Gloomy outlook of economy – domestic and global

By the time the new government takes over in Bangladesh, the Global Economic Prospects Report released by the World Bank makes a projection of slowdown of the country's GDP (gross domestic product) growth to 5.6 per cent for the current financial year 2023-24. This is much higher than the global GDP growth, the international lender predicts, at 2.4 per cent. What is, however, particularly concerning is that the growth rates of both the country and the world at large are most likely to be in the slow lane for the third consecutive year. While Bangladesh's robust economic growth recorded at 7.1 per cent in 2021-22 dipped to 6.03 in 2022-23, the global GDP growth also declined to 2.6 per cent in 2023 from 3.0 per cent in 2022. But the world economic growth witnessed a precipitous fall from 6.2 per cent in 2021 to 3.0 per cent the following year. In 2020-21, the country's GDP growth was 6.94 per cent. Before the pandemic, though, its economic growth rose to 7.88 per cent in FY 2018-19 only to plummet to just 3.4 per cent in 2019-20, the pandemic period.
Admittedly, the cold figures do not speak the whole truth but they are surely representative of a general global trend and the corresponding indicator of a particular country. The year when global economy just started rebounding with the recession of the pandemic, the growth was recorded at 6.2 per cent and corresponding to this, Bangladesh's economy also recovered to register 7.1 per cent growth. This is despite the fact that there is a difference in time periods between calendar fiscal year and fiscal year counted from July here. Had there been no Russo-Ukraine war, the deep financial crisis facing nations across the globe might have not happened at all.
Evidently, the economic outlooks for either Bangladesh or for the large economies are not bright at all. For example, the number one US economy, according to the WB, is likely to see a GDP growth drop to 1.6 per cent from 2.5 per cent the previous year. Chinese GDP growth is likely to fall from 2023's 5.2 per cent to 4.5 per cent. India is also going to experience a substantial fall in GDP growth from its 7.2 per cent in 2022-23 to 6.3 per cent in the current fiscal.
What is notable here is that large economies have greater power to absorb shock than smaller ones like that of Bangladesh. This is because they draw their economic strength from a wide range of sectors where reversals in a few can be negated by prosperity in others. China and Russia provide the best examples of this shock absorption. While more and stricter sanctions imposed on Russia were intended to weaken that country; instead the European alliance EU suffered heavily as the sanctions proved a boomerang for its members and the UK.
China and India prospered on cheaper crude oil supply from Russia. The mutual commercial interests of these large countries were served quite well when the West's sanctions proved toothless. The Western policy of shipment of factories and investments from China to other countries such as Vietnam, Cambodia, India and even Bangladesh did not materialise the way it was supposed to be. India's aspiration for replacing China as the world's factory also did not proceed far.
In this context, domestic self-sufficiency in agricultural commodities including the staples matters. China is the world's top rice producer but India is the number one rice exporter. Whether this equation will get somewhat tilted with India becoming the most populous country in the world last year is yet to be seen. It imposed ban on export of rice last year claiming it as a measure for keeping domestic price down. Its sugar production dropped substantially and the export too was restricted.
Sure enough climate change has a role in the fall of farm production. Bangladesh could avoid a major hike in rice price unlike that of onion because of good local harvest. Yet its economy shrank because its export basket is not diverse nor could it import Russian crude oil for refining because of a lack of such facilities. This is despite the fact that Bangladesh had a standing offer of cheaper crude oil from Russia with which the country boasts a long and enduring friendship.
If food safety is ensured, a government can mind business in other economic affairs. But in its rush for wealth creation, it may fall in the trap of big business coteries which take the rein in dictating monetary policies. Today the overriding concern worldwide is to curtail the wealth accumulation in a few hands at the cost of the multitudes. Bangladesh is no exception to this but here the process of wealth formation is not at all transparent unlike in the far wealthy West. Innovation and advanced technologies are the driving force behind creation of business empires in the rich world whereas in Bangladesh few, if any, have prospered on such scientific and technological breakthroughs.
The odds, though, are against the ordinary people everywhere when the superrich almost without exception can accumulate more wealth even in time of the pandemic and Ukraine war that saw drastic shrinking of global economy. In Bangladesh, though, business malpractices and plundering of money from banks in the name of loans have not only bled the common people but also the country's economy. Elected lawmakers' wealth statements, according to their affidavits they submitted at the time of filing nominations, hardly make one optimistic. But yet the government in its third consecutive term in office can leave an enduring legacy, if it so wishes, by bringing an end to the financial and business malpractices eating into the vital of economy. This will allow it the leeway for launching sustainable programmes for rational distribution of wealth in order to narrow down socio-economic disparities.

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