut following the virus. In this situation, huge workers will be laid off as well. Besides, the government has to spend more money in health sector and towards the social safety net for those losing out.
“The government should take such steps so that companies can begin production properly, otherwise there will be a fallout in the economy here. So, we’ve to follow the developed countries to make the next budget to recover from the problems caused by Coronavirus,” the noted economist added.
Dr Ahsan H Mansur, executive director at the Policy Research Institute of Bangladesh (PRI), told UNB that it is now very important to reconstruct the country’s real economy and get back to work, rather than worry too much over the budget deficit.
“Bangladesh’s real economy is getting devastated due to the coronavirus outbreak. So, it has to be recovered at first. And workers should get back jobs. At first, we have to survive rather than thinking of deficit. All economic sectors will break down if the real economy can’t stand properly,” he added.
Dr Ahsan said a massive budget shortfall would be seen this year following the coronavirus pandemic.
“The government set a target of 45 percent tax collection but only 7 percent was collected up to December. In the current rough situation, it’ll worsen. The budget shortfall will be enormous due to the weakness of revenue collection,” he added.
The economist said financial intervention is needed now. The developed countries are now doing it as well. “The government should support Small and Medium Enterprises (SMEs) as well as other companies so that these can recover their production capacity within a short time.”
Dr Ahsan added that it is now clear the country’s health sector is very poor. Around 0.7 percent of budget is spent on the health sector, which is lower compared to other Asian countries. “So, the sector should be emphasised more.”
Replying to a question, he said there is no excess liquidity in banks for the government to borrow from financial institutions to meet the shortfall.
Executive Director of South Asian Network on Economic Modeling (SANEM) Dr Selim Raihan told UNB the country will see a big budget deficit due to coronavirus outbreak.
“Bangladesh maintains around 5 percent national budget shortfall every year. It’ll rise to 6-7 percent this year following the coronavirus. Now, the government has to take a proper plan to recover it,” he said.
Dr Raihan, a professor of Economics department at Dhaka University, said the economy of Bangladesh may witness a major fallout due to the long holiday in near future.
“To overcome the existing economic situation, I propose a 2-year Recovery Plan for Bangladesh instead of the 8th Five Year Plan. We can chalk out 8 points such as --The plan will aim at taking the economy back to the December 2019 state, delay the beginning of the 8th Five Year Plan by 2 years to 2022, the 8th Plan needs to be re-written. A large part it seems to be irrelevant at this stage,” he added.
The economist also advised fiscal stimulus packages and monetary policies to support almost all industries, including the RMG, other export-oriented and domestic-market oriented industries and SMEs.
“At this moment, the focus is only on the RMG, which is not helpful at all. Devise and extend social protection programmes for a vast number of marginalised, near-marginalised and a large section of suddenly vulnerable population,” he suggested.
“Undertake some ‘politically feasible’ policy reforms in the areas of trade, tax, banking sectors; explore ways for generating resources (domestic and external) to support the fiscal stimulus and eased monetary policy measures; Suspend the LDC graduation target by at least 3 more years; raise the voice at the global level to push the SDG target year from 2030 to 2035,” he also said.
The government placed a Tk 5,23,190 crore largest-ever budget for the 2019-20 fiscal with a focus on developing communications infrastructure and human resources and achieving 8.2 percent GDP growth last June.
However, the overall budget deficit was kept Tk 1,45,380 crore, which is 5 percent of GDP like the previous year. The government also set a target that Tk 68,016 crore will come from external sources and Tk. 77,363 crore from domestic sources in financing deficit.
In the budget, the total revenue collection has been estimated at Tk 3,77,810 crore where the NBR will contribute a Tk 3,25,660 crore tax revenue while non-NBR sources have been estimated at Tk 14,500 crore.
Thousands of readymade garment (RMG) factory workers started heading back to Dhaka from northern and southern districts on Saturday to save their jobs, ignoring risks to their lives and a potential coronavirus outbreak.
The government has shutdown educational institutions, cut off mass transports and urged people to stay indoors to contain the spread of the virus. But its efforts will face a tough challenge as thousands start returning to the capital to attend work.
Bangladesh’s labour-intensive RMG sector is particularly vulnerable to coronavirus outbreak which could seriously hamstring operations and push down the country’s export earnings, most of which come from here.
Health work experts have urged the government to pay attention to the sector, the second largest exporter of goods after China, to prevent a possible outbreak here since people work in close proximity to each other.
People who are returning are mostly RMG workers and they say they are faced with the difficult choice of either staying home and losing jobs or returning to work braving coronavirus.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) on Thursday said buyers have so far cancelled orders worth $3 billion following the coronavirus outbreak, affecting 1,092 factories and approximately 2.16 million workers.
