Covid-19 and its impact on Bangladesh economy
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Friday
February 03, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
FRIDAY, FEBRUARY 03, 2023
Covid-19 and its impact on Bangladesh economy

Thoughts

M Shahriar Azad Bhuiyan
15 April, 2020, 04:50 pm
Last modified: 15 April, 2020, 04:59 pm

Related News

  • A jackal farewell
  • Hong Kong says 'hello' to woo back visitors after Covid
  • FM Momen to join Sri Lanka's 75th Independence Day celebrations in Colombo
  • Pakistan’s revisionist tactics
  • Diversifying products for economic prosperity

Covid-19 and its impact on Bangladesh economy

Bangladesh will fall into a really difficult situation if the country remains locked down for a longer period. Here, a huge number of people live from hand to mouth

M Shahriar Azad Bhuiyan
15 April, 2020, 04:50 pm
Last modified: 15 April, 2020, 04:59 pm
Covid-19 and its impact on Bangladesh economy

The Covid-19 pandemic has thus far spread to 208 countries and regions of the world, significantly affecting the global economy. Since the virus has been growing exponentially, even the developed countries have been unable to contain its spread. As a result, people are dying in the affected areas at an alarming rate. 

We cant even think how deadly the highly contagious disease will turn if it spreads from a moderate to a strong category in India or Bangladesh. 

Bangladesh is the most densely populated country in the world, however, to our concern, the healthcare facilities in the country are too limited to serve its 160 million-plus population. 

If we look at the sector-wise resource distribution of operating and development budget for the fiscal year 2019-20, we would see the health sector has received merely 4.9% of the total allocation. 
Meanwhile, the education and technology sector has received 15.2% allocation which is more than 3 times higher than the health sector allocation. Due to poor investment in healthcare infrastructure nationwide and scarcity of medical equipment i.e. testing kits, and doctors to combat Covid-19, the government is passing a very hard time. 

The government should act promptly to allocate further resources to healthcare infrastructure development to tackle this pandemic. Till now, there is no vaccination for this virus. Thus isolation and lockdown are the only means to stop the spread of this deadly virus. 

Bangladesh outlook
The unprecedented Covid-19 pandemic has caused disruptions to global trade, business, and education. Bangladesh is equally affected by this contagion. 
The economic consequences of the Covid-19 outbreak are tough to handle as the entire of the global supply chain has been interrupted due to worldwide transportation shutdown. 

Till now, the Bangladesh readymade garments (RMG) industry has received work order cancellations of nearly $3 billion. 

Around 2 million workers in the industries will be affected by this. Around 4 million people are directly engaged with the RMG sector e.g. backward linkage industries, accessories and packaging factories and transportation sector. 

The import and export-oriented companies are also at risk. The foreign remittance will come down and thus it will hit the foreign reserves of the country.

Bangladesh will fall into a really difficult situation if the country remains locked down for a longer period. Here, a huge number of people live from hand to mouth. Consistent high growth has been unable to create sufficient jobs in the economy. Due to inequality of income and asset distribution, the advantages of higher GDP growth is not evident in society. 

Recently, garment workers coming back to Dhaka amid the government-imposed shutdown and the risk of getting infected only revealed that due to disparity in wealth distribution these people are unable to stay at homes without work for their survival, thus, they are concerned much more about their job rather than Covid-19. 

The higher growth and increased per capita income have benefitted a small group of rich people much more than the much greater number of poor people. Now its the time for the government to think about this crucial issue and chalk out a long-term plan to minimise the disparity between the rich and the poor.

We all know the banking industry is in back gear due to mounting non-performing loans (NPLs). If the RMG industry and its backward linkage industries fail, then the entire banking system will collapse. Today, fifty-nine commercial banks and general insurance companies are heavily relying on garments and related industries for their business. 

The government has already declared a Tk5,000 crore incentive package to mitigate the losses in the RMG sector. However, if the outbreak prolongs it will be difficult for the government to handle the situation and the result of this will be catastrophic as more than 85 percent of the countrys export earnings come through the RMG sector. 

