BUDGET FOR 2020/21' WITH INNUMEROUS CHALLENGES AMID CORONAVIRUS PANDEMIC - Volume 14 No. 2 April-June 2020
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Volume 14 • No. 2 • April-June 2020
BUDGET FOR 2020/21' WITH
INNUMEROUS CHALLENGES AMID
CORONAVIRUS PANDEMIC
03
06 Covid-19’s effect on poverty and policy response in Bangladesh
Professor Selim Raihan, PhD
09 AmCham calls for more allocation for ailing health sector and
urges not to borrow from banking system
13 Climate Change Disaster Management and Bangladesh
Muhammad Abdul Mazid, PhD
18 Covid-19: Bangladesh and NRBs in an unusual situation
M S Shekil Chowdhury
23 COVID-19 hit Readymade Garment Sector of Bangladesh
and the Bangladesh Economy: Surviving the Odds
Nazneen Ahmed, Ph.D.
27 Facets of the Covid-19 pandemic
Forrest Cookson, PhD
34 Scenarios and business impact of Covid-19
41 CSR: AmCham Initiatives on COVID-19
44 Miller urges AmCham members to show leadership
in handling Covid-19 pandemic
47 Regulatory monitoring must for curbing food adulteration
Syed Ershad Ahmed
50 AmCham In Action
Volume 14 • No. 2 • April-June 2020
BUDGET FOR 2020/21' WITH
INNUMEROUS CHALLENGES AMID
CORONAVIRUS PANDEMIC
We express our gratitude to The Business Standard, we
have used a few infographics of it in a couple of articles
as reference.
Syed Ershad Ahmed
President Vice President
Country Manager &
Managing Director
Expeditors (Bangladesh) Ltd.
N. Rajashekaran Syed Hammadul Karim Mirza Shajib Raihan
Member Member Member
Managing Director & Citi Country General Manager Business Manager-Bangladesh
Officer, Bangladesh, Citibank, N.A. MetLife Bangladesh Becton Dickinson India Pvt. Ltd
Serajul Islam Quadir
Executive Editor
The covid-19 pandemic has been infecting hundreds of inter economic relations among
thousands people across the world and has been raising the developed and developing
human costs as well. The measures that are needed to economies. One segment of the
protect human safety are severely impacting economic developed economy helps the
performances and day to day activity. It means that it will counterpart of the developing
have a deep impact on the performance of economic economies and vice-versa.
growth across the world and will shrink expansion of
economic achievements at least by 3 percent in the year The crisis highlights the need
as projected by the International Monetary Fund (IMF). for urgent action to cushion
Obviously it will be much worse than the previous two years the pandemic’s health and
– even less than the immediate past decade. The financial economic consequences, protect
crisis will be beyond imaginable. If the situation gradually valuable populations, and set
improves, which is highly uncertain – then the economic the stage for a lasting recovery.
growth might be somewhere around 6 percent after being
helped by political support and government measures. Due to lockdown for an
indefinite period the economic
The pandemic has been spreading at an alarming speed activities have almost been
and millions of people throughout the world are already halted and its impact will be
victims of the deadly coronavirus that has pushed the unbearable which may put a
economic activities across the countries including all the deep stain on the health of the
developing economies to almost a standstill. The countries country’s flourishing economy.
have been imposing tight restrictions on the movement of The crisis has been crippling
people and transports to stop the spread of the infection. almost every aspect and
The death toll has been rising every day and there is no segment of the economy. The
sign of relief, and the world is unfortunately waiting for a situation is similar irrespective
second wave in places where the number of infections has of nations – developed or
been gradually diminishing like China, Italy and some other developing economies. The
European and Asian countries. So, the economic damage is scenario of Bangladesh is
already evident and represents the largest economic shock not different. Oil producing
the world has experienced in recent times. On a longer countries have already started
horizon, the deep recessions triggered by the pandemic are to feel the pain due to the sharp
expected to leave lasting scars through lower investments, nose dive of oil prices across
an erosion of human capital through lost work and the globe. The Bangladeshi
schooling, and fragmentations of global trade and supply expatriates, who continue to
linkage. send home money from these
countries and support the
The pandemic will push most of the countries into deep foreign exchange reserves with
recession in 2020, per capita income contracting in the strong foundations and have
longest fraction of countries globally since 1870. Advanced been considered as one of the
economies are projected to shrink 7 percent and it will back bones of the economy, are
have a large impact on emerging markets and developing now becoming the direct victims.
economies. The economic growth is highly dependent on They are now being considered
3
and treated as the burden of the earlier tabled by Finance Minister the picture that the success largely
family as well for the society around AHM Mustafa Kamal with an amount depends on the speed of recovery
them. A similar picture has been of 568,000 crore taka, the biggest in from deadly contagious virus.
observed in the export sector. Bangladesh’s history while he made With this aim the American Chamber
arduous efforts to please all sections of Commerce in Bangladesh
International Financial institutions of the country. Despite an uncertain (AmCham) has organised a virtual
like the World Bank, International and bleak future in terms of recovery panel discussion titled ‘Budget
Monetary Fund or Asian of the global economy the budget for winning back the economy”
Development Bank delivered a aims to achieve 8.2 percent on June 17, 2020, moderated by
commiserate forecast regarding the economic growth (GDP). The budget Syed Ersha Ahmed, the President of
economic growth of the fiscal year has allocated a total of 29,247 Amcham. (For more details, please
of 2019-2020. According to their crore taka for overhauling the health visit: https://amchambd.org)
estimates the economy might grow sector, as the sector which has been
less than 3.0 percent. We cannot thrashed by the Covid-19 pandemic. AmCham believes that the
ignore this prediction if we consider The government has taken up a government is sincere to return back
the full picture in and around our comprehensive plan with strategies the economy to be propelled for the
country. If the covid-19 continues discouraging luxury expenditures and interest of downtrodden people. It’s
to last long and if it spreads in a prioritizing government spending imperative to follow-up on the above
wide scale like the present wave, that creates jobs. The budget hiked mentioned discussion and make
then obviously the economy will be excise duty on bank accounts with assertive moves right away, to control
shattered. The day labourers are significant balances in an attempt the pandemic wreaking havoc on the
the worst sufferers and victims of the to increase revenue collection. socio-economic landscape, business,
situation. Agriculture sector, the hero of mindsets and lives of Bangladesh.
