Dear Mr. Finance Minister, Greeting. You are now one of the busiest persons. You along with your team are doing a Herculean task--preparation of our national budget for next fiscal year. Yet, take a little break, if possible, to read an important message the Covid-19 delivered this week following the government's move to reopen the economy without containing the spread of the virus.
The first week after lifting the 'lockdown' could not produce inspiring outcomes.
The number of new infection cases and deaths caused by Covid-19 this week is higher than any of past weeks.
More than 16,000 infection cases were detected by our health agency. Nobody knows how many have been infected with the coronavirus this week due to low testing capacity. The health agency also reported more than 200 deaths from the virus this week. The number is surely higher than the reported one as some more people died by this time with Covid-19 symptoms. They did not make the list.
The week that began on May 31 after the end of 'lockdown' turned to be very crucial as it was supposed to forecast the coming weeks.
Health experts and epidemiologists were not in favour of ending the 'lockdown' hurriedly without flattening the virus infection curve. They were concerned about the safety of citizens and their lives.
The government, however, had a different idea. It wanted to reduce the people's sufferings from loss of livelihoods by reopening economic activities that had come to a grinding halt throwing millions of people out of work.
The shocking result of this action is now evident as well as the lack of planning. Two days after ending the half-hearted 'lockdown' enforced in the form of general holidays, some ministries moved to divide the country into three zones—red, yellow and green- based on the number of coronavirus cases in different areas. Another announcement was made that only 25 percent public officials would attend the offices in the secretariat for ensuring social distancing, an important health safety measure to contain the spread of the virus. These efforts show the authorities were running behind the virus.
After the week was over, we noticed that the move to reopen the economy could not yield any inspiring outcomes. Factories opened, but could not gear up productions due to lack of demand. Restaurants remained opened without customers. Inter-district buses got few passengers. The airliners were forced to cancel a good number of domestic flights everyday because nobody was flying.
The reason is simple and clear. People are concerned about being infected by the virus. They have no confidence in the healthcare system as they read every day either in newspapers or on social media how their fellow citizens are struggling to have tested for Covid-19 let alone getting proper treatment. This fear and lack of confidence forced them to be skeptical in the resumption of their economic activities in full swing.
So, the message is very clear. Before reopening the economy, the virus must be contained and people's confidence in the health care system must be restored.
Dear Mr. Finance Minister, you know the virus will stay for a longer period. We won't get relief until an effective vaccine is developed. It may take one year or more to get the vaccine. Even, there is an apprehension that an effective vaccine may not be available for years as had happened in the case of HIV/AIDS and Dengue.
Epidemiologists and health scientists have repeatedly warned that the virus will hit again, as soon as the coming winter season. We know of the resurgence of the virus in China and South Korea. The second wave may appear to be more deadly and lethal as was the Spanish flu in 1918-19. It may cause more economic disaster.
What the Nobel laureate economist Paul Krugman writes for the New York Times criticising the Trump administration's move to reopen American economy hurriedly is noteworthy.
The renowned economist writes: "To be sure, epidemiological forecasts are highly uncertain. But this uncertainty calls for more caution, not less. Open too late, and we lose some money. Open too soon, and we risk an explosive second wave of infections, which would not only kill many Americans but also probably force a second, even more costly lockdown."
He is not alone in making such a warning. Across the globe, economists and health experts are issuing the same notes of caution. This warning is applicable for us, for all.
Dear Mr. Finance Minister, as you know both the crises—health and economic-are bigger and unprecedented as well. You have to address both crises.
If health care gets less care in your budget proposals it may cause a deepening economic crisis, slowing down the recovery. This will make people's struggle for livelihoods harder. If they can not earn enough, they will not be able to spend enough on food and health care. They can not remain well. They will remain vulnerable to being infected by Covid 19. If they are infected, the health care system must be able to test and treat them. Failing to do so jeopardises people's lives and the moves to recover the economy.
So, there is no alternative to making the health care system ready for the second wave. It may sound surprising that being the finance minister you will have to act now as the health minister too, at least for making big budgetary allocation for building a strong health care system for the sake of economic recovery.
The health crisis caused many other crises. You will have to increase the allocation and the number of beneficiaries under the social safety net programme as the pandemic, according to experts, doubled the number of poor and vulnerable people in the country. You will have to increase food subsidies to keep prices affordable for the lower income people.
This is a unique situation. None of your predecessors had to experience such a tough time.
The challenge is bigger, but you have little to bank on to overcome the challenge because all major economic indicators now look weak. Even then, you will have to make a promise for big spending to generate employment. You will have to provide big incentives to the private sector so that they can recover from the pandemic shock. In fact, you will have to give more. But you will have to expect less for financing the big spending. If you increase tax to earn more, this will put extra burden on people who are already suffering from the pandemic fall out
Borrowing from the banking sector may put additional burden on them. They were already asked to give Tk 1 lakh crore stimulus loans to businesses as loans under the government announced stimulus package. If the government goes on a borrowing spree from the banks like the current fiscal year, this will worsen the private sector credit growth.
Stock market could have been an alternative funding source for businesses. But the stock market itself is ailing. It itself needs care and stimulus. So, external sources are your last resort to finance the budget deficit.
We understand your difficulties. But you must come up with fiscal support for recovery. You know, fiscal policy support has been at the forefront to overcome this economic crisis. Your counterparts in developed economies are lucky. They have already announced big stimulus packages ranging from 15 to 25 percent of their GDP to help their economies rebound. Needless to say, they have a strong health care system and some of their health expenditure is more than 10 percent. But, we could make the stimulus package worth only 2 percent of the GDP. And our public expenditure for health care is less than one percent of GDP.
Dear Mr. Finance Minister, we believe you will come up with your best proposals commensurate with the country's economic capacity. Yet, you will have to remain worried about their proper implementation because of an inefficient bureaucracy and alleged corruption at every level. You need to focus on this to strengthen budgetary governance so that you can reach your goals you will have set in the budget.
But above all, you should keep this fact in mind that the health crisis caused the economic crisis. And the economic crisis cannot be solved until the health crisis is either controlled or resolved. This has been proved in the first week after lifting the 'lockdown'. So, public health and social safety should prevail over all other economic issues in the new budget you place in the Parliament on Thursday. This is the need for the time being.