Stimulus to the private sector
Mohsin Ali | Saturday, 14 March 2009
It has been over a month and half since the new government took charge of the economy including governance over vital areas of economic policies. Even before the changeover, there was noted advocacy that Bangladesh should be preparing in haste its policy responses to the inhospitable external environment affecting its exports and remittances, notwithstanding that felt adverse repercussions in these two sectors were none at all in that period.
But experts have been gazing at the crystal ball and almost unanimously gave their opinion that the negative effects of the global financial and economic crisis would be hitting the country some time in the future; their collective suggestion was that the country or the government should be making a head-start in studying what these ill impacts could be to put together an integrated policy response to the same.
The formation of a governmental task force to that end was recommended at the fastest. The caretaker government did not make a strong enough move to set up the task force on the plea that it would be handing over power very soon. Therefore, the responsibility for forming this task force fell on the new government as its highest priority.
The commerce minister of the new government in a recent media interview indicated that the forming of the task force -- immediately -- was the objective of his government. He even gave a deadline for the forming and activation of the task force by February if not sooner. But that deadline was crossed and nothing happened. Recently, the finance minister has offered a timetable for it which is next month. The government does need to do all the needful to help address, in a concerted manner, an issue that stands to direly effect the national economy. For even if the task force is set up by April and starts its work, it might require at last some months before its recommendations become available. Bangladesh, by that time could be well into the dangerous waters caused by the global recession without an appropriate policy to guide it.
It must, however, be noted that the formation of a task force is not an end by itself. Rather, it should be considered a pro-active move to help evolve an appropriate set of actions to suit the needs of the time in view of the problems on the global economic front and their likely knock-on effects on the Bangladesh economy sooner or later. The task force is not expected to offer any magic wand to the most wearisome aspects of the problems thereof. It will have no Aladdin's lamp in a poor country like Bangladesh to offer any massive rescue package that will involve resources beyond the means of the country. But it will at least give some solid indication about the government's seriousness to deal with many unforeseen -- and also now visible -- problems on the national economic front in the context of their still-unfolding nature.
All of the unfortunate consequences of the current global economic recession could, perhaps, be limited if it were the case that timely steps had been taken to have all realistic proposals ready for the consideration and implementation by the government. But going by the proverbial wisdom of being late than never, no further precious time should be wasted in this matter.
The neighbouring countries of Bangladesh which are also its competitors in export and workers' migration, had done their equivalents of rescue packages sometime ago and have been also benefiting from their operationalisation. This should only underline the great importance on the part of Bangladesh not to squander valuable time by dilly-dallying.
Meanwhile, a number of specific recommendations and suggestions have been noted by different business bodies and chambers to cope with the situation. One may front out here that the Metropolitan Chamber of Commerce and Industries (MCCI) in its quarterly review of the economy issued this week, urged the government to offer stimulus to the private sector to stave off recession's effects. There is justification for such a call by one of the country's leading chambers in view of the comparatively lower export earning of products in February and signs of decline in manpower export as well. But the government need not be just reactive in a piecemeal fashion by the right promptings from business groups. It should or must play its part in helping the private sector amid the troubles caused by the worldwide recession. In this context, it should be obvious why it must come up with packaged or integrated policy measures.
But experts have been gazing at the crystal ball and almost unanimously gave their opinion that the negative effects of the global financial and economic crisis would be hitting the country some time in the future; their collective suggestion was that the country or the government should be making a head-start in studying what these ill impacts could be to put together an integrated policy response to the same.
The formation of a governmental task force to that end was recommended at the fastest. The caretaker government did not make a strong enough move to set up the task force on the plea that it would be handing over power very soon. Therefore, the responsibility for forming this task force fell on the new government as its highest priority.
The commerce minister of the new government in a recent media interview indicated that the forming of the task force -- immediately -- was the objective of his government. He even gave a deadline for the forming and activation of the task force by February if not sooner. But that deadline was crossed and nothing happened. Recently, the finance minister has offered a timetable for it which is next month. The government does need to do all the needful to help address, in a concerted manner, an issue that stands to direly effect the national economy. For even if the task force is set up by April and starts its work, it might require at last some months before its recommendations become available. Bangladesh, by that time could be well into the dangerous waters caused by the global recession without an appropriate policy to guide it.
It must, however, be noted that the formation of a task force is not an end by itself. Rather, it should be considered a pro-active move to help evolve an appropriate set of actions to suit the needs of the time in view of the problems on the global economic front and their likely knock-on effects on the Bangladesh economy sooner or later. The task force is not expected to offer any magic wand to the most wearisome aspects of the problems thereof. It will have no Aladdin's lamp in a poor country like Bangladesh to offer any massive rescue package that will involve resources beyond the means of the country. But it will at least give some solid indication about the government's seriousness to deal with many unforeseen -- and also now visible -- problems on the national economic front in the context of their still-unfolding nature.
All of the unfortunate consequences of the current global economic recession could, perhaps, be limited if it were the case that timely steps had been taken to have all realistic proposals ready for the consideration and implementation by the government. But going by the proverbial wisdom of being late than never, no further precious time should be wasted in this matter.
The neighbouring countries of Bangladesh which are also its competitors in export and workers' migration, had done their equivalents of rescue packages sometime ago and have been also benefiting from their operationalisation. This should only underline the great importance on the part of Bangladesh not to squander valuable time by dilly-dallying.
Meanwhile, a number of specific recommendations and suggestions have been noted by different business bodies and chambers to cope with the situation. One may front out here that the Metropolitan Chamber of Commerce and Industries (MCCI) in its quarterly review of the economy issued this week, urged the government to offer stimulus to the private sector to stave off recession's effects. There is justification for such a call by one of the country's leading chambers in view of the comparatively lower export earning of products in February and signs of decline in manpower export as well. But the government need not be just reactive in a piecemeal fashion by the right promptings from business groups. It should or must play its part in helping the private sector amid the troubles caused by the worldwide recession. In this context, it should be obvious why it must come up with packaged or integrated policy measures.