The whole world is now gripped by not just a health pandemic, but also an economic crisis. Each country is faced with unique and unprecedented economic challenges and will have to reflect on how they can best navigate through them.
With others countries preoccupied, no external support should be expected from them.
Bangladesh also needs to focus on becoming more self-reliant and do what needs to be done to prop up the economy.
Bangladesh can be thought of as a business entity. It must therefore now focus to increase its earnings, which means incoming USD, and reducing its expenditures, the outgoing USD.
This means Bangladesh should focus on replacing as many import substitutes as possible, increasing food production, making healthcare a national security apparatus, and a distinct focus on skills-based education required for the country to move forward both during and post Covid-19.
Proper utilisation of national resources, capital, and infrastructure are the most important components for Bangladesh to move forward after the pandemic.
This is a national emergency for nearly every state in the world, and therefore global purchasing patterns will change.
Bangladeshis therefore must work together to survive on their own. It is not about the individual, rather about how the equity of our society is brought up by increasing the standard of living as a whole.
Dealing with the international economy
As global purchasing patterns change, world economies will most likely be more inward looking and require countries like Bangladesh to adapt fast to meet the changing economic demands.
Now is the right time to focus on proper utilisation of our national resources, economic capital, and infrastructure in a manner that is able to feed society as a whole, as well as provide the minimum sustainable living.
When national emergencies such as these sweep the world, capitalism takes a back-seat and allowed for some socialistic measures to be taken at-least till the crisis is overcome.
Capital reserves are important to keep our exchange rate balanced, remain liquid in terms of crisis, and give confidence to investors of our market.
This will also help to expand our ability to diversify and strengthen sectors that require investment for future dividend like healthcare, education, food etc.
If one looks at Bangladesh as a business entity, it must first and foremost take a glance at its dealings with the external world.
In short, what it can do to keep the capital reserves least affected?
Bangladesh must ensure efforts to keep exports and remittances flowing and take measures to cut avenues of imports that we can do without for now, which would include assessing those non-essential products.
At the outset, we should be focusing on three main areas to make this happen:
i) Replacing the import substitutes with special focus on reducing import of luxury goods by encouraging suppliers to manufacture locally
ii) Increasing food production at almost all levels and ensure the unemployed to work in this sector after the pandemic
iii) Focus on suitable skills-based education in the domestic and international markets.
The graph shows that Bangladesh's current account balance has been negative post Q22016. Import substituting will help the situation and converse important forex reserve especially with projected fall in exports (up to USD 3 Bn drop in RMG/Textile already with situation expected to deteriorate further) and expected drop in remittances (Bangladeshis are coming back within the COVID-19 scenario and more can be expected. February 2020 already saw a USD 183 Mn drop compared to January)
• Farmers should be encouraged to grow food with further subsidies and incentives;
• Seed manufacturers should get priority to distribute and develop more varieties for all-year farming
• Distribution centres should be made in every district where farmers can go to sell their yields and get better prices and services
o Centres should be separated by fresh produce, dry, meat
o Each centre should have cold storage facilities
o Items should be taken to processing centres for hygiene and re-distributed to super shops, local community bazaars, online groceries, and smaller stores via digital platforms etc.
• All logistics providers should be segregated and separated into different districts on a fixed rate basis approved by the government
• Increase local production of imported food items by providing seeds, fertilisers and proper equipment support through technology and monitoring in partnership with private sector
• Increase food production of fruits for entire community to build better immunity (Bandarban soil is one of the best to grow fruits)
• Private hospitals should work together in a PPP approach to ensure proper service and knowledge transfer for the betterment of the healthcare sector
o Rehiring doctors and nurses temporarily who were suspended or lost jobs.
o Incentivise retired doctors and those who are currently out of employment to participate in this Covid-19 crisis,
o All hotels, guest-houses, and convention centres that are now closed due to Covid-19 should be make into makeshift quarantine zones at transparent approved rates for doctors, nurses and incoming passengers from abroad. Preparation should be done for the future as well.
o PPE requirements for each hospital are to be administered centrally and supported through call-center and ensured by administration. Importers of PPE, Manufacturers of PPE, Logistics to delivery, call center and e-commerce platform for taking requests through the corona.gov.bd website
o If necessary, international tender should be floated to bring in doctors and nurses, who have the expertise to deal with this crisis, to provide training and build up skill capacity. The administration can do a national call for nurses/doctors just like how defense personnel are recruited which will also create more employment opportunities.
o Food can be supplied from kitchen restaurants to hospitals that are hygienic by giving work to restaurants in each area through floating tenders/or approved published rates with a set menu. Each restaurant must undergo a cleaning by recommended partners, hygiene training with raw materials of food only supplied from approved distribution centres. This can ensure minimising the massive layoffs by restaurant industry. Logistic providers can participate to deliver.
• All universities and schools should be encouraged to go online with Live classroom facilities and video on demand in preparation for long term impacts as well as for continuing education.