Bangladesh during this crisis, is the We, the people of Bangladesh
The lives and livelihoods of these second highest priority in the budget. require socio-economic recovery
people now need active support The Finance Minister aimed that the from this crisis by standing together
from the government and policy National Board of Revenue (NBR) in unity.
makers. According to the Bangladesh would collect 330,000 crore taka
Bureau of Statistics (BBS) around that is also another unrealistic target. Immediate steps are required to be
34 million or 20.5 percent of the Along with the economists we feel asserted synchronously from both the
total population of Bangladesh that the targets of GDP growth and public and private sector before the
have been living below the poverty revenue collection are highly needed clock stops ticking. For instance, if
line. An analysis by Dhaka-based to revise downward and policy the government of Bangladesh (GoB)
South Asian Network on Economic makers need to be realistic. can revisit the budget of 2020-2021
Modeling (SANEM) shows that this Leading economists across the world and make necessary re-allocations
number might rise by 36 million if feel that during this extraordinary and re-direct funds from the
the income level for the poverty line period GDP growth matters a little, government’s treasury to which, the
is raised by 1.25 percent. A good though they do not ignore the main contributors are the business
thing is that against this scenario the significance of economic growth. community of the nation, then it
Bangladesh government has already At the moment people are more would prove to be much beneficial to
announced financial incentives and concerned about the risk of their entire county and the nation at large.
packages for handling the situation daily lives as well livelihoods.
and has been implementing different Economic destruction and damaging Internal funds (from budget
social safety net programmes. But economic efficiency have been surplus) could be kept aside and
the main challenge is to reach the greatly affecting jobs and income disbursed using good governance
fruit to the targeted people without losses of millions of people across and transparent tracking of funds
any form of malpractices. So it is the the walks of life. This is the reality and accountability to mobilize
holy responsibility of the government and our policy makers should not resources and provide subsidies
machinery mainly branches of grass contend with this. A consensus with special provisions/legislations
root level government, known as is there on the horizon that the by the GoB to open a ‘Job Keeper
local government, to ensure the recession will be deeper and recovery Benefits’ scheme applicable to both
implementation of these noble plans. will be slower than the projection. the employers and the employees.
The blunder reopening the economy This could be implemented by the
gradually is clearing the picture Bangladesh Bank (BB) and NBR
Budget for the fiscal year that the success largely depends on through their authorized tax and
2020-2021 the speed of recovery from deadly bookkeeping agents to support large
contagious virus. corporations, Small and Medium
Against the context of deep scale Enterprises (SME’s) for at
crisis arises from the pandemic A consensus is there on the horizon least the top 10 to 15 sectors of
both at home and abroad the that the recession will be deeper Bangladesh identified by Bangladesh
national parliament has approved and recovery will be slower than the Investment Development Authority
Bangladesh’s budget for the fiscal projection. The blunder reopening (BIDA) and the other chambers of
year of 2020/21 that has been the economy gradually is clearing
4
commerce and industries, which principal and interest repayments on Ekushey Padak by the government
have the potential and demonstrated all loans attached to any business for for immense contribution in science
financial willingness and capabilities at least a period of six months, while and technology, Mohammad Nasim,
to contribute positively towards the the interest will be capitalized (that is, one of the top leaders of ruling
GDP of our country. extended) and paid off over the life Awami League and former Health
of the loan. This type of businesses and Family Welfare Minister, also a
Similar types of schemes/temporary to be all-inclusive, ranging from the valiant freedom fighter and proud
reliefs could be applied to creating big businesses to SME’s to any type son of one of four National leaders
‘Unemployment Benefits’, ‘Urban of commercial and non-commercial Muhammad Mansur Ali, Sheikh
and Rural Socio-Economic Benefits’, businesses (including not-for-profits Mohammad Abdullah, State Minister
‘Healthcare Benefits’ and much more and landlords). This will keep people for Religious Affairs, and a freedom
involving both the public and private from being evicted and struggling to fighter and senior leader of ruling
sector key role players playing active pay rents and utility bills. Awami League, Major General
roles. (Rtd.) Anwarul Kabir Talukder, former
If we do not step up our game now, State Minister for Power, Energy
BB and NBR together can grant a we will not survive let alone come and Mineral Resources during
6-month (extendable depending on up on top of this crisis because this BNP regime, M Abdul Monem,
the covid situation) offer deferral situation is much graver than the a prominent industrialist and the
on loan repayments on mortgage, Great Depression of the 1930s. founder of conglomerate Abdul
personal credit products, defer Monem Ltd, Latifur Rahman, one
It is very sad that during this of the most leading industrialists
period we lost a number of noted and Chairman of Transcom Group,
personalities, who were the assets for Nazmul Karim Chowdhury, the Vice
the nation like Emeritus Professor and Chancellor of Fareast University,
leading academician Anisuzzaman, Dr. Saadat Hussain, former Cabinet
National Professor Jamilur Reza Secretary and ex-Chairman of Public
Choudhurry, who was awarded Service Commission, Allah Malik
Kazemi, Change Management
Adviser and former Deputy Governor
of the Bangladesh Bank, and
Niloufer Manzur, founder and
Principal of Sunbeams School,
one of the most prestigious English
medium schools. She will be ever
remembered amid the heart of
hundreds of students both at home
and abroad as an ideal pioneer,
guardian and leading academician.
The covod-19 also snatched away
the most valuable lives of frontline
fighters like doctors, nurses,
members of the armed forces, police
and journalists. This is really an
irreparable loss for the whole nation
which we will never be recouped.
We are also grateful to our esteemed
writers who have been continuously
supporting us by contributing
their well thoughts through their
most valuable pens. Similarly
we acknowledge the importance
of the AmCham members and
other business houses that have
been supporting us by providing
advertisements. We believe that
the readers will find interesting and
informative reading this Journal.
