MD ASADUZ ZAMAN and SOHEL PARVEZ

The government should make budgetary allocation for the fiscal year of 2022-23 to deal with the impacts of the ongoing Russian-Ukraine crisis and the possibility of the emergence of another wave of coronavirus, said a noted economist.

The suggestions came from Binayak Sen, director-general of the Bangladesh Institute of Development Studies (BIDS), as China is fighting its worst Covid-19, while the Russia-Ukraine conflict shows no signs of abating.

China, known as the world’s factory, is the largest trading partner of Bangladesh. The latest wave of coronavirus cases in Shanghai has already hurt the weak recovery of the global supply chain from the pandemic-induced disruptions.

And the conflict has added fuel to inflation in many countries, including Bangladesh.

“We are facing double jeopardy: from the Ukraine crisis and the new wave of coronavirus,” Sen told The Daily Star in a phone interview recently.

“So, the government should allocate an additional 10 per cent of the budget to combat the coronavirus pandemic and the impacts of the Russia-Ukraine crisis so that we can deal with challenges, if any.”

The coronavirus situation has seen significant improvement in Bangladesh in recent months, helped by the successful mass rollout of coronavirus jabs and the sharp fall in coronavirus caseloads.

But Sen says Bangladesh has to remain alert about any new wave of Covid-19 since the virus has not disappeared from the world.

“So, the fear of a new wave is still there.”

He called for a separate fund to tackle any difficult situation. “If we face any new threat, then we would be able to use the fund.”

Sen, who joined the BIDS in 1986, is an expert on poverty, income inequality, human development, labour market, social security, good governance, and political economy.

The former senior economist of the World Bank thinks Bangladesh’s economic growth may come under strain because of the international crisis.

“We had thought that the Ukraine war would be over within one or two months. But the crisis has defied all predictions and it may continue for some time. The war may linger. The policymakers should take this into their consideration.”

The fallout of the war, coupled with the impacts of the pandemic, may create a major threat for Bangladesh and a threat for budget management, he says. The impacts might come in the form of revenue shortfall or a drop in export earnings and might hand a blow to the balance of payments.

“Even, economic growth may falter to some extent because of the crisis in the international markets. It will have an impact on employment and social protection.”