Increasing foreign trade, inward remittance, FDI, overseas remittance for education, health, and service sectors over the past years have led our external sectors to contribute more than 30% of our GDP. Bangladesh, therefore, is now deeply connected to the concurrent world economy.
It could have been a possibility in the past to remain immune to a global crisis, when the economy was smaller and much more alienated, but now it is impossible to circumvent the effects of global phenomena.
Even if the Covid-19 crisis does not badly affect our domestic economy, the consequences of the pandemic might be very challenging due to the risks emerging in the global economy.
Hence, it is only natural to ask how Bangladesh will counter the aftermath of this crisis in an increasingly inter-faced economy. It is also reasonable to accept that in the political environment or ecosystem we are in, this can’t be a task for a political government of this nature either.
In our country -- government agencies, ministers, members of parliament, officials, even doctors or security forces look forward to only one person for critical decisions. Even in times of crisis, authorities vacillate to take up new decisions or foster unique ideas. Hence, it is asking for too much when we expect new ideas to come from a national or expert committee even if it is formed.
So, what will Bangladesh do? There are a number of things that need to be taken care of: Liquidity has to be ensured in the market, money has to be saved by postponing or deferring large scale development projects, international development organizations should be promptly approached for assistance, import lists should be reviewed and revised for essential commodities, and more rapport has to be built with international buyers rather than suppliers.
In order to ensure liquidity in the market, the central bank must design and follow an effective monetary policy. Again, it must ensure that the created liquidity does not find its way to the known “predators.” The expenditure management unit at the ministry of finance must be strengthened and empowered. By thoroughly reviewing all the ongoing large-scale projects, the planning commission must defer the lesser or least important ones. This is not the time to “play with the gallery.”
For example, the “capacity payment” issue of the power division can be reviewed with the help of the law and justice division, especially for rented power units.
The price of oil and many other commodities have gone down significantly in the international market.
Considering our current average purchase price of fuel oil, even if we can sign an agreement to buy half of our future crude or refined fuel requirement at a certain lower price or lock the price through the “Future Option” market for future deliveries, we can save a significant amount of money.
The same techniques can be applied in many other sectors. Countries with similar economic conditions, including India, do this often.
If indemnity works in case of buying electricity, then participating or operating in the commodities future market can be done as well.
Now, we come to the issue of immediately approaching international development organizations such as the World Bank, IMF, ADB, and others by drawing up proposals for the rehabilitation of poor people, immediate health care, and other essential projects. The race has already started.
The economic relation division, finance division, planning commission, foreign ministry, and if necessary, even the prime minister herself, must act promptly in this regard. Bangladesh ambassadors in Beijing, Tokyo, or our alternate executive director at the World Bank group can act as catalysts in these regards.
In the past few years, we have given great importance to culturing relationships with our import partners for several known and unknown reasons. Now, we need to focus on our relationships with China, Japan, and other large buyer countries and organizations. Even they can manufacture in Bangladesh, and import to re-export to a third country.
We can export sweetwater fisheries to China with their probable change in diet list. Our RMG sector can export Personal Protective Equipment (PPE) to Japan and many other similar countries including Europe. I cannot remember the last time our prime minister met with the chief executives of the top ten global buying organizations in the past 10 years.
As there are no final says in politics, there are beginnings but no ends in trade diplomacy. We can start with Uniqlo from Japan. Why not invite the head of Uniqlo for a discussion at the state guest house and request him to showcase all Asian Uniqlo stores with products made in Bangladesh? Why not introduce a “national discount” for the first time to make it happen?
Then invite, meet, and greet H&M and others. I believe something fruitful will certainly come out of it. Till now, we have invested our time and effort on Boeing, Siemens, Samsung, and Indian electricity companies to buy from them. Let’s start our day now with the buyers of Bangladeshi products, or by calling up the chiefs of global development organizations, or making the best use of our premier’s relationship with her Chinese or Japanese counterparts.
Bangladesh cannot lag. We must put our acts together. In the words of Bangabandhu, “Nobody can suppress us.” We will just bring more intelligence and newer tactics in our strategy to fight this war.
Mamun Rashid is a partner at PwC.