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Bangladesh economy proved resilience amid COVID-19 pandemic: Economists
DHAKA, Dec 30, 2020 (BSS) – Bangladesh embraces the New Year visibly with a sense of contentment as macroeconomic indicators suggesting the country’s higher resilience than its neighbours in facing the COVID-19 pandemic, setting a positive course for 2021.
Economists and policymakers found Bangladesh’s economic activities to have recovered more strongly than expected while the statistical data showed foreign currency reserves, export earnings and agriculture yields kept the nation’s economic stability, paving ways for a buoyant march forward in the coming year.
Most analysts and financial watchdogs said it took Bangladesh little time to overcome the initial pandemic shock while they attributed the rebounding to quick and pragmatic steps of the government led by Prime Minister Sheikh Hasina.
Days after the detection of first coronavirus cases in the country, Prime Minister Sheikh Hasina announced stimulus package of Taka 1.21 lakh crore in two phases, which they saw as a major ‘catalyst’ to infuse dynamism into the COVID-gripped economy.
Bangladesh has done well in all the major macroeconomic indicators in the outgoing calendar year compared to other countries of the world especially in this region although the global economies have been reeling from the shock of the novel coronavirus (COVID-19) pandemic.
The country has been able to tackle successfully the adverse impact of the pandemic due to the farsighted, courageous and timely steps from Prime Minister Sheikh Hasina, said policy makers, economists and business leaders.
Seeking comments on the economic performances of the country in 2020, Planning Minister MA Mannan told BSS that considering the global and regional situation in the wake of COVID-19 pandemic, the economy of Bangladesh fared much better compared to the other neighboring countries in the year 2020.
He said that lending agencies like the World Bank, IMF and ADB praised highly about the country’s economic performances in the outgoing calendar year.
Mentioning that Bangladesh has been able to attain 5.24 percent growth in the last fiscal year (FY20) braving the COVID-19 pandemic, Mannan said the growth at the end of current fiscal year (FY21) would reach not below 7 percent, adding, “If such thing happens, then it will be a fantastic achievement,”
Asked about the impact of COVID-19 on the economy, the planning minister said although the impact is there, but to ascertain the actual impact in financial terms is not an easy task.
However, he opined that the trend of this pandemic is now declining a little bit while the government has been trying its level best to rein in the infection rate through various measures.
“Hopefully, we’ll be able to control the spread of this pandemic to a large extent by the middle of coming year and then the implementation of development projects including mega ones will go on in full swing,” he added.
Talking to the BSS, country’s eminent economist and chairman of Palli Karma Sahayak Foundation (PKSF) Dr Qazi Kholiquzzaman Ahmad said when the first patient of COVID-19 was detected in the country in March, then there was no so much of preparations from the government side, even the other countries of the world were also not so much prepared.
“But, with the passage of time, we’ve been able to check the spread of this virus as well as its death rate through taking some good preparations,” he added.
Dr Ahmad mentioned that the government has been able to manage prudently the country’s overall agriculture and industrial sectors through announcing Taka 1.21 lakh crore stimulus packages side by side various effective measures were undertaken to save the economy and maintain the livelihood of poor section of people.
He said cash support and other assistances were provided to some 2.5 crore marginal people of various classes for which there was no such shock in the country’s economy while the trade and commerce has also made a comeback.
The renowned economist opined that the agriculture sector of the country has performed the most during this COVID-19 period, especially the government’s incentives to the farmers before Boro harvesting, had resulted good in combating the impact of the pandemic.
“The growth has been negative even at the neighboring countries, but our growth has been good as it has reached over 4.5 percent according to the estimation of the IMF,” he added.
The PKSF Chairman said although the stimulus packages for the large and medium enterprises have been implementing well but the packages meant for small and micro enterprises are yet to be implemented fully.
In this regard, he suggested for providing more support to the small and micro entrepreneurs side by side continuing support in the agriculture sector.
Former Governor of Bangladesh Bank Dr Atiur Rahman said Bangladesh has done comparatively better than other countries of the world in the outgoing year 2020 braving the pandemic as because the country has been able to face the “COVID-19 fear” successfully.
He said the country did not get shock from COVID-19 to a large extent as the trade and commerce did never come to a full stop side by side the RMG factories were reopened in the right time maintaining health protocol. Besides, the rural economy remained operational during the COVID-19 period.
“Our farm wages were not reduced during the pandemic which means that the farmers have enough funds in their hands. As a whole, we can say although the COVID-19 has jolted the employment generation but there was no such incident of large-scale unemployment,”
The former central bank governor also opined that the way country’s economy is moving forward, it is still ahead of many countries of the South Asia. Referring to Prime Minister Sheikh Hasina’s earlier announcement of staying beside the businesses when the stimulus packages were announced in April, Atiur said these have infused confidence among the business class for which the various economic indicators are now showing the signs of hope.
The senior economist also opined that some factors have worked effectively to keep the country’s economy dynamic during this COVID-19 period. These are the time befitting and courageous policies of the government, keeping operational the agriculture sector during the entire pandemic period, the rural non-farm sector also fared better while the digital transformation also yielded better, he added.
“Side by side, there is sufficient liquidity, especially the inward remittances have kept up the supply of liquidity in the rural economy. Apart from this, the export earnings have come to the normalcy again. We’ll have to complete the works of Padma Bridge, Bangabandhu Shilpa Nagar and other mega projects speedily through which our GDP growth will be more expedited,” he added.
Commerce Secretary Md Jafar Uddin said that the country as well as the people has remained alive even in this pandemic due to the courageous steps from Prime Minister Sheikh Hasina.
He said that the Ministry of Commerce has taken some cautionary steps for which the overall macroeconomy side by side the market price, demand and supply or supply chain remained normal during this pandemic period which was very much essential for the country.
“We’re still better off compared to many countries of the world during this pandemic period for which we’re daring to graduate from the LDC status while the preparations to this end are also underway,” he added.
Immediate past president of Dhaka Chamber of Commerce and Industry (DCCI) Shams Mahmud noted that the country has been able to overcome the shock of the COVID-19 successfully.
He said since Bangladesh is heavily dependent on import of raw materials from China, there was some problem in the supply chain at the initial stage of COVID-19. “But, the COVID-19 crisis has also enabled the RMG sector to produce its necessary raw materials,”
Mahmud said the rural economy remained operational throughout the year 2020 which has shown the strength of the domestic economy. Side by side, he said the inward remittances have played a special role towards keeping operational the entire economy.
He opined that the timely decision to reopen the RMG factories during the pandemic alongside the other policies of the government have yielded much better results.
The business leader also suggested for properly implementing the stimulus packages meant for the SMEs, depreciating Taka against US dollars, taking steps to join the newly formed free regional trade alliance, the Regional Comprehensive Economic Partnership (RCEP), determining the real financial losses due to COVID-19 and thus taking pragmatic steps to implement to offset those.
Dhaka University Professor for Development Studies and Executive Director for private research think tank Research and Policy Integration for Development (RAPID) Dr M Abu Yusuf said the mills and factories had to reopen with risks during the COVID-19 while the stimulus packages and the revenue support have also helped to keep dynamic the stagnant trade and commerce.
“The most important thing is that COVID-19 has not been able to create a big crisis in the economy,” he said, suggesting the government to bring the affected people afresh under new stimulus packages.
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