5
Covid-19’s effect on
poverty and policy
response in Bangladesh
Professor Selim Raihan, PhD
of the impact of probably this is the best method
Covid-19 on poverty to understand the poverty impact.
in Bangladesh involve However, it is very difficult to conduct
both the supply-side any nationally representative
and demand-side household survey under the current
shocks. The supply- situation. Therefore, so far what
side shock emanates we have seen concerning some
from the shutdown of primary surveys in Bangladesh,
economic activities, using mobile phones, has not been
whereas the demand- nationally representative. Also,
side shock comes from another challenge is that questions
falling exports and in these phone-based surveys are
remittances. related to what is happening on
income, whereas the convention of
In the labour market, estimating poverty in Bangladesh is
we fear a large scale to use the household expenditure
job loss. As more than data as a better proxy indicator of
85% of our labour understanding households’ economic
force is in the informal status. The income data is also not
sector, this job loss very reliable for poverty estimation,
will have important as, in normal time, people tend to
implications for the understate their income, and in the
Bangladesh’s success in poverty persistence of the aggravated crisis time, people tend to overstate
reduction over the last two decades poverty situation in the future. Also, their income losses.
is noteworthy. From as high as 48.9% households, highly dependent on
in 2000, the poverty rate, using the external remittances, are facing From South Asian Network on
national upper poverty line income, a new challenge because of the Economic Modeling (SANEM), we
came down to around 24.3% in sudden fall in remittance income. did some model simulations using
2016 (as per the Household Income Compared to the non-remittance the Bangladesh Bureau of Statistics’
and Expenditure Survey of 2016) and recipient households, the remittance- nationally representative Household
further to 20.5% in 2019 (as per the dependent households appeared to Income and Expenditure Survey
projected estimate by the Bangladesh be more vulnerable to cope up with data of around 46,000 households
Bureau of Statistics). the current crisis. conducted in 2016 by considering
the above-mentioned supply and
The current health and economic How do we understand the poverty demand-side shocks. It appears that
crisis brought by Covid-19 is feared impacts of Covid-19 in Bangladesh? a 25% negative shock on households’
to have a devastating impact on There can be two ways. First, through expenditure leads to a rise in the
the poverty status of the country. a country-wide primary survey of poverty rate in Bangladesh from
The transmission mechanisms representative households, and 20.5% in 2019 to around 41% now.
6
This aforementioned rise in the which has been announced for to energise the private sector
poverty rate has three important the readymade garments, the investment, revive economic activities
implications. First, the success agricultural sector, and other affected and get the economy back on the
of reduction in poverty over the sectors. A large part of the stimulus high growth path. This will also help
past one and a half-decade in package is credit-based, through the to reduce the magnitude of job losses
Bangladesh is under threat now. In banking system and at the subsidized and assist people to escape from the
2005, the poverty rate in Bangladesh interest rate. Effective implementation poverty trap. One important concern
was around 40% and now in 2020, of the stimulus package is important here is that the stimulus package is
because of this crisis, the poverty
rate goes up to 41%. If the crisis
continues, the poverty rate will
increase further. Second, a large
new set of poor people, who were
vulnerable non-poor before the
crisis, are now added to this poor
population. Third, there is a high risk
that a large part of this new poor
will fall into long term poverty, and
the aggravated poverty situation will
persist for some considerable time in
the future.
Given the aforementioned scenario,
what have been the policy responses
so far from the government? There
have been three types of responses.
The first one is the stimulus package
7
placing additional pressure on the protection programmes is also a visible planning, economic activities
banking sector, which is already very challenge. The country’s tax-GDP have been opened up since May 31,
vulnerable because of high non- ratio is less than 9% - one of the which can significantly increase the
performing loans, mismanagement, lowest in the world, and in this fiscal level of health risks, and ultimately
and weak institutions. year, this may be as low as around lead to a large-scale shutdown
8%. of economic activities again. This
The second policy response has decision, therefore, needs urgent
been related to expanding social The third response is related to the reassessment. The victims of such a
protection coverage through food opening up of the economy from the policy of attaining the so-called ‘herd
distribution and cash transfer. lockdown situation as the choice of immunity’ would mostly be poor
However, there is a huge political- starting economic activities is now people.
economy issue of management preferred to the choice of health
of this expansion of the social safety for people amid the rapidly Finally, the lesson we learn from
protection programmes, given the growing infection number and the current crisis is that though the
fact that the country spends very low number of deaths from Covid-19. country experienced significant
on social protection as a percentage To begin with, the way the lockdown achievement in poverty reduction
of gross domestic product (GDP) was imposed in Bangladesh was over the past decades, success
- one of the lowest in the world. wrong. It was declared as a public remained to be very fragile to
Also, there are huge loopholes in holiday, which gave a completely external and internal shocks.
social protection programmes in the wrong message to the people. Given Therefore, the ongoing crisis can
forms of leakage, corruption, wrong the poor public health system in give us an opportunity to rethink our
targeting and mismanagement. Bangladesh - as the country spends development and poverty reduction
During the crisis time, these problems less than 1% of GDP as public strategies.
also get worse. Therefore, there is health expenditure—it has been
a need for strong effort, especially a very difficult task to handle this ......................................................
for making the social protection health crisis from the very beginning. Dr. Selim Raihan is a Professor
programmes effective, in terms of Therefore, it is necessary to open of the Department of Economics,
identifying the poor and vulnerable up economic activities through University of Dhaka, Bangladesh,
population, and ensuring that the proper planning and by phases, and the Executive Director of the
support actually reaches the poor considering the health risks and South Asian Network on Economic
people. The financing of the stimulus following the health rules. However, Modelling (SANEM). Email: selim.
package and the expansion of social unfortunately, without any such raihan@gmail.com
8AmCham calls for
more allocation for
ailing health sector
and urges not to
borrow from banking
system
rise further the AmCham
· Needs further allocations for
if and when admitted that it
health sector
necessary would be a big
· Impose more tax on considering challenge for
undisclosed money the present the government
crisis due to to attain the
· Heavy borrowing plan from pandemic in budget goals.
