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The Financial Express

Towards a sustainable recovery of economy  

| Updated: October 25, 2020 22:18:56


Towards a sustainable recovery of economy   

The nation's ability to beat all odds and bounce back with renewed vigour is proverbial. And it has again been vindicated as the economy has been returning to normalcy by gradually overcoming the devastating impact of the pandemic-induced adversities. The earnings from the export sector and the remittance receipts have been robust reflecting positively on the Gross Domestic Product (GDP) growth. But the forex reserve or export does not tell the whole story about the economy. It was exactly these issues that came under fresh scrutiny at a recent webinar organised by this paper. Experts and stakeholders at the event pointed to the fragility of the overall economy despite its strong performance in a handful of sectors. And to address this weakness, it would require a supportive environment, ensuring more inclusive growth of the economy.

In this context, the credit for the economy's resilience should go to the common people. Since, as in the present case, they have been demonstrating their strength time and again in the face of calamities of natural origin. So, it is time due recognition was given to their sacrifices and contribution to the economy and society at large. That would require giving back through a welfare-oriented approach to the common people the fruits of Gross Domestic Product (GDP)-based growth. To that end, the social sector needs to be strengthened and steps taken to make the state institutions more sensitive especially to the needs of the less privileged sections of society.

True, the large businesses backed by the government's stimulus package have fared better, but informal sector took quite a bad beating during the pandemic. Being informal, their accessibility to the government-provided stimulus from the formality-prone, risk-management-driven banks was very limited. A reliable statistics is lacking on how many of these micro, small and medium-scale enterprises (MSMEs) in the informal sector have failed to return to business. For the economy's more sustainable recovery from the pandemic shock, these badly battered MSMEs must be salvaged. Once these MSMES are back in business, millions will get back their jobs lost to the pandemic. And that would contribute hugely towards saving them from further pauperisation. So, the government should consider it a priority for bringing these hundreds of thousands of MSMEs under the formal sector of the economy.

Also, towards increasing their productivity, the government should arrange for skill and capacity development training to both the workers and the employers in this sector. In fact, these steps would ensure a longer-term and sustainable recovery of the economy from both the present and future shocks. In a similar vein, other highly potential emerging sectors of the economy including the IT and the various online-based start-ups should get the government's renewed attention. Given adequate backing, they have the potential to reduce the economy's over-dependence on the RMG products or migrant workers' remittances as the main source of foreign exchange. 

It has to be understood that the issue of economic recovery is not a one-off one. For the uncertain world that we are in, recovery is going to remain as an issue of constant concern. That would require the government support in tandem with non-government and NRB inputs to be always ready and generous towards the vulnerable sections of society and economy.

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