Reportage
Bangladesh likely to experience disruptive economic impact due to the pandemic
Let's start with a question. Is there a single continent (except for Antarctica) in this world at this moment, which is not under the risk of COVID-19 pandemic? One could spend days, weeks or even months thinking about it but would not essentially find a plausible answer to it. Coronavirus has been a global crisis, killing more than 37 Thousand people and (counting) worldwide while leaving 49 infected and 7 reported dead, as of the time of this writing. Experts believe the hazardous COVID-19 can turn into devastating economic fallout for Bangladesh within a few months.
Although Bangladesh did not encounter much challenges four months ago when the outbreak of the pandemic started, it is now paying the price for being not so conscious since the beginning - particularly regarding returnees from China, Italy and other countries. Authorities cared less when thermal scanners in the airports were out of order, which resulted in embarking those returnees' freedom and maintaining of absolutely zero social distances, and that triggered the spread of Coronavirus in Bangladesh.
Despite the fact that Bangladesh is slowly awakening from this month, paying needed attention from the latter half of March to tackle the uncertainty caused by the pandemic, government still seems unprepared for the economic damage it is likely to encounter a few months later due to the Coronavirus outbreak. Think-tanks assume if this pandemic goes on and uncertainty last for a few more months, Bangladesh is prone to be excruciatingly affected - financially, to be specific.
Let's consider the medical system in Bangladesh which seems thoroughly unprepared to provide treatment for Coronavirus, simply because it lacks enough resources to ensure necessary treatment for all. One would frown upon the number of medical centers prepared for offering treatment for COVID-19. Institute of Epidemiology Disease Control and Research (IEDCR) is the only center where people have access to testing Coronavirus. A country like Bangladesh where 180 million people live, could not make 10 testing center available even if it has been four months running since the epidemic began.
A young Bangladeshi returnee from Canada, Nazma Amin, an undergraduate student of the Business School at the University of Canada, died on the 14th of March due to the negligence of Dhaka Medical College Hospital (DMCH) doctors. Her father claimed, "The doctors' in attention derived from their suspicion that the patient was infected with Coronavirus though she was suffering from gastrointestinal complications, therefore providing zero medical service to her ailing daughter in fear of getting infected."
According to Jamuna TV, 200 intern doctors have quit working because they did not receive PPE (Personal Protection Equipment) to serve the patients. When doctors are not secured, it is not unusual for them to be reluctant to serve the patients -as they are human, too. This shallow medical preparation stimulates the economic damage because factories and offices will lose the productivity once more and more people get infected with the virus and poor medical systems further accelerates the spread of it. Consequently, a financial breakdown is not far away if people behind the machines and technology continue to die on due to the lack of proper medical attention.
Apart from that, as China tops the list of most affected countries by the deadly virus, the whole world is under immense shortage of supply chains including Bangladesh, and that eventually increases the likelihood of extreme economic crisis in Bangladesh within a few months. Bangladesh Garments Accessories and Packing Manufacturers and Exporters Association (BGAPMEA) President Abdul Kader Khan said, "If this critical situation exists for 6 months, Bangladesh will lose BDT 1,500 crore."
According to Bangladesh Bank data in FY-2018-10, Bangladesh imported goods worth $13.64 billion from China, the highest amount of import from any country. Over 40% textile and textile related goods and 30 % capital machinery are from China, according to Mr Khan. So this is well-assumed from Looking at the global scenario that the rest of the world is also heavily reliant on China for supply chains. Bosch CEO Volkmar Denner said, "I am concerned about the supply chain; China has the company's largest number of employees after Germany and we rely on China for parts and raw materials."
UNCTAD has forecasted that if Bangladesh's import of intermediate inputs from China declines by 2 percent due to the Coronavirus, it will cost Bangladesh USD 16 million. The leather sector will lose USD 15 million alone, while the textile and apparel sector will lose USD 1 million.
That tiny valve which is inside a motor that throttles an US-made product, is generally made in China, so are the rare earth elements require to manufacture electronics - thereby almost all the countries rely on parts from China, and that shortages are eminent", said Executive Director of the Reshoring Institute. A software engineer of Berger Paints Bangladesh Limited, Mostafa Kamal, explains - "From iPhones to LCD televisions, much of the world's consumer technology is either made in China, or depends on parts made there, and Bangladeshi electrical and electronics market is no exception."