banks will harm private the country
Planning Minister AB Mirza Azizul Islam
sector along with AB Mirza
M.A. Mannan
other parts of the Azizul Islam, a former Finance and
· Targets for GDP growth Planning Adviser to the caretaker
world.
and revenue collection government said that the target to
unrealistic “The health sector has already achieve GDP growth to 8.2 percent
· Customs Act 1969 needs received highest priority to safe life is not realistic and achievable.
amendment and also to maintain eco-nomic
activity alongside human life,” He said that similarly the target
· More focus needs on railway Mannan said. to achieve revenue growth is also
and waterway development unrealistic and the deficit would
The minister was responding to be much higher, adding that the
· Reduce corruption and a question raised by Syed Ershad government will have to borrow
bureaucracy to attract FDI Ahmed, the President of American from the banking sec-tor to meet
Chamber of Commerce in the deficit, meaning it would harm
Planning Minister M.A. Mannan said Bangladesh (AmCham) on 17th June landing to the private sector.
that despite increased allocation to discuss on the na-tional budget.
for the health sector in the national “Much of the targets were set with
budget for the fiscal year of Mannan, who was the chief guest expectations that the pandemic
2020/2021 the allocation might of the virtual meeting organized by would not last long, remit-tances and
9exports would rebound,” the minister economy. However, the proposed He recommended that the rate
said in response to former Finance budget shall be highly challenging in should be higher than that of 10
Adviser. the current pandemic and we would percent otherwise it might dis-
like to highlight few of our concerns. courage the regular taxpayers of the
“Health is the backbone of the He said that the epidemic has thrown country.
economy and for covid-19 it has the inadequacies of Bangladesh’s
come to the forefront. Prime minister health sector into sharp contrast. The AmCham also expressed its
has already said that it would get the As expected, the Finance Minister dissatisfaction with the plan to
highest priority to save invaluable proposed an allocation of Tk29,247 borrow from the banking system to
life,” minister added. crore for the finance the budget deficit.
health ser-vices
He informed the audience that the and health He said that AmCham believes
government approached the World education private sector credit growth will
Bank, International Monetary Fund sector, up by be hampered if the government
and the Asian Development Bank 23.44 percent borrowed the total amount from the
to finance as the budget support from last banks worsening the existing liquidity
to assist the projects as the health year’s revised crisis.
related projects are number one Ahsan-H-Mansur
allocation,
project. still much below our expectation “We urge the central bank to devolve
considering the current situation. a major portion of the borrowed
“She (Prime Minister) said that you amount on its own accounts, which
can go with a blank cheque, so go “We’re yet to learn more about the would also help boost money supply
ahead, if you come forward with specific guideline on the ‘mega in the market,” AmCham president
any health related project we will plan’ for the sector, which includes a said.
approve it.” medium-term 3-year plan and a 10-
year long-term plan addressing the Echoing to AmCham President
But the minister said that the severe short-comings exposed by the remarks on borrowing from the bank
government crisis,” Ershad said. AB Mirza Azizul Is-lam said that if the
can allocate government borrows heavily from
huge funds for The AmCham President stressed the banking sector, it will affect credit
the sector but on the communication and flow and investment in the private
the prob-lem transportation sector as it is one of sector. The
is capability to the most important infrastructural government
utilize it. elements to boost the trade and plans to borrow
investment alone. 85,000 crore
Syed Ershad Ahmed,
“We can buy taka from
computers, “Apart from the road and banks in order
equipment, medicines, can build airways, if we focus more on to meet the
buildings, more laboratories, but we developing waterways and railways deficit in the
Mosharrfa
cannot build a doctor over a night.” communication it would also help Hossain Bhuiyan proposed
the common people to reduce budget for
At the beginning Syed Ershad the cost of transportation for both fiscal year of 2020-21.
Ahmed, the President of the goods and passengers ensuring a
AmCham who moderated the dis- smooth supply chain in a country “Over-borrowing will hamper funding
cussion said in his opening remarks like Bangladesh,” the AmCham chief for private investors, who are going
that the novel covid-19 has been said. through a tough time due to the
casting a shadow around the world, coronavirus pandemic,” Islam said.
while the massive loss of human life He also proposed to discourage the
has been a tragic consequence of move to legalize the undisclosed He said that considering the
the corona-virus pandemic, the effect wealth or money by paying a 10 situation, the government should
on global and national economies percent tax which he termed as reduce unnecessary spending on
cannot be understated. In the pro- “unethical”. sectors like foreign travel and focus
posed national budget for the next more on farm mechanisation,
fiscal year the government has taken “However, the opportunity to implementing social safety net
certain measures in support for stimulate the capital market, programmes and rural development.
protecting critical domestic industries industrial investment or any produc-
and for attracting more investment tive sector to generate employment “Besides, drastic and tough measures
even in the crisis to win back the may be acceptable.” are needed to curb wide spread
10corruption while improvements to the upcoming fiscal year is an construction and maintenance of
the country’s ease of doing business unrealistic dream, Mansur said that roads and highways are always
ranking, bureaucratic efficiency, the government’s target to achieve prioritised even though waterways
and rule of law are also crucial for a 55 percent and railways have high potentials.
attracting both domestic and foreign increase
direct investment,” Islam also a noted in revenue “If corruption in the railway sector
economist said. collection was curbed, it would benefit
might not be passengers the most. Similarly, if the
“The Anti-Corruption Commission met amid the government sells the sand collected
should carry out their duties without coronavirus from riverbeds to traders, the cost to
fear or favour while the organisation fallout. dredge the river would be practically
Shams Mahmud
itself should be assessed to improve covered,” said the PRI executive
its efficiency,” he added. “The government must bring director.
substantial reforms to the tax
Ever since the two-month long administration to improve tax col- In most cases, contractors leave the
lockdown that began on March 26, lection and remove corruption and dredged sand on banks of the river
both domestic bureaucracy,” he added. from which it came. As a result, the
and foreign material just seeps back into the
investment has “There are not many provisions for water body, he added.
slowed down. poor people in the proposed budget
but the government will have to take Md Mosharraf
“To remedy the some measures soon in order to feed Hossain
situation, the the nearly 50 lakh people who either Bhuiyan,
government lost their jobs or had their income immediate past
Aftab ul Islam needs to slashed due to the pandemic,” the chairman of
propose a PRI executive director said. the National
realistic and pragmatic budget,” said Board of
Ahsan H Mansur, executive director He said that most borrowers, Md Fazlul Hoque Revenue, urged
especially micro, the government
cottage, small to reconsider its decision to increase
SECTOR-WISE BUDGET ALLOCATIONS
and medium taxes on mobile phone services. He
Total operating and development budget: enterprises, are noted that the automation of the
not receiving customs would ease the cost of doing
TK568,000CRORE Education and
technology funds from the business.