In Munshiganj, hundreds of people were seen crossing the Padma River by ferry and speed boats defying the risk of coronavirus spread.
Asked about how they came to the ferry terminal, most of them said they came by microbus, motorcycle, human haulers and covered vans as public transports were suspended.
Bangladesh Army set up a check post at Louhajang on Dhaka-Mawa Highway and sending back all kinds of vehicles.
People were seen using the Louhajang-Tongibari-Munshiganj-Narayanganj route for the restriction on Dhaka-Mawa Highway.
Read also: 2 more die from coronavirus in Bangladesh
GM Ashraful Kabir, in-charge of Mawa River Police Outpost, said people started returning to the capital as some garment factories have opened.
In Gazipur, defying government’s instruction of staying home and avoiding mass gatherings, a huge number of people entered Gazipur and the capital from northern districts.
Visiting Joinabazar on Dhaka-Mymensingh Highway, UNB’s Gazipur correspondent saw hundreds of garment workers on pick-up vans, trucks and auto-rickshaws trying to enter the city.
When they were obstructed by highway police, they got down from the vehicles and started walking.
Workers said they came a day earlier as their factories will open on Sunday and they have been told to attend office on time.
Authorities of the factories also told them that if anyone fails to join the workplace in time, that worker might be sacked.
UNB Manikganj Correspondent reported that thousands of people gathered at Paturia Ferry Terminal amid the countrywide lockdown to return to the capital.
Most of them came by trucks, pick-up vans, microbuses while some were seen walking.
Thousands of people were seen waiting at Uthali, Aricha and Paturia Ferry Terminal bus stands for buses while the administration at the check post was forlorn in the midst of huge crowd.
Manikganj Deputy Commissioner SM Ferdous said people started crossing the river since the morning and most of them are garment workers.
They have been entering the capital for works, the DC said, adding that they are not listening to the directions of the administration.
Talking to Dhaka-bound people in Manikganj, UNB Correspondent found that garment factories will open on Sunday and some were not closed during the general holidays.
The workers said they were not paid last month and if they fail to g to work, then they will not get their salaries.
UNB’s Sherpur Correspondent reported that the situation was the same in the district.
Abdullah Al Mamun, officer-in-charge of Sherpur Sadar Police Station, said they are trying to persuade the workers to return home and stay indoors but nothing seems to work.
Law enforcers, members of Bangladesh Army, and local administration working in the area but nothing could stop the workers’ flow to reach their workplace to save livelihood.
Rabiul Islam, a resident of Vayadanga village under Sreebodri upazila, said he works at M Sweater Factory in Gazipur which will open on Sunday.
“I must join the work otherwise I’ll lose my job,” he said.
What’s the current situation?
The government on Wednesday extended the general holidays till April 11 to prevent transmission of COVID-19.
Bangladesh on Saturday reported nine new coronavirus cases and two deaths. So far, the country has confirmed 70 cases and eight deaths but a number of those affected have already recovered.
The global death toll from coronavirus jumped to 59,203 on Saturday.
COVID-19 has so far infected 1,117,918 people around the world, according to Worldometer.
Farmers in Jashore, a district famous for its huge vegetable production, are now in great trouble as the prices of their produces have declined sharply for lack of marketing following the virtual lockdown amid the outbreak of coronavirus in the country.
Visiting Satmail Bazar in Sharsha upazila, the UNB correspondent found hundreds of vegetables vendors helplessly looking for buyers.
This market is known as a hub of various vegetables and these go to different parts of the country, including the capital.
Pointed gourd was found selling at Tk 25 per kg, while radish at Tk 18, bitter gourd at Tk 30, eggplant at Tk 8, okra at Tk 10, bean at Tk 15 per kg, gourd at Tk 10 and cabbage at Tk 6 per piece at the market.
Ali Hossain, a farmer of Natuapara village in Sadar upazila, told UNB that he sold pointed gourd at Tk 35 to Tk 40 per kg last year during this period.
This year, Ali said, he is selling it at Tk 25 per kg only and he will not get even the production cost if he has to sell it at such a rate, he added.
Shukur Ali, from Boro Hoibatpur village, also expressed disappointment after selling cabbage at Tk 6 per piece. “Profit is a dream now because the selling price won’t even cover the fertilizer and insecticide costs,” he bemoaned.
Besides, wholesalers said they are not getting the fair prices vegetables in the capital and other districts for lack of buyers as many people left Dhaka due to general holidays.
Anwar Hossain, a wholesaler of Jhenidah’s Kaliganj upazila, told UNB that he had to sell pointed gourd at Tk 25 per kg after buying it at Tk 32.