What is worse is that the driving force of Bangladesh's economy, the Ready-Made Garment (RMG) sector, is thought to be at the peak of risk due to this ongoing microscopic virus that has shaken the whole world, pushing Bangladesh economy in jeopardy. It goes without saying that China is the largest market for Bangladeshi RMG in South Asia. Bangladesh Bank data suggests that in FY-2018-19 Bangladesh exported products worth $813 million to China, the maximum remittance from a single country. BGMEA President Dr. Rubana Huq said, "Coronavirus crisis has become a huge concern for the textiles and RMG industries in Bangladesh since we source a significant amount of our raw materials from China."
BGMEA reveals that a total of 69 apparel makers have faced order cancellation worth $93 million, which continues to rise. BKMEA's First Vice President Mohammad Hatem added that "C and A alone has cancelled work orders worth $15 million." Experts predict that further deterioration may lead to huge economic downturn for Bangladesh, in coming days.
A research conducted by The Center for Policy Dialogue (CPD) unearths that RMG contributed 11.17 % of total GDP in FY2017-18. It also reveals that RMG employs more than four million people in Bangladesh. Because all the countries have imposed a travel ban and people in most of the countries are in lockdown while following stay-at-home situation, the orders are being cancelled more frequently than ever before. As a result, the ratio of jobless people is projected to increase, which, in turn, could push Bangladesh into a major economic downfall.
It is to be noted, Bangladesh earns a fair share of money from tourism. Coronavirus, however, stops all the tourists from visiting some of the picturesque tourist spots of Bangladesh like Cox's Bazar, Sajek, St Martin, Chittagong Hill Tracts, Archaeological monuments in Dhaka, Tea-states in Sylhet and more. According to the Ministry of Tourism, 27 million tourists visited Bangladesh in 2018. It showed upward trend in subsequent year.
As travel ban has imposed in between all the countries throughout the whole world at this moment, tourist spots are being oddly lifeless. Bangladesh also had to ban traveling and doubtlessly, it is being deprived of huge amount of money coming from the tourism sector combined with the opportunity to the representation and exchange of culture, through the visitors coming from overseas.
What could help Bangladesh to get over this critical period? Nothing but a concrete plan to followed by proper actions, instead of whimsical consolation words from the authorities. By following China, it can get into direct actions against COVID-19. Nobody on the frontline should be constrained by a lack of funds. More Intensive Care Units (ICU) must be built and respirators, protective gear and masks be mass-produced and made available to all who need them. Lately for sure, but the good news is that people in power started to pay attention at these.
Recent reports published on several electronic and print media have said that private hospitals are barred to test Coronavirus while India, Pakistan and other countries have allowed private hospitals to do the tests. Bangladesh is going against the wave in many cases like this, putting millions of lives at high risk. The authority has unequivocally made a great mistake paying almost no attention to returnees from several countries let alone getting them to be self-quarantined, which most of them did not care much. When thermal scanners were out of order at the airports, authorities did not care until it was too late.
Most importantly, taking the number of population in Bangladesh into account, government should consider allowing private hospitals to make sure the access to testing patients where testing facilities are available, like the way people tested themselves during the Dengue outbreak last year.
As it stands now, this crisis period necessitates strong actions of the government in order to tackle health and economic crisis resulted from Coronavirus. Yet, the cooperation of the people is also essential; hygiene is the order of the day. Michael Jordan said, "Talent wins games but teamwork wins championship." Bangladesh needs the teamwork while maintaining the good hygiene and necessary social distancing, through which it can minimize the wrath of COVID-19 in health, economic and social sectors of the country.
Mahde Hassan is a final year student in the Department of English, East West University and an Invigilator at the British Council Bangladesh. He can be reached at Mahde.Hassan@bd.britishcouncil.org
Leave a Comment
Recent Posts
No banks to be shut down: Fina ...
Some banks are recovering well, while others may continue to struggle, ...
27 envoys of European countrie ...
Diplomats representing 27 European countries, stationed in Dhaka and N ...
Unity to tackle climate change could be regional to ..
Mismanagement and overcrowding plague Dhaka Medical ..
Remarkable achievement for Bangladeshi artists at th ..
We need new economic framework that serves planet, p ..