Agriculturea
Health government’s
Others Education and
Social security technology Tk 20,000 crore “We expect that the new Customs
and welfare Social security
and welfare
stimulus package Act will be passed soon, hopefully in
Pension
Defence since the banks’ the current session of the parliament
Industry and 0.7
economic service Transport and prof-it margin is as everything is ready and it is now
Public order
communication
around 1 percent. being scrutinized by the parliament
and safety Interest
standing committee on finance,”
Housing
Public administration “With such a low Bhuiyan said.
Power and energy
profit margin and
Entertainment, Subsidy and incentive
culture and religion 0.8 high operation The small and medium enterprises
Local government and
Pension rural development costs, banks have (SME) sector, which accounts for 25
lost interest in percent of the
disbursing funds coun-try’s GDP,
14.6 11 from the stimulus were affected
5.6 10.8 the most by
4.7 package, which
4.5 6.7 was meant to the covid–19
1.2
4.9 6.6 help small-scale pandemic,
5 6.5
5.1 5.5 6.9 firms survive according
Figure in% the covid-19 to former
Derrick Brown
outbreak. The AmCham
of the Policy Research Institute (PRI). profit margin should be around 3 President Aftab
percent at least,” Mansur said. ul Islam.
Resounding Islam’s sentiment
that 8.2 percent GDP growth in He said that unfortunately, the “We need to boost SMEs in order
11to increase In regards to bank borrowing, USAID, U.S. Embassy, Dhaka, M. S.
the sector’s Mannan said that the government Siddiqui, Managing Director, Hydro
contribution plans to borrow from the World Bank Machines Ltd., Tapas Kumar Mondal,
to the national and International Monetary Fund to Managing Director, International
GDP to 40 meet the budget deficit. Besides, the Beverages Private Limited, Md.
percent,” he inflow of remittance is still good, the Abul Kalam Azad, former Principal
said.
Abul Kalam Azad
The fact that
INFORMAL ECONOMY TAKES A BLOW
banks consider SMEs to be a risky
Less than 10% restaurants Public transports
investment should be changed as have opened but their getting one-third
the loan recovery rate from this sales are low passengers
sector is higher than that of others,
added Islam. He lauded the govern- Tea stalls have lost
ment for allocating 200 billion taka 80% customers
due to the pandemic Shopping malls
subsidized loan for the SME sector. see one-fourth
to one-third
“But the mentality of the banks and customers
financial institutions needs to be Footpath
changed for the disbursement of the trades have
Furniture, Clothing,
come down
money as they treat SME as the risky footwear and
sector for lending money. by 80% accessories sales
down by 75-90%
In response to a question by the Overall grocery
demand fell by
AmCham President Planning Cosmetic Stores
25-40% See sales halved
Minister MA Mannan said that the
government has been working hard
to protect the job market through agriculture sector is doing well and Secretary to the Prime Minister,
numerous initiatives. Apart from the a decent amount of foreign di-rect Al-Mamun M Rashel, Country
stimulus packages, the government investment can be expected to arrive Manager & Managing Director
has already transferred 2,500 taka as the government has taken steps to NATco Packaging Bangladesh Ltd.,
each to 50 lakh ultra-poor families encourage investors, Mannan added. N. Rajashekaran, Managing Director
and now plans to feed a further 40 & Citi Country Officer-Bangladesh,
lakh families across the country. The discussions were also attended Citibank, N.A., Showkat Ali Sarkar,
among others: Shams Mahmud, Director DuPont Bangladesh, A.
“The target is to bring the poverty President of the Dhaka Chamber Gafur, former Executive Director,
rate, which currently stands at of Commerce and Industry, American Chamber of Commerce in
35 percent due to the pandemic Fazlul Hoque, former President, Bangladesh and Syed Mohammad
outbreak, back down to 20 percent,” Bangladesh Employers Federation, Kamal, Country Manager,
Mannan said. Derrick Brown, Mission Director, MasterCard.
12Climate Change
Disaster Management
and Bangladesh
Muhammad Abdul Mazid, PhD
The planet is Again on April 23, 2020 Noam
approaching perilously Chomsky , one of the world’s
close to the global leading public intellectuals, while
temperatures of talking to National Observer
120,000 years ago, editor Linda Solomon Wood for a
when sea levels were Zoom conversation highlighted
6-9 meters higher than the necessity of increasing public
today. Glaciers are awareness and about the need for
sliding into the sea five government action vis-à-vis climate
times faster than in change, ‘the simple answer is: work
the 1990s, with more harder. There are no new special
than 100 meters of ice tricks. We know what the message
thickness lost in some is. We know the barriers that have
areas due to ocean to be overcome. We have to find
warming, and current ways to shape the message, in words
losses doubling every and actions, so as to overcome the
decade. Complete barriers. The message is two-fold:
loss of the ice sheets First, we’re facing an existential crisis
would raise sea that must be dealt with quickly; and
levels by about five second, there are ways to overcome
meters, like drowning it’. Without mincing words Chomsky
Climate change is by far the coastal cities, and was very candid –‘the message
most serious crisis facing the with utterly devastating effects must be conveyed in ways that do
world today. At stake is the future elsewhere — like the low-lying plains not induce despair and resignation
of civilization as we know it. of Bangladesh. As estimates from the among those inclined to accept it,
Yet, both public awareness and National Oceanic and Atmospheric and do not evoke resentment, anger
government action lag way behind Association (NOAA) suggest that, and even greater rejection among
what’s needed to avert a climate if emissions remain unchanged, those who do not accept what is in
change catastrophe. Meanwhile by 2100 sea levels could rise by fact becoming overwhelmingly clear.’
the world watches as it is toward more than eight feet. This would
a catastrophe of unimaginable irreversibly affect many of the world’s Climate change and the
proportions. At 91 years old, US poorest and most vulnerable people. management of disaster that follow
linguist and philosopher Noam This is only one of the many concerns ,is a problem that cannot be ignored.
