Can Bangladesh navigate through the post-COVID 19 pandemic shock?

Kazi Amit Imran

Kazi Amit Imran

Since the global COVID-19 outbreak, despite being conservative in mobilizing resources to prepare for the pandemic, the government reallocated resources and collaborated with non-state organizations to contain the COVID-19 virus outbreak. Additionally, the government prioritized the health service sector and formulated a COVID-19 containment strategy to ensure that the pandemic has a lesser impact on the nation. The government, non-state organizations, and donor agencies provided both health safety kit support and direct cash support to ensure the affected families can purchase necessities.

Despite the government adopting multi-dimensional approaches to contain the COVID-19 virus spread, it has been a hard battle for the entire nation to fight against the health pandemic. The pandemic not only claimed thousands of lives but also almost halted the economic activities that resulted in unemployment, supply chain disruption, inflation, devaluation of local currency, closure of micro-enterprises, closure of SMEs, and temporary closure of several industries. In addition, the financial institutions also suffered from irrecoverable losses. It was unable to generate income by disbursing loans to loan seekers and was forced to waive to collect EMIs and late fines on EMIs. The compliance with the health safety protocols meant that the labor-intensive entities had to cut down their operations and the panic of the virus caused a scarcity of day laborers which remains essential during crop harvesting. In addition, as the pandemic hit globally, many countries started to deport foreigners to their home countries. Since 2020, approximately 666,000 migrant workers 1 have been deported from different countries. All these collectively are major concerns as the revenue generation of the government has been hit hard and on the other side, the government has no other choice than to continue to mobilize financial and non-financial resources all across the country.

Alike other nations, Bangladesh is accumulating and mobilizing resources to revive the economy. The government has already formulated an economic revival strategy to cushion the economic and financial shocks. As part of the overall goal, the government is offering soft loans to start-ups, SMEs, MSMEs, and joint-venture entities in addition to providing long-term loans to both ICT and agricultural focused businesses. Additionally, the mega projects continue to employ thousands of skilled and unskilled workers. Though all these steps look promising, the recent report on the central bank’s depleting foreign currency reserves coupled with the reluctant cooperation from developed nations poses the question –“How Bangladesh would pass these crucial and critical situations?”

Since the birth of Bangladesh in 1971, the nation has observed numerous natural and human-made disasters and it is an absolute astonishment that Bangladesh has been able to revive from all these disasters and yet have a GDP growth persistently of about 7.0%. The physical and service infrastructure that evolved in Bangladesh over the years needs to be leveraged at this stage and additionally, the tech industry that is growing rapidly needs to be utilized to come up with tech-based interventions and tech-based solutions. This blended approach would contribute towards 1 Website: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7395589/

Rewinding the nation to the past decade would provide us with a clear picture of the initiatives that had aided Bangladesh to become a lower-middle income country from a country that was termed a bottomless basket. Adopting and repeating those initiatives and contextualizing them to the current context would help the nation towards closing the development gap which resulted from the prolonged pandemic.

Furthermore, the government needs to escalate bi-lateral talks with nations where we can export our RMG products and send our human resources which in turn would contribute to increasing the foreign currency reserves. Through the fiscal policy, the government needs to restrict imports of luxurious products by increasing taxes, whereas on the hand, through the monetary policy, the interest rates need to be reduced which would result in individuals spending their saved money and enterprises taking loans at cheaper servicing option.

The conservative economic policies are the keys to fight this unprecedented economic situation. Despite the ultra-poor, poor, and new poor affected being challenged to make alterations in their lifestyle to combat the situation, the nation backs up all its citizens to make this temporary sacrifice for the upliftment of the nation.

The views expressed in this article are solely of the author and do not represent any entity. The writer is a freelance journalist and has previously served at USAID/Bangladesh, The World Bank, and BRAC.