The Covid-19 pandemic has broken out all over the world. As there is no certainty when it will be eradicated, that’s why we may have to wend a long way. Redemption from the indescribable coronavirus pandemic will be seen after the end of all troubles. But it is a bitter truth that the juncture created by Covid-19 has already created economic, social and mental crisis for our country which will lead us to more vulnerable situation. A question has arisen among all the expertise on economy that where our economic condition will go due to this pandemic?
The pace at which Bangladesh’s economy was advancing is exemplary for developing as well as underdeveloped countries of the world. Bangladesh hoped, in the current financial year, the GDP growth will be 8.2%. The World Bank says, now in this period the economic growth of Bangladesh will be 2 to 3%. The situation will get worse in 2021.
The three main sectors of the economy of Bangladesh are service sector, industrial sector and agriculture sector. According to the Bangladesh Bureau of Statistics, the contribution of the service sector to the GDP in the fiscal year 2018-2019 was 51.19%, 34.4% of the industry, 13.7% of the agriculture. Last year, remittance income was more than 18 billion dollars. Bangladesh exported 3,412 crore dollars worth of readymade garments. But this year, every sector of our economy has been hit hard badly by the pandemic.
Exports and remittances are the two main driving forces of Bangladesh’s economy. As the global economy is paralyzed by the coronavirus and the developing and underdeveloped countries like Bangladesh is not excluded from this. So, Bangladesh’s exports are under threat. Readymade garments sector is one of the weighty sources of export earnings. It’s contribution to the country’s exports is about 80%. Europe and the United States, the main buyers of our readymade garments, have stopped purchasing garments for being infected with the coronavirus. BGMEA said, during the crucial production season of the year, buyers have cancelled purchase orders worth Tk 25,000 crore. If exports stop, garment factories will have to incur huge losses. Small factories can go bankrupt. Allegations of layoffs have already been received. If the export income is disrupted, the economy of Bangladesh will be in danger to cope up with its forthcoming pressure.
Remittance is the second largest sector of our economy. Its contribution to GDP is more than 5%. One crore of our expatriates are under threat due to the pandemic. Millions have returned to the country, many are laid off, business is closed. If there is no stagnation in the global economy, many more expatriates will have to return permanently to the country. On the other hand, as remittance income decreases, so the unemployment rate of this proximity will increase.
Already a section of the working class in the informal sector has become jobless. Adding this number of expatriates to the country, the number of net unemployed people is increasing rapidly. The remittance image is now downward- the impact of which will put Bangladesh’s economy at risk.
The banking sector is an important segment in keeping a country’s economy afloat. The condition of this sector was deplorable even before coronavirus. The sector, ploughed by liquidity crisis, lack of good governance, and thousands crore of taka is in debt default, is going through an unspeakably anarchy. This mattered sector is in a more severe crisis due to pandemic. Now people usually do not keep money in the bank but withdraw more. In consequence, this will increase the liquidity crisis. In addition, the banking sector will be in turmoil if the loans given during pandemic turn into a defaulted loan. Even banks that have a capital deficit will find it difficult to survive.
Depending on agriculture Bangladesh has become almost self-sufficient in food security. Food security will be considered as an important issue in the post-coronavirus world. About 40% of the country’s people depend on agriculture for their livelihood. This sector is also being affected by the Covid-19 pandemic. The sale of many agricultural commodities has stopped due to the closure of almost all hotels and restaurants. Also cultivators are being deprived of the fair price due to the lake of proper management. If farmers continue to count losses, they will lose interest in farming. As a result, a large part of them will become unemployed and there will be a food crisis.
Along with other sectors, the manufacturing sector will also be at risk, especially for those who import raw materials from abroad. They are now unable to import raw materials due to the lockdown situation – which will have an impact on the economy.
Owing to the pandemic, our capital market will collapse. The current situation of the market is also very fragile. Surviving in the capital market after the coronavirus pandemic will be a big challenge.
Construction work of mega development project adopted by the Government of Bangladesh such as Padma Bridge, Metro rail, Rampal Power Station, Coal based Power Station, Flyover etc. may be hampered because of the pandemic. In case of economic recession, development projects may have to be stopped in the interest of saving the population. In addition, the raw materials of these projects have to import from abroad. If the global circumstances don’t remain normal, the import of raw materials will also face restrictions.
Above all, unemployment and poverty will increase, people’s income and overall expenditure will decrease, the banking sector will collapse, the country’s growth will slow down in the post-coronavirus Bangladesh.
But it is a matter of hope, such pandemics are not new in the history of the world, rather have happened in the world before. Mankind has overcome the recession with its own efforts and has moved towards a reinforced economy. They have healed their wounds and once again made them self-sufficient. Bangladesh also has to walk that path. For the sake of that, Bangladesh Government should take deliberate steps and have to play a strict role in the implementation of these steps. Alongside, the people of the country should obey the orders and rules imposed by the government keeping confidence in the government decision. Only then, it will be possible to move forward in the face of such impending downfall of the economy.
(Sumona Mridha, student of Dhaka University)