Chomsky speaking from his office in of those who are paying attention The French journo have put the
self-isolation amid the coronavirus to what is happening before their problem squarely: the (French)
pandemic to Croatian philosopher eyes. The global journey of Covid19 government talks of the end of the
and author Srecko Horvas on 3rd as pandemic has been deriving the world, but we can’t get to the end of
April warned that once the pandemic concern that the bigger catastrophe the month. Transition to renewable
is over, two critical challenges will the world will have to face , due to energy should create a much more
remain - the threats of nuclear war climate change, is marching fast . livable environment quite generally,
and global warming. but it will inevitably harm some
13working people who can ill-afford still a big huge polluter, but they are countries which are most vulnerable
the shock, and careful planning is carrying out massive programs of to extreme weather events, so is the
necessary to deal with these and switching to renewable energies way development objectives of this deltaic
many other problems. That can be beyond anything else in the world.’ country. Increased investments in
done, and concrete solutions should In the suburb of US cosmopolitans adaptation may make the country
have been suggested. people are complaining that they more resilient to natural disasters.
have a thousand dollar electric bill Three recent Cyclones Phony,
Noam further manifested that per month ,but won’t put up a solar Bulbul and Amphan, within a year
‘very single journal should have a panel; and in fact they found power , were perhaps less devastating
shrieking headline every day saying panels missing because you’re than initially feared because of
we are heading to total catastrophe. not allowed to produce too much better early warning systems and
In a couple of generations, organized electricity’. Some of the economies more investments in embankment
human society may not survive. in south Asia is in dilemma whether infrastructure and shelters. As efforts
That has to be drilled into people’s they will patronage costly production to promote a green recovery take
heads constantly. After all, there’s of electricity through at coal or hold, Bangladesh may also well
been nothing like this in all of human nuclear power plants (both pose placed to attract foreign investment
history. The current generation has high risk for environment igniting that will contribute to climate change
to make a decision as to whether climate change). The causes and mitigation.
organized human society will survive impact of recent fire broke out in
another couple of generations, and Amazon forest or in Australia, and Bangladesh is highly vulnerable
it has to be done quickly, there’s not or the devastation that marred the to varying climate changes. It is a
a lot of time. So, there’s no time for Sundarban by Cyclones Amphan and country where three major rivers
dillydallying and beating around Bulbul have been a symptom, which converge, a country largely made
the bush.’ Chomsky elaborated that should worry everyone. up of low lying flood plains and
some time ‘the bad news should that is the statistical focus of the
be combined with discussion of the In this premise climate change has cyclone generating Bay of Bengal
things that can be and are being had already been a priority concern (BoB). The past has demonstrated
done. For example, the Chinese are for Bangladesh. As it is one of the how devastating major climatic
14events can be. Storms, such as intrusion of freshwater reserves in monsoon rains, and due to the
Cyclone Gorky (1970) ,great coastal areas and the rise of sea increased incidences of flash floods
typhoon of 1991, Sidor 2007, Aila levels. induced by erratic precipitation
2009 - which killed thousands of regimes. Coastal flooding is a major
people and left numerous people Many of the impacts of climate impact of sea level rise, which is
homeless - demonstrate the extreme change will reinforce the higher in Bangladesh because of the
severity of these events. Although environmental, socio-economic and effects of tectonic subsidence.
events like these are the extreme
examples, there are numerous other
impacts regionally across a number
of sectors. It is widely accepted
in the scientific community that
climatic events such as these will
increase globally. The Government
of Bangladesh (GoB) has invested a
substantial amount over the last 49
years to make the country resilient
to cope with the recurrent climatic
events. Disaster management
strategies have been developed over
times that are both practical and
effective. The impacts predicted by
the United Nations Intergovernmental
Panel on Climate Change (IPCC) are
as follows:
demographic stresses already faced Sea level rise is also associated with
In general, there will be an increase by Bangladesh. Climate change is increased riverside flooding, because
in frequency, intensity and magnitude likely to result in increased flooding, it causes more backwater effect of
of extreme weather patterns, the both because of the increase in the Ganges-Brahmaputra-Meghna
15Rivers along the delta.This will result policies and capital investment) • Coastal ‘greenbelt’ (afforestation)
in increased drainage congestion especially for floods and cyclones. Since projects.
due to higher water levels, which the 1970s, the GoB with the support of
will be exacerbated by other factors development partners has invested in: Recognizing the ‘urgent and
associated with climate change such immediate’ vulnerability of its
as siltation of estuary branches in line • Flood management and irrigation development objectives to climate
with increased surface runoff, and schemes to raise agricultural change, GoB prepared the National
higher riverbed levels. productivity in low lying areas; Adaptation Programme of Action
(NAPA) in 2005. This was followed
Higher temperatures will result in • Flood protection and drainage in by the preparation of the Bangladesh
increased glacier melt, increasing urban areas; Climate Change Strategy and
runoff from the neighboring Action Plan (BCCSAP), 2009, by the
Himalayas into the Ganges and • Coastal embankment projects Ministry of Environment and Forest
Brahmaputra rivers. The recent to prevent tidal flooding and in consultation with all relevant
Intergovernmental Panel on Climate incursions of saline water; stakeholders. The BCCSAP has been
Change IPCC Fourth Assessment the main basis for the Government’s
Report (FAR) states that glaciers in the • Multi-purpose cyclone shelters; efforts to combat climate change
Himalayas are receding faster than in over a 10-year program to build
any other part of the world, and this • Disaster management, response the capacity and resilience of
can be attributed primarily to global and recovery projects; Bangladesh.
