A V-shaped economic recovery is still within reach. But the general public must play its part.
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Parkash appeared to be sympathetic to the government’s compulsion. But a staggered opening would have been judicious.
“One needs to really understand that both lives and livelihoods are very important.”
Risks from coronavirus are high, but the demand to protect the livelihoods of particularly the day labourers, the informal workers and the daily wagers are important, too.
“You know, when you have a situation where, yes, less people are dying, but imagine if we have more people dying of hunger. It’s a difficult choice to make,” he said, while advocating striking a delicate balance between normalising socioeconomic activities and containing the spread of the virus.
So how can the government find the balance?
He suggests ramping up of the health care procedures, such as testing, tracing and identification, as well as the systems and supplies.
And the non-health-related actions would be to ease up the supply chains, logistics, and the speed of the movement of the essential goods and services.
“We have to be pragmatic while letting the economic activities start but maintain the basic health instructions so that whatever gains have been made over the years, we should not let this coronavirus outbreak lose it. The goal should be to sustain the progress that you have achieved so far.”
Which brings us to the topic of what can be done to build on the progress before the pandemic hit in the medium- and long-term.
Parkash feels the pandemic has given the government to reset it industrial policies and many other development goals.
Diversification of the export basket now seems a real possibility, given the shipment of medicines, PPE kits and face masks of late. And there have been talks of export of medical equipment like ventilators, too.
And then there is the matter of companies looking to relocate from China and into new places, and the government should give an honest shot at attracting some of those companies by rolling out the red carpet.
“What I am trying to say is that this pandemic has given us a lot of challenges. But at the same time, I also see that it is opening up several opportunities.”
For starters, the government must bring down the cost of doing business. After that, the government should go for some targeted industries and provide the incentives, support and skilled labour.
It is the latter that is most fundamental in making the most of the country’s coveted demographic dividend.
“Bangladesh has done well in primary and secondary, but where you really need to invest now is in tertiary education, skills development, skills education, internships. I also feel another area the country can invest in is new technology.”
Parkash is a great believer in new technologies.
“So you look at the average Bangladeshi student, they are so tech-savvy. We could really use them in some of these new areas like robotics, artificial intelligence, IT, data analytics, the Internet of Things, biotechnology.”
Globally, these are the trades that are hugely in demand and there is a short supply.
“Right now, Bangladesh has a huge demographic dividend and it does have a population that is very eager to do well. You know, if you look at Korea 20-30 years ago, this is exactly how it was then. They had a desire to do well in life and make their country big and look where they have gone.”
So similarly, in Bangladesh, the youth should be at the centre of its development and they are exceedingly innovative. “And if we can give them a proper ecosystem, if we can give them a proper kind of environment, I am sure they can do wonders.”
Other than investing in people, in the medium- to long-term Bangladesh needs to invest more in infrastructure, invest much more in climate change, disaster resilience, sustainable urbanisation and also create an equitable society.
But that is in the long-term and medium-term; to get there one needs to overcome the short-term challenges, which are centred on the pandemic.
The role of multilateral lenders has been important in fighting off the impact of COVID-19, so one can wonder if Bangladesh would run into a debt servicing problem.
But Parkash remains upbeat.
“If you look around, Bangladesh has been one of the more responsible borrowing countries. If you look at the debt to GDP ratio, Bangladesh probably today has one of the lowest ratios in the region. And I must say with my own personal experience, Bangladesh looks at the cost of borrowing every time we actually have a loan negotiation. They look at the cost of borrowing, they look at the tenor, they look at the terms. The track record has been quite remarkable.”
His only suggestion is the country should continue in the same vein: be very prudent, be very pragmatic and use the money in a judicious way.
Another thing that is working in Bangladesh’s favour is the cost of borrowing, which is very low.
“In a low interest rate environment, borrowing makes a lot of sense, particularly when your own financing, when your own revenue side is having some issues.”
Going forward, ADB would be providing more financial support and with favourable terms and conditions as Bangladesh is one of its choice borrowers.
“From my perspective, this development story should continue. There is not another country where I see a 6-7-8 per cent growth rate for such a long time. You know, ten years is a long time. I am hopeful that very soon we will all come out of this crisis. And after that, we will be back on the high growth path that the country had witnessed all these years.”