Abdur Rahman, a local wholesaler, said transportation cost has also increased for lack of vehicles.
Earlier, he hired a truck at Tk 12,000 to Tk 14,000 for transportation of vegetables to Dhaka but now truck owners are demanding Tk 18,000.
Jakir Hossain, a deputy assistant agriculture officer at Churamonkati in Jashore, said now farmers are not getting fare prices due to bumper production on one hand and lack of buyers on the other.
Dr Akhtaruzzaman, a deputy director at Department of Agricultural Extension, Jashore, said farmers cultivate vegetables throughout the year in the district.
He said they produce around 8,000 mts of vegetables in the district on average every year.
Recently, the district has ranked first in producing vegetables but farmers are not getting fare prices due to the coronavirus outbreak, he added.
The government on Wednesday extended holidays till April 11 to prevent the transmission of COVID-19. Earlier, a general 10-day holiday was declared from March 26 to April 4. Besides, the movement of buses, trains and vessels has been suspended to curb the spread of the virus.
Bangladesh has so far reported six deaths from coronavirus while 61 confirmed cases.
Although Dhaka city-dwellers have been complaining that they are suffering a lot due to increase in culex mosquitoes, the authorities concerned of both the Dhaka North City Corporation (DNCC) and Dhaka South City Corporation (DSCC) claimed that their employees are working up to the maximum of their abilities to kill adult mosquitoes.
City-dwellers alleged that mosquitoes both at night and day are now getting intolerable. Anti-mosquito drives by both city corporations have become very slow after the last city corporation elections in February 1 this year, they said.
Md Nizam Uddin,40, a shop owner living at Adarshanagar of Mirpur-11, said despite shutting all the windows and doors he cannot stay at home as the number of mosquitoes is unlimited. “We have to use two mosquito coils in the evening every day. We have to use mosquito coil at noon too,” he said.
Replying to a question, he said the DNCC employees were seen very active before the last election. “I did not see anyone spray anti-mosquito medicine for the last two weeks,” he said.
He feared the proliferation of Aedes mosquitoes, the carriers of dengue, this year again like last year if the corporation does not take initiatives immediately.
Moshtaque Ahmed, a resident of Middle Basabo under the DSCC, said mosquito infestation has increased greatly compared to several weeks ago. We are staying inside our flat all day and night closing doors and windows using anti-mosquito spray.
UNB File Photo
Replying to a question, he also said he has not seen any employee of the corporation spraying anti-mosquito aerosol for the last one month in their locality.
He also said, " I fear the outbreak of dengue again this year which will be very much unfortunate for the city dwellers as the possibility of coronavirus outbreak looms."
Contacted, Dr Manzur Chowdhury, an entomologist and former president of Geological Society of Bangladesh, said dirty water is stranded on city drains as most of them are uncovered. Drains and canals, which are organically polluted, are great breeding grounds for culex mosquitoes. As those are not cleaned properly, the intensity of culex mosquito is very high. "The breeding of culex mosquito is very high in those areas--drain and stranded canals where organic pollution is high," he said.
Replying to a question, the entomologist said around 300 dengue cases were identified in January to March this, while the figure was only 73 last year. It indicates that dengue may hit again this year, he said.
"So, the authorities have to take immediate initiative to destroy the breeding grounds of aedes mosquito. Otherwise, it would become intolerable, Dr Manzur said.
DSCC Chief Health Officer Brigadier General Dr Sharif Ahmed said though the employees of the corporation are fearful of possible infection of coronavirus, they are spraying disinfectant water on the streets to prevent coronavirus outbreak alongside insecticide on culex and Aedes mosquito breeding grounds giving maximum efforts.
“We have already identified the hotspots of Aedes mosquitoes breeding grounds in February and in the meantime we have completed two crash programmes to destroy the sources of Aedes mosquito. We also declared wards No 5,6,11, 17,37 and 42 as vulnerable ones,” he added.
"We are trying to give relief to our city-dwellers from both the outbreak of culex and dengue working with maximum ability," he said.
Contacted, DNCC Panel Mayor Md Zamal Mostafa denied the allegation of slow work in spraying adulticide and larvicide to destroy both Aedes and culex mosquitoes.
“We are fighting against Aedes and Culex mosquitoes. In the meantime, coronavirus has appeared as a curse. So, we are continuing to spray adulticide and larvicide on the breeding grounds alongside anti-infect water on the city streets,” he said.
Replying to a question, the DNCC Panel Mayor said they have sufficient stocks of adulticide, larvicide, Malaria B oil and other pesticides to destroy mosquitoes and their breeding grounds.
“We have previous experience to fight against Aedes mosquitoes and we have already started our work accordingly to prevent the outbreak of dengue this year,” he added.