Published in Asian Age on Monday 15 June 2020
Jobs creation, poverty checking emphasized
Measures to benefit industry-migration from China also focused on
Covid-19 has been affecting low-income groups, largely turning many people into poverty. If the present situation continues, the number of poor people will stand at around 43 percent. In order to address the situation, the government has to take a set of measures, including slashing administrative expenditures and stopping funding in less important projects.
A webinar organized by the Center for Governance Studies (CGS) came up with the suggestions on Sunday. It was attended by economists, businesspersons, politicians and journalists.
Dr Rashed Al Mahmud Titumir, noted economist and a professor of the Department of Development Studies at Dhaka University, presented the keynote paper on the proposed budget for the fiscal year 2020-21 and the Covid-19 situation.
He said, ”Covid-19 is not affecting all groups equally. Low-income people are becoming the worst victims, losing job opportunities. If the situation continues, as many as 43 percent people will go below the poverty line as per international standards. If the situation lasts long, the figure may cross 47 percent. It could be brought under 40 percent if the situation is managed properly.”
”If expatriate Bangladeshis become jobless, it will create pressure on villages. That is why attention has to be given in diversifications of productions,” he added.
The GDP growth target– 8.2% set for the next fiscal year — is not achievable, said Dr Fahmida Khatun, executive director of the Center for Policy Dialogue (CPD).She stated, ”One of the major indexes of GDP is investment. Investment target in the private sector has been fixed at 12.7% in the revised budged of the current fiscal year, which has been fixed at 25.3 percent for the upcoming fiscal year. To achieve this investment, Tk4.46 trillion will be needed. The credit flow for the private sector has been fixed at 16.7 percent for the next fiscal year, which is not enough to achieve 25.3 percent investment.”
Economist Selim Jahan said, ”Bangladesh has 5% allocation in the national budget for health sector, which is 17% in Vietnam. Many people are becoming jobless due to the situation. Importance has to be given on how to create new job opportunities.”
Abdul Matlub Ahmed, former FBCCI president and president of India-Bangladesh Chamber of Commerce and Industries (IBCCI), said, ”It is difficult to place a budget in the present situation. The government has given importance to domestic industries, agriculture sector and marginal-small-medium business communities to keep the wheels of the economy moving. That is why taxes on many raw materials have been reduced. Corporate taxes have also been cut to help the big business groups or people.”
Shoeb Chowdhury, vice president of IBCCI and director IBFB, criticized the proposed budget and said, ”The public administration sector has been given the highest allocation. But many countries have slashed allocations for public administrations and taken austerity measures. Slash in agriculture budget was regrettable. Allocation in the health sector is not enough.”
”If oil prices come down, expatriate Bangladeshis will lose jobs. They will need jobs in the country. They will need to develop their skills to go abroad further. The finance minister did not say anything clearly on the issue. The government should come up with measures and allocate funds to take the opportunity of industry-migration from China due to US-China trade war and exit policy of Japan an EU from that country.” he added.
Shoeb Chowdhury went on to add, ”Banks have huge investments in the garments sector. There is no directive from the finance minister on how the money will be brought back to the lender banks. There are no specific initiatives to boost stock markets. There is scope to whiten money. But we know that it did not work in the past.”
He said, ”One third of the proposed budget will come from grants and loans. Fifty percent will come from taxes. It is difficult to collect taxes in this situation. Finally, I would like to say the proposed budget is not well-furnished.”
BNP standing committee member and former commerce minister Amir Khasru Mahmud Chowdhury also spoke at the program as guest of honor. He said, ”The health sector is vulnerable. Hospitals are turning back patients. Hospitals lack life saving equipment, including ventilators. We failed to save life and livelihoods.”
”The number of poor people has already increased significantly. They need cash to ensure demand-supply of the economy. The government has announced bank-based stimulus programs for different sectors. But banks cannot provide money,” he added.
Amir Khasru also said, ”This is not the time to allocate money for mega projects, including the Ruppur Nuclear Power plant. The economy will be strengthened if the money goes to people. The garments sector needs attention.”
Agriculture minister Dr Abdur Razzak spoke on the occasion as the chief guest. He said, ”The Covid-19 outbreak has brought the world to a standstill. Economists say that the world may face a food crisis and famine. The economy of Bangladesh has also been facing the same brunt. However, the government is ensuring food and social safety.”
”There is no crisis in rural areas. Farmers are getting fair prices for their produce, including paddy, mangoes and litchis,” he added.
The minister went on saying, ”We are to go ahead considering life and the livelihoods of people against the backdrop of the Covid-19 situation. That is why the government has eased the situation.”
Dr Abdullah-Al-Mamun, teacher at the Japanese Studies Center of Dhaka University, Syeda Rizwana Hasan, chief executive of Bangladesh Environment Lawyers’ Association (BELA), veteran economic journalist Zahiduzzaman Faruk, FBCCI director Abdul Haque, Nasreen Awal Mintu, founder president of Women Entrepreneurs and Monoj Kumar Roy also spoke at the webinar.
Popular TV host and executive director of CGS Zillur Rahman moderated the program, which was presided over by CGS vice chairman Dr Manzur Chowdhury.