Poor families dependent mostly on agriculture in Bangladesh's rural areas are worst-affected due to a hike in global commodity prices following the Russia-Ukraine war, a study reveals.
The economic crisis has pushed an estimated 3.0 million people into poverty while the national welfare reduced by 2.0 per cent, it added.
The study styled 'Impact of Ukraine Crisis on Bangladesh Economy Using Computable General Equilibrium (CGE) Model' was presented during a session on the opening day of the two-day BIDS Research Almanac 2023.
The Bangladesh Institute of Development Studies (BIDS) hosted the programme at a city hotel on Wednesday.
BIDS research fellow Tahreen Tahrima Chowdhury and International Food Policy Research Institute senior scientist Angga Pradesha presented the study paper.
Economic Research Group (ERG) executive director Sajjad Zohir was the session chair while Associate Professor Deen Islam of economics at Dhaka University and Assistant Professor Javed Hossain of economics at North South University were the discussants.
Presenting the paper on the impact of Ukraine crisis, Ms Tahrima said the research team analysed several issues, including petroleum, fertiliser, food price hike and exchange rate devaluation in Bangladesh.
Following the price hike of commodities like energy and fertiliser, she said Bangladesh had to adjust the prices, which ultimately created the shocks for marginal people.
Mr Pradesha presented the technical methodology of the study that used the CGE model.
CGE model is a class of economic model that uses actual economic data to estimate how an economy might react to changes in policy technology or other external factors.
According to Mr Pradesha, agriculture sector is the mostly affected sector given the strong interlinkages with the affected sectors.
The paper says fertiliser subsidy helps increase agricultural production the most while cash transfer is most effective in reducing poverty.
Cash transfer programme requires the least government budget than the subsidy programme but provides the highest impact in reducing poverty.
Two other papers on sustainable financing strategies for SMEs and RMG compliance measures were presented.
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