Bangladesh seeks emergency support from IMF, WB to overcome Covid effect

Volunteers carrying the corpse of a COVID-19 victim for burial at the graveyard in Dhaka

Dhaka, June 1 (IANS) The Covid-19 crisis is having a devastating effect on all social, political and economic sectors of Bangladesh, said politicians and eminent economists of Bangladesh. They told IANS that the Bangladesh government has already taken emergency steps, which will help overcome the crisis.

But that is not enough. The Bangladesh government should take well-organised steps to tackle the post-coronavirus crises that the country”s economy will face.

The Asian Development Bank (ADB) is providing a grant of $231,178 to augment the Covid-19 related facilities in 134 urban primary health centres.

Experts fear that the inflow of remittance might fall further in the coming days if the pandemic continues.

Atiur Rahman, a development economist, writer and former Governor of the central bank of the country, Bangladesh Bank, told IANS: “The negative impact of Covid-19 is damaging our economy, which is a big challenge. The revenue will be less than 1 lakh crore Bangladeshi taka (BDT) this year. While the tarrif of international trade is stopped, the revenue decreased because international trade has been discontinued.”

He said that remittance inflow would drop due to the coronavirus pandemic and to improve the situation, the central bank had taken measures to fight the economic crisis caused by Covid-19.

The flow of inward remittance dropped by nearly 25 per cent in April following the coronavirus outbreak in different parts of the world, he said.

Remittances from Bangladeshi nationals working abroad were estimated at $1.08 billion in April 2020, registering a fall of $353 million from the same month a year ago.

“We could not continue the business of international trade. The country”s economy may face an extra pressure in the near future if the falling trend in inward remittance persists,” Rahman said.

He added that Prime Minister Sheikh Hasina has distributed a total fund of 2,500 crore BDT among 50 lakh families through the mobile financial services (MFS), which is not enough. It should extend to each of the 1 crore 50 lakh destitute families affected badly by the Covid-19 outbreak.

“But we shouldn”t be too afraid. We can find out the way to overcome the crisis,” he added.

Rahman said although the initiative of the Prime Minister will help overcome the crisis, the government needs to take more emergency measures.

Bangladesh is very smartly asking for emergency support from the International Monetary Fund (IMF), ADB, World Bank and AIB and they are responding positively, which is a better strategy because these financial supports are long term and low cost, he said.

Rahman said if Bangladesh is prepared for more reforms, it could get bigger amounts. Especially, the budget for the health sector should more than doubled. Of the total allotment for the social protection sector, which is 2.3 per cent of the total budget for the financial year, 35 per cent goes for the pension of the government officials, which should be increased.

“Besides this, minimum 2 per cent of the total budget must be for the social protection of the poor. And till now, only 5 per cent of the total budget is meant for agriculture, which should be at least 10 per cent. I believe that if we go with this strategy for the poor economy, we will do better than others,” he said.

The strength of Bangladesh is agriculture and rural economy. On April 30, ADB approved a concessional loan of $100 million to support the government of Bangladesh in its efforts to address the immediate public health requirements of combating the Covid-19 pandemic.

The President of the Communist Party of Bangladesh (CPB), Mujahidul Islam Selim, said that the government should provide adequate allocations to the health and agriculture sectors in the upcoming budget. “Already it is clear that there”ll be a big blow to politics and economy,” Selim said.

“At the same time, the leaders of the ruling party are looting and grabbing money. The nation is seeing how people accused of serious offences are fleeing the country by chartered planes, violating court orders,” Selim said.

He added that although such people form a very small part of the society, they are depriving people of their basic rights. By increasing bus fair by 60 per cent, the government has proved that it is not with the people, he said.

The CPB leader said, “This ”fascist” government is going to destroy the middle class and hard working poor people, and those who send remittance from abroad, these people are the backbone of the economy.”

About the activities of the other political parties to make the government accountable, he said, “These are special times, we cannot protest like before. But we are working for the people. We have sent 10-12 memorandums demanding people oriented methods. The government and the politicians must work for the sake of humanity.”

The experts also suggested that the Finance Ministry should form a team comprising experts to overcome the crisis.

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