Experts have urged the government to form an advisory committee to come up with a proper action plan for strengthening the post-coronavirus economic regime in the country.
They said Bangladesh will face a big challenge if proper plan is not taken right now. It may take two years to go back to the fast growth state.
Economists said they fear a rise in budget deficit in the aftermath of the pandemic and huge drops in revenue collection, export earnings and remittance inflow.
Laying emphasis on maintaining uninterrupted supply of agricultural goods amid the shutdown, the experts also urged the government to focus on saving lives and livelihoods as millions of people have lost their jobs.
Talking to UNB, former caretaker government finance adviser Dr AB Mirza Azizul Islam said the coronavirus has created a big challenge for Bangladesh economy.
“Proper action plan is needed right now. The government must first ensure preventing deaths from hunger during this crisis,” he said.
The noted economist said the government has to increase allocations to social safety net and give emphasis on food production to tackle the circumstance.
“If the situation of COVID-19 is stable than the government has to lay emphasis on sectors that were driving forces of the country for the last one decade,” Dr Islam suggested.
The economist said Bangladesh is now connected globally. So, the government should think about improving the international indicators.
Dr Mohammad Mahfuz Kabir, research director at Bangladesh Institute of International and Strategic Studies (BIISS), said the country cannot stand economically in post-coronavirus world if all sectors are not given emphasis.
“We’ve to lay emphasis on agriculture sector to survive at first. The government must keep supply and distribution of all agricultural goods uninterrupted,” he said.
He underscored the need for interest-free agricultural loans. “The government should distribute the stimulus fund quickly and properly so that there’s no vast impact here.”
The researcher said the government has to form an advisory committee to take proper action plan to overcome the crisis moment.
“We’ve to take a proper plan scrutinising global markets for better export earnings. If we fail to do so, then Vietnam will grab our export markets. Because, Vietnam is our main competitor and they’re now doing well. So, we’ve to give emphasis on RMG sector,” he added.
Dr Mahfuz said Bangladesh’s export markets like the USA and the EU are now vulnerable following coronavirus pandemic. “Nobody knows when the markets will be stable.”
“The demand for new products will increase in global markets during the coronavirus crisis. These markets must be tapped to overcome the negative trend of export earnings. We’ve to look for new markets which are not much affected by coronavirus outbreak,” the economist added.
Executive Director of South Asian Network on Economic Modeling (SANEM) Dr Selim Raihan said the government needs to immediately work out a well-thought recovery plan and action programmes to tackle the toxic economic impact of the virus.
“We can’t formulate our policies as usual. The country will see a big budget deficit due to coronavirus outbreak. I propose a two-year recovery plan instead of the 8th Five Year Plan to overcome the existing economic situation,” he said.
Raihan said the plan is aimed at taking the economy back to the December 2019 state and proposes delaying the beginning of the 8th Five Year Plan by two years to 2022 and re-writing it since a large part of it seems irrelevant at this stage.
The SANEM Executive Director said the Tk 72,750 crore stimulus packages should be distributed properly in affected sectors.
“The packages, which are more than three percent of our GDP, may increase. The success of the packages will depend largely on the management,” he added.
Dr Raihan said all unnecessary expenditures of the government need to be suspended or cancelled immediately. The money saved from it must be utilised for the stimulus package.
“The second is to borrow from international organizations like the World Bank and the IMF. We know that Bangladesh, as per World Bank's classification, has graduated from low-income to lower-middle income country status, and due to this Bangladesh has lost the privilege of accessing loans from the World Bank and IMF at a lower interest rate,” he said.
But in such a crisis time, Bangladesh must try to negotiate with the World Bank and the IMF to find out how to get loans at low interest and easy terms. “We don’t want any stringent conditions from the World Bank and IMF now,” he added.
He suggested undertaking 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 ease monetary policy measures; suspend LDC graduation target by at least three more years; raise voice at the global level to push the SDG target year from 2030 to 2035.
“Bangladesh may need around two years to come back to its former position overcoming the crisis of coronavirus,” Dr Selim Raihan told UNB.