The global Coronavirus (COVID-19) pandemic has been sprouting a number of adverse impacts on countries as regards health hazards and economic slowdown. Bangladesh is already exposed to this health-threat and the country is at risks of several economic impacts. In view of this, targeted expansionary measures are needed to tackle this national crisis in the areas of healthcare, trade, supply chain management, public expenditure and monetary policy.
https://www.facebook.com/cpd.org.bd/videos/1468753046652118/
Expansionary monetary policy and reprioritising public expenditure are important to pursue. Specific budget allocation will be required for the sectors that will be effected by COVID-19. Furthermore, production and distribution of medicine, improvement of health services and availability of medical instruments as per requirement and safety of the health professionals needs to be ensured. Higher demand for cash incentives in the wake of COVID-19 may put additional pressure on the budget. Priority based reallocation in the next budget (for FY2020-21) needs to be considered to cope with the potential impact of COVID-19. The lower-income class, particularly who are dependent on daily wages, will be the most affected group from this pandemic. In this case, the government may consider to take specific incentive measures for them.
These observations were shared at a virtual media briefing on “Health and Economic Risks of Corona Pandemic and Recommendations” organised by Centre for Policy Dialogue (CPD) on 21 March 2020 at CPD Office in Dhaka. The briefing started with the keynote presentation by Dr Fahmida Khatun, Executive Director, CPD.
In her presentation, Dr Khatun pointed out that poor budgetary allocation (0.9 per cent of GDP) for healthcare sector has been a longstanding problem for Bangladesh. Government budget for health (as a share of GDP) is considerably lower than the targets stipulated in the Seventh Five Year Plan (7FYP) and World Health Organization (WHO) benchmark as the 7FYP target for health budget was 1.12 per cent of GDP while the WHO target is 5 per cent of GDP.
Dr Khatun mentioned that, among the healthcare facilities in Bangladesh only 5 per cent have emergency transport and about 22 per cent have alcohol based disinfectant facility. Financial mobilisation and required equipment are significantly inadequate to tackle national crisis as regards COVID-19.
If the current trend continues, total revenue shortfall in FY2019-20 may reach BDT 100,000 crore which can increase due to the economic slowdown for COVID-19 outbreak. Ready-made garments sector, leather industry, tourism sectors are likely to have a negative impact in this situation. The government should consider some temporary incentive packages for the affected sectors, said Dr Khatun.
Professor Mustafizur Rahman, Distinguished Fellow, Dr Khondaker Golam Moazzem, Research Director and Mr Towfiqul Islam Khan, Senior Research Fellow, CPD, were also present at the media briefing and shared their view and also answered the questions from the media professionals who attended the event.