As country after country headed into their version of 'lockdown' over February and March (after Wuhan and Hubei province in January), the hope was that the re-emergence into economic vitality would be relatively seamless. A pandemic, it was felt, was essentially a medical or healthcare issue, with no mechanism through which any lasting, structural damage could be imparted on economies. Everyone agreed to take a hit to their current cycle. Whatever outlays were about to be put on hold, would simply roll over to when activity resumed. Donald Trump, at the helm of what he liked to call "the greatest economy" in U.S. history (not fully without justification) before it was rudely interrupted by the novel coronavirus, repeatedly professed his faith in a comeback that would be "strong and fast".

Following an unprecedented 8-week halt in some countries, it has become clear that the world economy cannot continue in this inert state much longer. Today as I write this, almost all the lockdowns imposed in different countries around the world, are at some stage of withdrawal.

One of the countries wishing the U.S. president's faith in a strong comeback proves well-founded would be Bangladesh, given the robustness of its own economy in the period leading up to the pandemic. The government has given some strong signals that it too will be looking to reopen the economy in coming weeks, most likely aiming to catch some of the latent momentum in the run-up to Eid ul Fitr. A recent report in The Economist, on the underlying strength of 66 emerging economies grappling with the virus and their prospects for dealing with the aftermath, made for encouraging reading. The famously influential magazine ranks the country at number 9, out of all 66, on its ability to deal with the challenges that lie ahead. That puts it ahead of all its partners in Saarc, and even China (although one may question why China is still counted as an emerging economy in the first place).

The existing level of public debt in each country is one of the key determinants behind the ranking, that we know has been kept at a manageable level in Bangladesh over the years, thanks to a succession of competent finance ministers from across the political divide - stretching back to Dr. M Syeduzzaman, the late Saifur Rahman(twice), slain A.S.M Kibria, and the recently retired A.M.A. Muhith (twice in succession). Essentially conservative in their outlook, they also tried scrupulously each year to maintain the budget deficit within a safe and sound 5 percent. Mostly they succeeded, and although economists at different times have called on them to break the mould and avail the temporary yet heady boost provided by deficit financing, remarkably they never relented on this point. And today, if as The Economist believes the country is well-placed to turn to international lending markets for financing some of its post-pandemic activities, a generation would be bearing the fruits of their discipline.

Leave a Comment

Recent Posts