Bangladesh's ability to come out of the Covid-19 dilemma and resume economic activities earlier than many countries has paid dividends, economists and entrepreneurs told a discussion held in Dhaka Tuesday.
The discussants, however, laid emphasis on taking some more supportive steps to accelerate the post-pandemic recovery process.
They insisted that an economic rebound should accompany people’s welfare and the policy atmosphere needs to reduce costs of doing business for ensuring sustainable recovery.
In view of uncertainties in the coming months, the participants pointed out that time would say whether Bangladesh’s early actions have yield good results or not. “People are talking about the recovery, but fragility is also there,” BRAC chairperson Dr Hossain Zillur Rahman said while chairing the webinar titled "Post-Pandemic Recovery: The Path to Ensuring Inclusive Development", organised by The Financial Express (FE).
FE Editor Shah Husain Imam, in his introductory remarks, observed that economic downturn might have been reversed to some extent through the opening up of businesses after the shutdown, “but the pandemic’s social consequences, including the feeling of boredom, need to be taken into consideration”.
Hossain Zillur Rahman, who is also executive chairman of Power and Participation Research Centre, said it needs to be remembered that the country is in the middle of the pandemic, not at the end of it.
He mentioned that Bangladesh’s resilient people are playing a vital role in bringing the country out of the dent of the Covid-19 pandemic.
"The Bangladesh people have decided to take a risk to come out from the dilemma and that contributed to what we talk about the growth rate and recovery," he said.
However, the economist gave equal importance to the creation of supportive atmosphere where, he felt, certain gap remained.
He listed that formalisation of informal sectors, supporting small and medium enterprises (SMEs) by making loans truly available to them, skills development and productivity increase also require proper importance.
Mr Rahman regretted that in Bangladesh “not everyone is capable of being resilient”.
"There are many people who are relatively badly endowed. In our 2019 poverty study, 20 per cent people were found poor, whereas now, due to the pandemic impacts, another 21 per cent has been added to the rank," he cited.
"So, we have to create supportive environment for the economy as well as for the less fortunate people," he said.
Dwelling on sectoral diversification, the economist wondered why the country is still dependent only on the garment industry when information technology is a good potential sector alongside agriculture, and rural non-farm sector. "Let them flourish," he said.
Former governor of Bangladesh Bank Dr Salehuddin Ahmed said people started arguing that the economy has bounced back from the adverse effects of the pandemic, given the export earnings and upward trend in remittances.
“These are some of the flashes which do not mean we have bounced back,” he said, referring to the performances of non-RMG items and traditional remittance-sourcing markets excepting Saudi Arabia.
Recommending going beyond conventional ways of measuring socioeconomic strength, Mr Amhed said key issues like security of life, law and order, rule of law, transportation costs and costs of other services need to be considered alongside GDP and per capita income.
“I think the definition of development and ‘bounce back’ should be welfare-oriented or people-oriented,” he said.
On the stimulus package, he said the banking sector is not organised.
“It should have been taken as non-routine jobs but bankers did not do so and applied conventional way of risk management, which I don’t like,” the former BB governor said.
Giving maximum credit to the resilient people for taking the economy to the current level of vibrancy, he said it cannot be understood that the nation has bounced back before upcoming December.
“Now we can say there are flashes of hopes and we are doing better than many other developed and developing countries,” he added.
Research Director at Centre for Policy Dialogue (CPD) Dr Khondaker Golam Moazzem said the state provided stimulus packages that do not reach small and medium enterprises (SMEs) mainly due to lack of formalisation of the sector.
Suggesting quick formalisation of the informal sectors, he said the government should go for non-cash financial supports such as tax waiver or utility bills waiver to help these businesses survive.
“It will help reach the target group directly and reduce the scope of leakage,” he pointed out.
Director of AK Khan and Company Ltd Abul Kashem Khan said big firms like theirs having strong financial and production base will be able to absorb the adverse impacts of the viral threats.
“But the SMEs have badly been suffering from the situation. If one entrepreneur is lost, many employment opportunities will automatically be lost,” he said.
Terming SMEs a major strength of the economy, he called upon the government to protect them by giving them required economic freedom.
Managing Director of Giant Group Faruque Hassan said the apparel sector has come back with its export figures, but the buyers are offering reduced prices.
"The problem is that we cannot sustain by taking orders in this reduced prices," he said.
He said export has bounced back but at the expense of factories' working capital.
Mr Hassan said cost of doing business in Bangladesh is “very high” which lowers the competitive capacity.
"We need more policy support," he said adding that there should be reduced interest of bank loans with restructure scope for a long period.
Founder and Managing Director of Shohoz.com Maliha M Quadir said the ongoing pandemic badly affected start-ups in the country as most of them excepting a few large ones, have gone through troubles.
“Some of them already have shut down their business. It is a very grim signal for us,” she said and mentioned that the recovery rate among the biggest start-ups is around 70 per cent.
She said start-ups need a lot of funding and the entrepreneurs raise fund internationally to grow their businesses but the country's image crisis and the high cost of doing business put them in difficulties in bringing global fund providers here.
“We’re recovering as things are coming back to normalcy but the small or medium start-ups are really passing a tough time,” she said.
About the stimulus packages, she said they have not received anything from the packages.