Stimulating domestic demand
Friday, 17 April 2009
Firoz Ahmed
The current global economic downturn can turn into a blessing for us if we can stimulate 'domestic demand' by fully utilising our strong labour force. By creating jobs for the less demanding pool of workforce, we can manufacture inexpensive goods and then export those at a cheaper rate. These items would be good bargain in the international markets at this time of crisis.
The country must boost investment in the fast-growing small and medium enterprises (SMEs) to make the best use of the new opportunities created by the worst global economic crisis since the Second World War. Stimulating the micro-economic activities is the most crucial step for the country's economic uplift.
Injection by the banks' excess liquidity into new factories and businesses will cut the country's dependence on foreign goods as well as create jobs for millions of unemployed young men. The government should give special emphasis towards that direction.
According to some counts, some 40 per cent of Bangladesh's labour force is unemployed. Every year some 1.5 million young men are joining the workforce although the country can create only a third of the jobs needed to employ them.
But the country's huge workforce is its most valuable possession and the best competitive advantage. There has to be proper skill-based education and training to turn them into useful human resources. Development of SMEs has laid the foundation for the economic miracle in the South East Asian countries. But we need realistic and down-to-earth plans and a comprehensive policy to transform the SMEs into our main growth engine.
While in the short term it appears that the global economic downturn may not affect our economy in any big way, we should still take necessary preparations for its possible long-term impact. Return of the Chinese apparel manufacturers to low-end product market is a worrying sign for Bangladeshi apparel exports.
There has to be a stimulus package for the garments sector from Bangladesh government to stave off any possible danger emanating from the global economic tsunami. Already Chinese government has announced similar package for its exporters.
The global economic downturn deserves adequate attention as two of main foreign exchange earners - garments and remittance - could be badly affected by the crisis.
The current global economic downturn can turn into a blessing for us if we can stimulate 'domestic demand' by fully utilising our strong labour force. By creating jobs for the less demanding pool of workforce, we can manufacture inexpensive goods and then export those at a cheaper rate. These items would be good bargain in the international markets at this time of crisis.
The country must boost investment in the fast-growing small and medium enterprises (SMEs) to make the best use of the new opportunities created by the worst global economic crisis since the Second World War. Stimulating the micro-economic activities is the most crucial step for the country's economic uplift.
Injection by the banks' excess liquidity into new factories and businesses will cut the country's dependence on foreign goods as well as create jobs for millions of unemployed young men. The government should give special emphasis towards that direction.
According to some counts, some 40 per cent of Bangladesh's labour force is unemployed. Every year some 1.5 million young men are joining the workforce although the country can create only a third of the jobs needed to employ them.
But the country's huge workforce is its most valuable possession and the best competitive advantage. There has to be proper skill-based education and training to turn them into useful human resources. Development of SMEs has laid the foundation for the economic miracle in the South East Asian countries. But we need realistic and down-to-earth plans and a comprehensive policy to transform the SMEs into our main growth engine.
While in the short term it appears that the global economic downturn may not affect our economy in any big way, we should still take necessary preparations for its possible long-term impact. Return of the Chinese apparel manufacturers to low-end product market is a worrying sign for Bangladeshi apparel exports.
There has to be a stimulus package for the garments sector from Bangladesh government to stave off any possible danger emanating from the global economic tsunami. Already Chinese government has announced similar package for its exporters.
The global economic downturn deserves adequate attention as two of main foreign exchange earners - garments and remittance - could be badly affected by the crisis.