Published in The Daily Star on Wednesday 6 May 2020
EYE ON BUDGET
How should a budget during a pandemic look like?
The searing devastation of coronavirus all over the globe has called for extraordinary measures from governments worldwide. And Bangladesh is no exception.
And it is under the tall shadows of the minuscular virus that the finance ministry has set out to frame the fiscal measures for the next fiscal year, set to take effect from July 1.
The need of the hour is policymakers come out of their known territories and typical drawing board to take the economy back to its high-growth trajectory.
To get a read of what should get top billing in the Tk 550,000 crore-budget for fiscal 2020-21, The Daily Star asked seven economists and all but one said cited the health sector.
Providing livelihood support to the poor and low-income people to prevent them from hunger came second, followed by ensuring enough investment in agriculture to ensure food security as dependence on the international market might cost the nation a lot in times of need.
And all of them wanted the government to trim vanity and least urgent projects under the Annual Development Programme (ADP) so that the current crisis can be overcome by optimum use of resources.
“Bangladesh has never framed a budget in such an uncertain environment since its independence,” said Zahid Hussain, former lead economist of the World Bank’s Dhaka office.
While there was scarcity just after independence, there had been no such uncertainty.
“So the priority would be to win the war against coronavirus to restart the economy,” he said, adding that the infection rate is still increasing in Bangladesh and is yet to hit a point of inflection.
He cited public health experts and said 20,000 tests should be done daily to contain the disease.
“We are at risk. So we will need a clear strategy and work plan for increased testing, contact tracing and isolation. Based on this, we need to estimate resource and the financial requirement to do the job. We have to do it. There is no scope of a trade-off here.”
These are preconditions to restart the economy.
“It should not be seen vaguely and you have to give attention to every single detail and prepare the budget,” Hussain added.
Health must be at the centre of all efforts for at least the next six to eight months, said KAS Murshid, director general of the Bangladesh Institute of Development Studies (BIDS).
“It is vitally important that we do not let the contagion get out of hand.”
A large-scale health debacle will demoralise the public, cause panic and make it difficult for the economy to be restored.
“Without some kind of minimum confidence level among the public that they can get treatment if they get infected, it will be difficult to open up the economy on many fronts. Thus, we will need to give health and the health-related economy our highest priority this year.”
The need of the hour now is to improve the delivery of public health services and access of citizens to testing and treatment.
Mass testing must begin rapidly.
“Many countries are doing this, including Senegal, using cheap kits. If we can produce it domestically, it would be best,” he added.
The pandemic has exposed the dismal state of the public healthcare system, said Fahmida Khatun, executive director of the Centre for Policy Dialogue (CPD).
“Our capacity now seems like a drop in the ocean,” she said, adding that the health sector never received due attention from policymakers.
Public financing as a percentage of GDP has been declining since 2011 and stood at 0.68 per cent in 2015, showed the Bangladesh National Health Accounts (BHNA) 1997-2015. It stood just above Pakistan amongst all the SAARC countries.
Negligence to developing healthcare facilities in the public sector has resulted in such a crisis of today, said Ahsan H Mansur, executive director of the Policy Research Institute (PRI) of Bangladesh.
“Whatever is needed for the health sector should be done,” he said.
Policy and institutional reforms are also needed, said Hossain Zillur Rahman, a former adviser to an immediate caretaker administration.
A big budget is also needed for secondary cities like municipalities so that they can provide health services, he added.
A total overhaul of the health sector is needed to ensure all sorts of modern healthcare facilities up to the union levels, said Salehuddin Ahmed, a former governor of the Bangladesh Bank.
“Because erosion of health leads to erosion of income,” he said, while also recommending the introduction of health insurance.