Published in Dhaka Tribune on 4 October 2020
‘Exports, remittance, agriculture lead path to economic recovery’
For the restoration of poor people’s livelihoods lost by the Covid-19 pandemic, the revival of non-farm enterprises and urban informal businesses are, however, essential, they added.
Bangladesh’s economy would recover quickly as exports bounced back, remittance and food production showed resilience, economists said in a webinar.
For the restoration of poor people’s livelihoods lost by the Covid-19 pandemic, the revival of non-farm enterprises and urban informal businesses are, however, essential, they added.
Eminent economists made the observations at the concluding session of a three- day virtual international development conference on “Covid-19 and Development Challenges”, organized by the South Asian Network on Economic Modeling (Sanem) concluded on Saturday.
Sanem executive director Selim Raihan moderated the conference.
“What concerns us most is the lingering effect of the lockdown on the prospect of economic recovery and restoration of livelihoods of the poor under the ongoing health crisis,” said Prof Wahiduddin Mahmud.
There are silver linings for economic recovery of Bangladesh as its economy does not depend on tourism and hospitality sectors, unlike those of the Maldives and Kenya, said Mahmud, also a former advisor to a caretaker government.
“Bangladesh’s main exposures to the global economy are earnings from RMG exports and remittance from migrant workers,” Wahiduddin said.
Garments exports have already been recovered to the pre-covid level, due mainly to accumulated postponed work orders or initially canceled by global buyers, said the economist.
Even the export prospect for the coming years does not look too bad despite the sluggish global market. Bangladesh is the second largest exporter of RMG after China. It is a competitive advantage for Bangladesh, he added.
There has been a surge in remittance flow in recent months and the government is encouraged by it, as migrant workers are remitting to their families. It may slow in coming days but still sufficient to help economic recovery, hoped Mahmud.
Rice production is pretty good and it is helping out achieving food security, although farmers are facing marketing problems of their produce, he added.
Eminent economist and founder chairman of the Centre for Policy Dialogue Professor Rehman Sobhan stressed on integrating informal sector with formal sector to restore businesses of the sectors through proper policy support.
“The notion that exists in South Asia regarding reducing poverty, which is largely derived from improved GDP growth, has to be reconsidered” said Rehman.
“There should be strategies to integrate the informal sector into the formal economy and acknowledge their contributions,” he added.
Discussing the issue of poverty measurement, Rehman said, “Covid-19 pandemic has demonstrated the vulnerable economic status of the people living slightly over the poverty line.”
At the program, Mahmud called for revival of rural enterprises for restoring the livelihoods of poor people.
“The lockdown was not much effective in rural and semi-urban areas but it seriously affected many non-farm enterprises that cater to urban markets due to disruption of transport facilities. It contributes a lot to rural livelihoods. Many of such enterprises have lost working capital and faced closures,” said Mahmud.
A revival of rural non-farm enterprises and urban informal businesses are essential for restoring the livelihoods of poor as merely reviving the GDP growth would not help their causes, he added.
Putting stress on effective governance, he remarked, “Due to lack of credible representatives, local government has always been a problem in Bangladesh.”
In response to a question, Prof Mahmud said, “Bangladesh has one of the most diverse rural sectors which cannot absorb urban workforce which is a reversal of the development process.”