Coping with the twin troubles
Friday, 5 June 2009
A report from the UNICEF and restated in this paper last Thursday has focused on a significant area of concern for Bangladesh -- the poverty situation. It drew attention to the phenomenon of some 21 million people who have joined the ranks of the poor or slid back into acute poverty as the fallouts from the recent developments namely the price hike and the global economic crisis. The price increases and that too rather steeply all through 2007 and 2008, have shaved off a major part of the purchasing power of the non-affluent in the population of Bangladesh. The global economic crisis and its effects on export oriented industries have meant less expansion of them and squeezing of their capacities or under production, leading to more unemployment.
Thus, the twin effects of reduced purchasing power, coupled with shrinking employment opportunities, have caused a setback of sorts in the poverty situation in the country. This regression in the fight against poverty is the most unfortunate development after more than a decade of some interrupted successes. Every year in the present decade, the poverty scene had gone on improving in Bangladesh except for the last two years. The endeavour to win against poverty requires sustainable gains, making progress without a reversal, for the results of the same to be consolidated and reflected in the rising standards of living of the population as a whole and maintaining of uptrends in the vital economic indicators.
In this context, the policy planners will not only have to take cognizance of these upsets but do their best to address them. The unfurling of the national budget for the next fiscal year is due on the eleventh of this month. Hopefully, it should recommend adequate provisioning in different social sectors such as food, education, health care, etc., for the ones who have slid afresh below the poverty line to move up the ladder again and for others to join in the climbing up.
The hard-hit ones will need greater supports in getting food at costs they can afford, similar aid in education, housing and health care. Planned moves will have to be made to create and maintain employment opportunities in greater numbers for them. The government's fiscal policy as well as the central bank's monetary policy will need to be specially friendly for the poor. Government in the coming fiscal year would be expected to do its best in keeping prices of essential goods on the lower side and stable. To this end, it should take measures to help smooth supply conditions and comfortable stocks of goods and adopt suitable fiscal measures to encourage good supplies at reasonable prices. Government should be also well prepared to monitor the developments in the market and take appropriate corrective steps to help keep prices of basic goods stable. The monetary policy of the central bank does also need to play its appropriate role to help support economic growth within a framework of price stability.
The main strategy of the government in relation to export-oriented enterprises would be to facilitate them to retain the maximum competitiveness. These enterprises would be deserving special fiscal and other supports from the government to maintain or further enhance their competitiveness with the aim of keeping production activities on full gears and make unnecessary the shedding of jobs. The policy planners also need to be pro-active to promote policies that would influence the growth of investment operations that would help the economy to expand significantly through creation of domestic demands and the establishment of the capacities to meet such demands. The growth of the economy with an inward dimension is likely to have particularly ameliorative effects on poverty conditions through employment and income creation.
Thus, the twin effects of reduced purchasing power, coupled with shrinking employment opportunities, have caused a setback of sorts in the poverty situation in the country. This regression in the fight against poverty is the most unfortunate development after more than a decade of some interrupted successes. Every year in the present decade, the poverty scene had gone on improving in Bangladesh except for the last two years. The endeavour to win against poverty requires sustainable gains, making progress without a reversal, for the results of the same to be consolidated and reflected in the rising standards of living of the population as a whole and maintaining of uptrends in the vital economic indicators.
In this context, the policy planners will not only have to take cognizance of these upsets but do their best to address them. The unfurling of the national budget for the next fiscal year is due on the eleventh of this month. Hopefully, it should recommend adequate provisioning in different social sectors such as food, education, health care, etc., for the ones who have slid afresh below the poverty line to move up the ladder again and for others to join in the climbing up.
The hard-hit ones will need greater supports in getting food at costs they can afford, similar aid in education, housing and health care. Planned moves will have to be made to create and maintain employment opportunities in greater numbers for them. The government's fiscal policy as well as the central bank's monetary policy will need to be specially friendly for the poor. Government in the coming fiscal year would be expected to do its best in keeping prices of essential goods on the lower side and stable. To this end, it should take measures to help smooth supply conditions and comfortable stocks of goods and adopt suitable fiscal measures to encourage good supplies at reasonable prices. Government should be also well prepared to monitor the developments in the market and take appropriate corrective steps to help keep prices of basic goods stable. The monetary policy of the central bank does also need to play its appropriate role to help support economic growth within a framework of price stability.
The main strategy of the government in relation to export-oriented enterprises would be to facilitate them to retain the maximum competitiveness. These enterprises would be deserving special fiscal and other supports from the government to maintain or further enhance their competitiveness with the aim of keeping production activities on full gears and make unnecessary the shedding of jobs. The policy planners also need to be pro-active to promote policies that would influence the growth of investment operations that would help the economy to expand significantly through creation of domestic demands and the establishment of the capacities to meet such demands. The growth of the economy with an inward dimension is likely to have particularly ameliorative effects on poverty conditions through employment and income creation.