• Wednesday, Feb 08, 2023
  • Last Update : 10:24 am

Economy to shift back to top gear in 2021

  • Published at 07:47 pm January 2nd, 2021
Gridlock in Dhaka city <strong>Syed Zakir Hossain/Dhaka Tribune</strong>
Syed Zakir Hossain/Dhaka Tribune

'We pray that the second wave of Covid-19 would have a nominal impact'

2020 will go down in history as the year in which Bangladesh showed its strength in depth. 


Its tremendous growth momentum did not come to a screeching halt like its neighbours did but just shifted into second gear.


In 2021, the economic growth engine will invariably be revving fairly highly, but to hit the top speed, effective vaccine management is needed.


There are challenges in procurement, storage and skill to vaccinate people, said Zahid Hussain, a former lead economist of the World Bank’s Dhaka office.


So, to tackle these challenges, the management of vaccines is the key, he added.


“If our workers and employees stay safe and healthy, the wheels of the economy will remain roll on,” said Faruque Hassan, a former vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).


However, another round of stimulus package would help.


“Due to the second wave of the pandemic, economic recovery is delayed. So, the government has to think of a second stimulus package, especially for the garment and SME sector,” said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh. 


The new package should target those entrepreneurs who did not avail loan and who are out of the banking channel, he added.


“We pray that the second wave of Covid-19 would have a nominal impact,” said Sheikh Fazle Fahim, president of the said Sheikh Fazle Fahim, president of the Federation of Bangladesh Chambers of Commerce and Industries.


The cottage, micro, small and medium enterprises, who contribute significantly to the rural economy and employment, did not get the financial support from the stimulus package properly, according to Hussain.


“Taking lessons from 2020, the government should take steps to provide financial support to these people so that they can turn around from the crisis and restore employment,” he added.


The government’s revenue generation capacity though can limit the response: revenue saw a 5 per cent growth against the expected 11 per cent, Mustafizur Rahman, a distinguished fellow at the Centre for Policy Dialogue.


“It testifies that economic health is not good both in exports and imports. So, private sector investment is very crucial for 2021 in recouping from the pandemic.”


Subsequently, he called for stimulating private sector investment, which is hovering around the 9 per cent-mark against the target of 14 per cent.  

The business people called for extended credit facilities as the bigger challenge is cash flow.


“With the current status of the business scenario, it is quite impossible for business people to pay the instalment or repay the loans. So, the government should take steps to extend the moratorium period,” said Abdul Matlub Ahmed, chairman of Nitol-Niloy Group.


On the other hand, banks should support the SME sector, he added. 


Policy support should be given to the productive sectors in the form of lower tariff for procurement of raw materials and to keep the products’ prices competitive for both domestic and export markets, said Azam J Chowdhury, chairman of East Coast Group. 


“We are confident that all support needed for recovery in 2021 and 2022 will come along,” Fahim added.

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