THE government has constituted a forum comprising of renowned personalities to assess the impact of recession, which has started to affect our economy adversely, and suggest measures thereupon. Already, thousands of workers are arriving from Malaysia and the Middle East. The foreign minister has gone to Malaysia to resolve the issue of cancellation of visas of 55,000 workers.

BGMEA and the Chambers of Commerce have requested the government to initiate a bailout plan of Tk 6,000 crore to protect industries from the impending danger of output reduction and possible retrenchment of employees. The finance minister observed that the government preferred offering subsidies to direct cash incentives. "The government will need a lot of foreign aid and pro-active private public participation to address the harsher days ahead,” he added.

The developed countries declared packages to safeguard their economy but, in most cases, they have failed to get tangible

results. In the USA, the number of unemployed people has reached around 15 million, and insurances, banking institutions, automobile industries and housing businesses are in great financial crisis. The Japanese and Indian economies are facing a great challenge due to reduction of exports. Unemployment in the UK is increasing rapidly, with a similar situation in Italy and Australia.

World Bank President Robert B. Zoellick has cautioned the finance ministers of G-20 countries about the worst economic recession in coming days. According to him. the world economy might be more dismal than the prediction of the International Monetary Fund (IMF) and other financial organisations and experts. Many experts say that the recession might be more damaging than that of the 1930s unless developed countries take pragmatic app roaches to overcome the catastrophe.

The Great Depression was a worldwide economic downturn, starting in most places in 1929 and continuing in some countries uptol940, but in most places took normal shape in 1933. It originated in the US, and historians often use October 29, 1929 — known as Black Tuesdayas the starting date of the stock market crash.

International trade plunged by half to two-thirds, as did in personal income, tax revenue, prices and profits. Countries around the world were hit hard, especially those dependent on heavy industries. Most countries had to set up relief camps and underwent political upheavals. Political demagogues emerged and dictators like Hitler and Mussolini took over power and started the Second World War.

The shocks of the depression were so serious that GDP fell by 27%, unemployment rose to 25%, and price level fell by 26%, creating a situation where one-fourth of the population were found fasting day after day.

Post-World War 11 has witnessed about 11 recession and contraction periods on average for 11 months. The recessions of 1948-1949,'53 ' 54, '57-'58, '60-'61, '73-'75, '79-'8O, '81-'82, '90-'91, '97-'98, and 2001 affected the world econornyadversely.

Bangladesh's economy, price level, employment and politics have felt the impact of the recession in 1973-75. Since the media at that time was not so open or investigative, the people of Bangladesh could not even understand what had happened. Oil prices rose from $2.60/barrel in 1973 to $11/barrel in 1975. GDP growth around the world was on average -3% and unemployment increased to + 9%.

This time the government is taking precautionary measures. In 1974, the

government was blamed for exporting jute bags to Cuba, and the ship loaded with rice for Bangladesh was diverted elsewhere to teach Bangladesh a lesson. No one can say what might happen when the impact of recession is felt in the near future, and opportunists get the chance to manipulate and mislead the mentors.

Thus, it is time now to adopt fiscal measures to overcome any situation resulting from the recession. Our policy response must start from the preparation of the budget. Besides, the procurement of essential items and industrial raw materials should be planned well ahead of time. Banks, insurance companies and the housing sector should develop their own packages to overcome any crisis.

The IMF has proposed raising its fund to $50,000 crore to improve its capacity to overcome the recession. Development partners working in Bangladesh have already started to downsize their budgetary provisions for grants, loans and project assistance.

Professor Md. Yunus, Nobel Laureate, has made a clarion call to all to get united to fight against this impending danger. Apart from the fiscal and economic policies, there should be a consensus of political parties and intellectuals to overcome the situation.

Dhiraj Kumar Nath is a former Secretary and a former Adviser to the Caretaker Government