We could not diversify our export basket, thus creating a huge risk in our export portfolios. If we look at our RMG rival Vietnams export portfolios, RMG has earned one-fifth of its total export earnings. 

Their export basket is pooled with some other industries combination; thus they dont need to rely on only one industry. For sustainable economic growth, Bangladesh should have diversified its export basket o reduce the sole dependency on the RMG industry.   

Economic challenges
Due to uncertainties over the invention of vaccination to prevent the fatal, it is fully unpredictable to make a to-do list as lockdown or isolation is not the ultimate solution. 

On a larger scale, we may have to face an economic slowdown in the short term while there might be a recession in the long term. 

On April 5, Prime Minister Sheikh Hasina unveiled a Tk72,750 crore stimulus package, including the previously declared Tk5,000 crore package, to address the economic impacts of the coronavirus outbreak. 

The amount is nearly 2.52 percent of the countrys GDP. The government could take both fiscal and monetary measures to combat the novel coronavirus. 

As per the prime ministers bailout plan, fiscal actions included stimulus packages e.g. direct financial support for the affected sectors, widening social safety net coverage for poor people, food distribution at a lower price among the poor people, as well as increasing monetary supply. 

The monetary actions would be lowering the repo rate and reduction of the Cash Reserve Ratio (CRR) to increase the money supply to the economy.

The author is the Head of ICC, UniCap Securities Limited. He can be reached at: [email protected]

Top News

COVID-19 / Bangladesh / Economy

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Photo: Bloomberg
    The China-Russia friendship is too big to fail
  • Infographic: TBS
    DNCC hospital asked to keep isolation ward ready as Nipah spreads to 28 districts
  • Signage is seen outside of the Food and Drug Administration (FDA) headquarters in White Oak, Maryland, U.S., August 29, 2020. REUTERS/Andrew Kelly
    US FDA says India-made eye drop linked to some infections, blindness and one death

MOST VIEWED

  • Sketch: TBS
    How BIDA is ensuring investment growth
  • Index funds provide small investors with a low-cost, diversified investment option.
Photo: TBS
    Exploring the benefits of index funds for small investors in Bangladesh
  • Photo: Collected
    Pakistan’s revisionist tactics
  • Journalist Haroon Janjua. Illustration: TBS
    Can Pakistan face down a growing Taliban insurgency?
  • Illustration: TBS
    Diversifying products for economic prosperity
  • Dr Md Mafizur Rahman, managing director of SME Foundation. illustration: TBS
    SME Foundation: Underfunded, understaffed, yet forging ahead

Related News

  • A jackal farewell
  • Hong Kong says 'hello' to woo back visitors after Covid
  • FM Momen to join Sri Lanka's 75th Independence Day celebrations in Colombo
  • Pakistan’s revisionist tactics
  • Diversifying products for economic prosperity

Features

Andy Mukherjee. Sketch: TBS

What makes India's billionaires' support special for Adani

10h | Panorama
Photo: Rejaul Hafiz Rahi

A jackal farewell

11h | Earth
The trio spearheading the revival of book cover designs

The trio spearheading the revival of book cover designs

12h | Panorama
Six Jeep Wranglers and a special XJ Jeep Cherokee set out into the depths of Lalakhal, Sylhet for an experience of a lifetime. Photo: Ahbaar Mohammad

Jeep Life Bangladesh: A club for Jeep owners to harness the power of their vehicles

1d | Wheels

More Videos from TBS

A proper price formula can help investors to plan big

A proper price formula can help investors to plan big

1d | TBS Round Table
Rumors about Sarika that everyone thinks are true

Rumors about Sarika that everyone thinks are true

1d | TBS Entertainment
Mugging rife in Tejgaon, murder in Wari

Mugging rife in Tejgaon, murder in Wari

1d | TBS Current Affairs
What secrets are hidden behind Adani's wealth?

What secrets are hidden behind Adani's wealth?

1d | TBS Stories

Most Read

1
Bapex calls candidates for job test 9 years after advert!
Bangladesh

Bapex calls candidates for job test 9 years after advert!

2
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

3
Photo: Collected
Energy

8 Ctg power plants out of production

4
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

5
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

6
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

EMAIL US
[email protected]ws.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]