Al Amin :
The country’s economy is likely to fall at risk, if the earnings drop in remittance and readymade garments sectors, the two main pillars of the country’s economy, due to the second wave of the deadly Covid-19 pandemic.
Half-Yearly World Economic Outlook of the World Bank published in January also highlighted that the two sectors of Bangladesh are at risk. It has also forecasted that the economy of Bangladesh, the second-largest ready-made garments exporter, will suffer in the coming few months as global demand for it declines.
Terming the risk as temporary, economists, however, suggested expanding social safety net to face the unwanted economic situation.
Migrant workers are playing a vital role to keep the economic growth steady by pumping approximately $15 billion into the economy that directly contributes to the socio-economic development every year. Remittance sent home by the migrant workers is contributing 12 per cent in GDP and generating 9 per cent employment of the total active workforce. The pace of remittances in Bangladesh was also upward and the growth rate was double digits, even in the pandemic.
On an average, six to seven lakh people go abroad every year, but it was less than two lakh in the previous years. Moreover, a significant number of migrant workers have been sent back and many are in constant fear of being forced back due to the impacts of Covid-19.
Thus, the pandemic intensifies numerous socio-economic crises such as joblessness, consumption of reserve funds by family members, and shrinking of the country’s remittance inflow.
The country’s poverty rate also rose to 29.5 percent as of June, 2020 and the rate is widening day by day as the pandemic is being prolonged.
“This new poor people created by the pandemic are not like the traditional poor. For them, the government should provide financial support for the next three to four months,” Ahsan H Mansur, Executive Director of Policy Research Institute (PRI), told The New Nation on Monday.
Meanwhile, the country’s economic backbone readymade garment (RMG) export earnings, which typically contributed 84 percent to the national exports, dropped 2.99 per cent to $15.54 billion in July-December of the current fiscal year, according to data from the Export Promotion Bureau (EPB).
The total exports figure in the sector missed the target by 4.12 per cent with a 3.0 per cent year-on-year fall.
A nearly 4.0 per cent growth in cheap knitwear exports contributed $8.52 billion to the earnings from the apparel sector, while overseas sales of woven products plummeted by 10.22 per cent to a little over $7.0 billion, missing the target by 14.39 per cent.
“Our readymade garments sector may fall at risk in the coming three months and many factories are likely to be closed,” Mansur said.
The government should announce more stimulus packages to keep the RMG sector vibrant during this time, he added.
The step, should be taken at the moment to keep the economy vibrant, to increase cash inflow in the people’s hand to keep the country’s internal consumption expenditure on track is urgently needed, said Zahid Hussain, former lead economist of World Bank, Dhaka office.
“A large number of workforces have already lost their jobs and many of them are at risk of losing jobs. Many have shifted from urban to rural areas due to lack of income. Steps must be taken to employ them,” he added.
