Special Correspondent :
Economists on Tuesday urged the government to announce a ‘comprehensive’ economic stimulus package to fight a downturn in the country that is currently locked down to contain the spread of coronavirus.
They said the ongoing shutdown has already put businesses and industries on hold creating a big hole to the national economy as well as threatening livelihood of millions of workers, mostly of informal sector.
“The immediate impact of the shutdown is loss of jobs. More than 10 million people have already gone out of work due to the latest government measures to contain the virus,” Dr Ahsan H Mansur, Executive Director of Policy Research Institute (PRI), told The New Nation yesterday.
He said income of millions of informal workers has already collapsed due to the nationwide shutdown and it threatens their livelihoods, Dr Ahsan H Mansur, told The New Nation “In this situation, the government should announce an economic stimulus package that provides direct cash transfers and ensures food security measures, offering relief to millions of workers hit by the shutdown,” he noted.
Dr Ahsan H Mansur, a leading economist of the country, further said, the shutdown has already given a severe blow to both formal and informal sector of the economy. But the government recently announced Tk 5,000 crore package for the export-oriented sector, leaving out other domestic industries and businesses, which creates millions of jobs.
“The government should offer a ‘comprehensive’ package to compensate all economic sectors that turn vulnerable in the wake of shutdown and supply chain disruption caused by the global coronavirus outbreak,” he suggested.
When asked, Dr Ahsan H Mansur said, “Uncertainty has already created on the national economy as a spillover impact of the ongoing global crisis. A prolonging period of uncertainty in case of further spread of coronavirus will have huge detrimental impact on businesses and economy.”
The government has temporarily suspended international and domestic flights, bus, launch, train services, closed shopping malls, cinemas, and banned public gathering as part of its systematic plan to enforce nationwide shutdown to contain the spread of coronavirus.
“The coronavirus outbreak comes at a time when the national economy was confronting with various challenges. Now the economy goes under siege due to the shut down,” observed economist Dr Zahid Hussain.
He said the shutdown has made the poor and daily labourers most vulnerable. It also disproportionately hurt the informal sector and its workers.
“Besides, millions of more workers with those in tourism service, argo-processing, poultry, construction and retail sectors, and small and medium enterprises have also gone on leave resulting in their income loss. If the outbreak continues further, they will face more trouble unless the government announces measures to help recover the shocks,” he added.
Under the prevailing condition, Dr Zahid Hussain, former lead economist of World Bank’s Dhaka office, urged the government to announce a ‘comprehensive’ financial package for informal and formal sectors offering income support programme for millions of informal workers.
According to an official figure, there are around 50 million informal workers in the country and they are not insured under any social security scheme.
Informal workers often come from poor backgrounds and they have a little capacity to cope with the added shock of the shutdown.
“Bangladesh’s informal sector, the backbone of the economy, has hardest hit as economic activity comes to a standstill during the ongoing 10-day general holiday,” said Dr AB Mirza Azizul Islam, former Finance Adviser to the Caretaker Government.
He said the government should announce a temporary universal basic income scheme to support those who had been most affected by the lockdown so that they would have some form of cash flow in order to survive.
He further said they would undergo three continuous weeks with zero cash flow if the lockdown extends further.
“The government needs to move fast and to introduce some fiscal measures that can help money to flow into the bank accounts of those affected individuals and small businesses. Because their survival depends on daily cash flows,” Mirza Aziz said.
He further said that the government should announce a wider stimulus package, which along with higher disbursements towards healthcare and direct income support for informal sector workers and sectors such as travel, tourism, and airlines could be listed in short-term rescue plan.
“The health crisis and its economic fallout make it necessary for an urgent and emergency fiscal response, targeting severely affected sectors, poor, low-income and vulnerable families,” said Dr Khandoker Ibrahim Khaled, former Deputy Governor of Bangladesh Bank.
He said while the emergency fiscal measures would likely widen fiscal deficit, but such a measure is necessary to keep the national economy rolling.
The economists have also predicted a slowdown in GDP growth this fiscal year owing to falling economic activities, factory output and aggregate demands.
They said the coronavirus has so far affected manufacturing and export sectors and now the pandemic spread to most parts of the world would trigger widespread secondary effects on domestic economy and thus will significantly lower the GDP growth.
The government in June last year unveiled a record Tk 5.23 trillion national budget, targeting an economic growth of 8.2 percent for the current 2019-20 fiscal year.