warming. Increased Vulnerability to
Cyclone and Storm surges. There is • Irrigation schemes to enable dry ......................................................
evidence of a 5-10 percent increase season crop;
Dr. Muhammad Abdul Mazid,
in intensity (wind speed) that would retired Secretary to the GoB and
contribute to enhanced storm • Agriculture research programs
former Chairman of the National
to develop saline, drought and
Board of Revenue (NBR);
Bangladesh has a long history of flood tolerant, high yielding crop
email: mazid.muhammad@gmail.
designing and implementing various varieties; and
com
types of adaptation activities (both
16IMF predicts deeper
global recession
due to coronavirus
pandemic
The IMF said it now expects global
output to shrink by 4.9 percent,
compared with a 3.0 percent
contraction predicted in April, when
it used data available as widespread
business lockdowns were just
getting into full swing International
Monetary Fund (IMF) logo is seen
outside the headquarters building in
Washington, US.
The coronavirus pandemic is causing
wider and deeper damage to
economic activity than first thought,
the International Monetary Fund said,
prompting the institution to slash its
2020 global output forecasts further.
that the unique characteristics of still rising, saw some of the largest
The IMF said it now expects global lockdowns and social distancing downgrades, with Brazil’s economy
output to shrink by 4.9 percent, have conspired to hit both investment now expected to shrink 9.1 percent
compared with a 3.0 percent and consumption. “Thus, there and Mexico’s 10.5 percent and
contraction predicted in April, when is a broad-based aggregate Argentina’s 9.9 percent in 2020.
it used data available as widespread demand shock, compounding
business lockdowns were just getting near-term supply disruptions due China, where businesses started
into full swing. A recovery in 2021 to lockdowns,” the IMF said in reopening in April and new infections
also will be weaker, with global an update of its World Economic have been minimal, is the only
growth forecast at 5.4 percent for Outlook forecast. major economy now expected to
the year compared to 5.8 percent show positive growth in 2020, now
in the April forecast. The Fund said, Advanced economies have been forecast at 1.0 percent compared to
however, that a major new outbreak particularly hard-hit, with U.S. output 1.2 percent in the April forecast.
in 2021 could shrink the year’s now expected to shrink 8.0 percent
growth to a barely perceptible 0.5 and the euro zone 10.2 percent in The IMF said that more policy actions
percent. 2020, both more than 2 percentage from governments and central banks
points worse than the April forecast, would be needed to support jobs and
Although many economies have the IMF said. Latin American businesses to limit further damage
begun to reopen, the Fund said economies, where infections are and set the stage for recovery.
17Covid-19: Bangladesh
and NRBs in an
unusual situation
M S Shekil Chowdhury
Bangladeshis step and in the decade of 2010-2019,
into the overseas job 6,157,976 expats managed
market. This workforce employment giving a remittance of
sends $15-16 Billion $142.42 Billion to the country. It
annually as remittance, shows that in just a decade there was
100% of which remains a 54.7% growth in the employment
within the country. sector and 187.1% in foreign
Remittance is the key remittance. Licensed Agents and
source for earning recruiters in the manpower industry
foreign currency. played a pivotal role in achieving this
In 2019, 700,169 success.
Bangladeshi workers
joined the foreign Analyzing the statistics of 2019, it can
workforce and during be seen that only 43.55% of the total
that time $18.36 Billion Bangladeshi workforce employed
in remittance was overseas had the work relevant skill.
earned by Bangladesh. The number of NRBs who actually
Foreign Remittance is possess professional skills is even
the biggest contributor more disappointing as it is a mere
of Bangladesh’s Foreign 0.27%. Therefore, it is absolutely
Reserve. In 11th June necessary to be more attentive
2020, Bangladesh has towards improving the expertise of
recorded the highest Bangladeshi workforce so that they
foreign reserve of can earn higher salaries. (Skilled
The prime strength of Bangladesh’s
$34.44 Billion and this is accredited 43.55%, Semi-skilled 20.36%, Less-
economy is remittance. In the last 44
primarily to expats. This reserve can skilled 28.15%, Professional 0.27% &
years post-independence, around 13
cover 8-9 months of the nation’s Others 7.67%)
Million Bangladeshi’s have entered
import expenditure. Generally, if there
the overseas job market. They have A total of 13 Million Bangladeshis
is enough reserve to cater for 3-4
immensely contributed in world live abroad for work purposes while
months of spending on import, it is
economy as well with their talent and another 2 Million are residing with
considered satisfactory.
skill. During this time Bangladesh a dual citizenship. To sum it up,
has received $210 Billion in form of around 15 Million NRBs are not
In the last decade Bangladesh
remittance. This statistic relates only taking any benefits from the country
has achieved commendable
to the expatriates who have been and to top it all off, roughly each
success in NRB employment and
discernibly counted as NRB (Non- NRB is simultaneously catering to
remittance. In the decade of 2000-
Resident Bangladeshi). the economic and social needs of 1
2009, 3,981,310 NRBs found
jobs in different countries earning family consisting of 5 members living
Every year 6-7 hundred thousand
a remittance of $49.61 Billion in Bangladesh. In that respect, expats
18The manufacturing sector especially
food manufacturing and global
communication system has been
shaken by this situation. As the food
manufacturing sector has been hit
by the pandemic, it can be predicted
that a food crisis may occur in the
foreseeable future.