• Video streaming platforms should be supported with hardware technology using national data centre to allow verified educators to create content and develop a new source of earning (virtual coaching centres)
• Data centres should to be equipped with necessary storage / CDN servers to support traffic
• ISP/telco to be encouraged to come up with packages that are affordable for online education services
• Exams and class-tests are to be taken for expected grades, which will account for students to sit for actual exams once situation normalise. Software for examination that can be developed IT companies in Bangladesh which can be utilised for testing purpose in preparation for long term impacts in education sector.
• Online courses related to skillsets that shall be required post Covid-19 can be developed and incentivised by registered users to learn by providing monetary rewards.
• When global economies do resume and start hiring labour, Bangladesh should be prepared by developing skilled workers who can support digital economies.
• Due to isolation, boredom has increased and so has domestic abuse. Everyone needs to be kept busy, so focus must be on expanding video streaming technology across Bangladesh
• Make specialised packages with ISP/telco to increase distribution reach across the country that is affordable for users to access video streaming.
• Introduce games that children/adults can play online or phone. Promote local gaming companies.
• Use radio as well to increase audibles so people can listen even without internet.
• Our musicians can host virtual concerts that can be channeled throughout various social media/TV channels/OTT channels.
• This will enable a new generation of content creators among the youth who can have a form of income and create new forms of self-employment opportunities at scale.
• Creative skills such as video editing, graphics clipping, sound engineering, background music artists can be encouraged not for local entertainment industry but also
• Too much negative news all around is impacting mental well-being of people. Regular educational TV commercials and news breaks should be developed of 2-3 minutes each that related to how one can develop his/her immunity (as well as mental health) to fight Covid-19.
• A homogeneous 1-hour live television shows that shows exercises, yoga and diet to boost immunity should be aired every-day at all channels in the morning which all can be streamed online.
• Therapy with psychiatrists through hot-line numbers can be established or apps who are supporting mental well-being be further supported.
• Mosques should be used for broadcasting positive messages, social distancing measures, etc. in neighborhoods throughout the day at regular intervals.
• Replace products that cause outward flow of USD by paying particular focus on investment in the following-
o Email, Server, Cloud storage, (ask the best of the best brains (NRBs and local talent) to deploy and develop
o Telecommunication tools such as zoom, google hangout dependencies can be replaced for local businesses
o Encourage more Mobile Phone, TV and electronics Assembly
o Start producing the necessary component manufacturing for hardware of smartphones, TV, etc.
o Assembling Medical Devices.
• Finance sector needs to be consolidated and digitised to the fullest extent to reduce the dependency on physical branches & paperwork.
• Mobile and online banking to be encourage for all banks
• As banks face financial crisis during the next few years, depositors can also be incentivized to higher interest rates for increasing tenor of their deposits which can be subsidised by Bangladesh Bank. Or else, a banking rush in the short-term would be very likely.
• Interests to be blocked/capped so that the interest amounts do not increase more than principal amount and we are in a constant downward cycle
• All previous loans need to be segregated with relief programs so that a reset for genuine entrepreneurs who suffered due to market can restart fresh to create employment and business opportunities to increase countries foreign currency earning
• Specialised fabric to make PPE and masks should be brought in to manufacturer locally
• RMG sector needs produce as millions will be required for export market
• RMG sector should look into chemical treatment of fabric that allows one way breathability as new wave of fashion clothing will emerge in post-Covid-19
• Entrepreneurs should look to replace import substitute to products by allowing to import raw materials tax free to produce for the local market products
o Footwear/Metal Accessories for bags
o Furniture tool for finishing
o Metal CNC machines for finishing of metal accessories
o Raw material and machinery to produce PU/upholstery for furniture/curtains
o High grade paint material for hospital and plastic for hospital bedding
o Molding making machinery
o Raw Material related for hardware related to computers/servers/equipment
• Manufacturing solar panels or renewal energy to reduce dependence on oil / imported coal
• Agriculture machine productions
o Tools and Equipment
o Harvesting equipment
o Hydroponic systems for growing crops in doors
Social Safety Net
• Distribution of social safety net should be done under immediately implementable PPP partnerships.
• All social safety net financial assistance should be distributed through mobile wallets directly monthly by having people register with their NID.
• Worst impact regions should be prioritised through the vast NGO network by separating out work through different NGOs. Carve out and conquer.
• Real estate in major cities can be built to move all slums into buildings through a welfare housing program
• Real estate for service holder professionals should be built so that those working for the nations essential services are not subject to rental threats from private landlords
With this approach, mass employment can be created through opening up avenues and various capacity developments. The new economy can be adapted to overcome this crisis sooner than later and we can become more self-reliant and more resilient.
Fayaz Taher is a serial entrepreneur, investor and mentor, co-founder of Startup Dhaka, Magnito Digital, director of Fortuna Group and COO of Bongo.