Every passing day more and more
people are becoming jobless
and business organizations are
experiencing severe existential
crisis globally due to the Covid-19
pandemic. Development of economy
and employment sector can be
seen as too far-fetched nowadays
where reports of organizations
firing employees and reducing or
are actually taking responsibility NRBs are residing in 168 countries suspending salaries and wages of
of 75 Million people and their worldwide. They are involved in their workers have become a common
livelihood. Alongside, responsibilities various sectors in order to support phenomenon. We are unfortunately
pertaining to their families, these their livelihood. By looking into living in oblivion as to when the world
NRBs are also socially awake. Setting the statistics, we can deduce that will become normal again. Despite
up health centers, educational Bangladeshis are majorly working in all its endeavors, the World Health
institutions in their respective areas Middle Eastern and countries heavily Organization is still unable to state
and spending towards development dependent on oil. Hence majority of anything for certain regarding this
of communication systems are a few the expats view Saudi Arabia as their unknown destructive enemy.
of the social activities conducted by ultimate job destination. 31.89% of
the expatriates. Thus NRBs are playing all the expats went to Saudi Arabia. Plenty of expats are returning to
an indispensable role in the rural The next destination is United Arab Bangladesh empty-handed after
economy through their investments Emirates (UAE), where 18.68% months of joblessness. Those who
and in many cases these expats are NRBs went. Following UAE, there’s came back are in much distress as
doing a remarkable job in lending Oman with 11.82%, Malaysia with they are seeing uncertainty about
money free of interests, which further 8.32% and Qatar with 6.36%. their future. The very expats who
promotes projects/investments of their Therefore, these countries are the once supported their families, friends
kith and kin. highest remittance senders too. The and villages are now falling into
2019 data shows that, out of the an abyss of dismay. Some of them
Unfortunately, these expatriates who $18.35 Billion of total remittance, fear they might soon be hit by food
play a crucial role for country’s 19.87% (i.e. $3.64 Billion) came shortage and financial crisis at the
economy are not prioritized during from Saudi Arabia and 14.89% (i.e. same time. The expats who have
national budget allocation. Instead $2.73 Billion) came from UAE. The done so much for the countries (both
of receiving priority treatment and remittance earning trend is somewhat native and employers) have now
facilities for their continuous aid in similar every year. These two countries become dependent on them for their
socio-economic matters, they fall are the biggest employers and are the livelihood.
victims to harassments in both home most sought-after job destinations for
and abroad. Indifferent regions of more than 50.57% of NRBs. Oman, As of the latest data, many countries
the country, unethical and greedy Malaysia, Qatar, Singapore, Kuwait are rushing Bangladesh to take back
people harass expatriates in multiple and Bahrain are in the list right after their workers. Bangladesh is now
ways to take unfair advantage of the major two nations. between a rock and a hard place.
them and dispossess them of their In one hand where Bangladesh, a
own properties. Sometimes, even In these trying times of the Covid-19 densely populated country consisting
officers at various administrative posts pandemic, NRB communities around of 160 Million people, is struggling
pester these NRBs to obtain immoral the globe are facing multitudes of to tackle the spread of Covid-19,
advantages by using them. Despite difficulties. Due to the Covid-19 numerous expats have returned after
having clear directions in government crisis, both economic and social losing their jobs and more are waiting
policies to provide easy facilities to activities have come to a standstill in to come back which would make the
NRBs, unethical officials still harass various countries. People are losing already tumultuous situation worse.
these expatriates. jobs and countries are witnessing
a downward trend in the economy.
19Bangladesh is trying its best to fight
the pandemic. However, the severity
of the crisis, lack of expertise in
disease control along with insufficient
preparedness in the field of health
care is pushing Bangladesh, a
middle-income earning country that
achieved 8% development rate for
the last decade, to witness one of
the biggest challenges of its time.
Bangladesh is moving forward with a
fighting spirit by treasuring the strong
willpower of its countrymen and with
the limited resources and wealth it
has. In the near future, Bangladesh
has to battle against many unknown into arable ones. Bangladesh needs months. Usually they pay about
challenges. The sudden loss of jobs to try to increase expert officials in the Taka 300 Million as the monthly
of daily wage earners, low-income foreign Missions and lead a strong salaries of these employees. These
workers, small entrepreneurs and job search action. The process to agencies are holding about 70-75
manufacturing industry laborers explore employment in the agriculture thousand confirmed visas but workers
alongside expats who lost their and food manufacturing industries are unable to go. For this reason,
jobs abroad are proving to be an in developing countries like Europe businesses in this sector have around
exasperating test for Bangladesh. and America should be commenced Taka 12-13 Billion on hold. They
without delay. That way both the need financial and policy support for
In this bizarre situation, it is of participating nations will be benefitted their survival. This will enable them to
utmost importance that focus is and the looming food shortage in the play a pivotal role in safeguarding the
extended in finding new job markets coming days can also be prevented. overseas job market for NRBs.
for the NRBs in diverse countries, As a matter of fact, Bangladeshis are
sustaining the current job market, inherently adept in agriculture, which International communities should
attempting to secure support from is something other countries can also come forward to support
different international organizations, make good use of at this time. Bangladesh and NRBs in this dire
undertaking self-employment projects situation, especially those countries
in the expats’ respective sub-districts The manpower employment that have benefited from NRBs all
and providing easily attainable bank agencies can play an integral role in these years for their own economic
loans and investment friendly policies maintaining the foreign job market and social development. The global
for any amount of investment. In light for NRBs as well as searching for new organisations should also extend their
of the expertise and work experience jobs for them. Due to the Covid-19 support in this respect.
garnered by the expats, government crisis, the manpower industries have
needs to stand beside the NRBs by received big blows and need to be Covid-19 is changing the outlook of
the globe. Everyone is improvising
their socio-economic planning as
per demand of the Covid-19 crisis,
chalking out new blue prints for their
action plans. Therefore, Bangladesh
will also have to advance by making
contemporary, time appropriate plans
and discard orthodox processes to
survive the post-pandemic era.
......................................................
Writer: M S Shekil Chowdhury,
Chairperson, Centre for NRB,
Former Governor, Lions Clubs
International & Former Senior Vice
President, Dhaka Chamber of
encouraging and aiding them towards lifted from the pit. Around 1600 Commerce & Industry.
entrepreneurship. Efforts should be licensed business institutions with
made to involve NRBs in agriculture of their fifty thousand employees are Email: shekilchowdhury@gmail.
varied countries to turn infertile lands at a complete loss for the last four com
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