Writer: Qazi Kholiquzzaman Ahmad, Economist and Chairman, Palli Karma-Sahayak Foundation (PKSF)
Published by Financial Express on April 11, 2020.
The Covid-19 cases have started to rise fast in Bangladesh, indicating an unsavoury prospect. The Government of Bangladesh is rightly increasing the number of tests for coronavirus, which is an absolute must to know how the pandemic is – or is not – spreading. In fact, more and more coronavirus tests are needed across the country. In the process, the areas likely to be affected most are being prioritised, which should be strengthened, taking into account sporadic prima facie or real Covi-19 cases and returnee (from widely coronavirus-affected countries) concentrations. What is necessary is that tests must take place extensively as well as intensively and fast. At the same time, expansion of treatment facilities, which is underway, needs to be accelerated in terms of hospital beds and the required equipment on one hand and doctors and nurses on the other. The ongoing efforts for procuring and distributing personal protective equipment (PPE) for doctors, nurses and other caregivers need to be strengthened. But people must follow strictly the do’s and don’ts, by now well propagated throughout the country, to avoid being attacked by coronavirus.
Prime Minister Sheikh Hasina announced, on April 05, a large relief, rehabilitation and stimulus package in the wake of Covid-19 pandemic, involving Tk 727.50 billion (72 thousand 750 crore) – over 2.5 per cent of gross domestic product (GDP). This is a welcome move. Let us look at some of the aspects involved. One crucially important thrust is assistance, in terms of food items and other consumer necessaries, for the survival of those whose livelihood has crushed due to lockdown and movement restrictions causing, across the country, widespread losses of employment and collapse of demand for goods and services provided by micro operators in both rural and urban areas. Hence, the number of candidates for relief is very large and they are scattered throughout the country. The relief activity is therefore a massive undertaking. It cannot be delivered satisfactorily unless the whole operation is effectively coordinated centrally as well as at subnational and local levels. The Standing Orders on Disaster (SOD) provides an elaborate mechanism to address the humanitarian and socio-economic impacts of natural disasters. The SOD outlines the responsibilities to be carried out at all levels, from central to local. In addition to the government ministries and agencies, it enlists the participation of non-governmental organisations (NGOs) and civil society. It provides guidelines for the disaster management committees at all levels as well as of other entities involved in relief activities. This document can be usefully drawn upon while putting in place mechanisms for effective relief distribution in the wake of Covid-19 pandemic, be it in kind or cash. A crucially important issue here is to identify the genuine recipients. They include farmers, farm workers, rural and urban rickshaw-pullers and day-labourers, fishermen, micro enterprise owners and workers in rural and urban areas, and all other poor and low-income people including slum dwellers. The other important issue is: timely delivery of the prescribed support packages to those identified, through an appropriate and effective institutional mechanism such as the SOD.
The relief requirement in prospect is so large that the government alone cannot fulfil it. In fact, various private organisations and financially able people have started to come forward, which is appreciable. Much more is possible, which can be expected to come forth, given that Bangladeshis are known to stand by their fellow human beings in the wake of disasters. But the delivery must be made, strictly observing the protocols relating to containing the spread of coronavirus.
The large industries, especially export-oriented industries are, given the circumstances, fairly well provided for through the provision of a working capital fund of Tk 30 billion (30,000 crore) at an effective interest rate of 4.5 per cent, workers support fund of Tk 50 billion (5,000 crore) at an effective rate (interest 2.0 per cent), putting more money into the export promotion fund, and other schemes. Timely implementation is obviously called for if the intended results are to materialise.
The intended beneficiaries of working capital support package of another Tk 20 billion (20,000 crore) are cottage, micro, small and medium enterprises (effective interest rate 4.0 per cent). In fact, the minimum investment (except land) in a small industrial enterprise is Tk 5.0 million (50 lakh) and employment is 25 to 99 workers The medium enterprises are much larger. These enterprises are in the formal sector and have access to banking services. These enterprises can be served through banks. But, cottage and micro enterprises in which investment varies from around Tk 100 thousand (one lakh) to, say, Tk 200 thousand (20 lakh) or so abound in both rural and urban areas of Bangladesh. These activities are the sources of employment, livelihood, poverty reduction/eradication, beyond poverty progress and socio-economic inclusion of a huge number of people. These enterprises have little or no access to banking services yet. They therefore cannot be reached through banks and they are in any case too small for banks to be interested in. One mechanism available to reach them is via NGOs which have been effectively catering to the needs of these small economic people. The Palli Karma-Sahayak Foundation (PKSF), which is a government-sponsored foundation, plays a key role as a funding and monitoring agency in this context. In addition, millions of poor and low-income households are supported for improving their living conditions with financial and non-financial support from the same sources. This mechanism needs to be kept operational, with due regard to the adverse circumstances faced by all concerned consequent upon the Covid-19 pandemic. It is important to understand that those people must be reached with funds and other services fast, otherwise their economic activities will collapse and many may not be able to turn around.
In the trying corona and post-corona days, ensuring food security at national and household levels is crucially important. The Prime Minister has called for increased food production. Let me highlight a few things in this context. Kharif season is around the corner and harvesting time of Boro paddy is almost upon us. Attention needs to be given to providing financial and other necessary services to kharif activities, as required. Boro accounts for 60 per cent or more of the national rice production. Its harvesting this season may face severe labour shortages, which needs urgent attention. Poultry and egg and fish productions are other activities that need to be monitored as to how these are being impacted and should be provided with the support that may be required by them in terms of finance and marketing. Another issue needing attention is health-wise safe transportation of inputs and food products in this corona time.
Prime Minister Sheikh Hasina has again issued a stern warning against corruption. At this time of a global crisis facing the humanity, can one hope that people will refrain from taking recourse to corruption and grabbing? Anyway, if anybody is found to adopt corrupt practices, they must be meted out severe punishment.
It looks like we are in for a rather prolonged lockdown. Hence, the prognosis of the pandemic and the associated assistance and incentive programmes with assumed lengths of time need to be worked out. If it is generally prolonged even up to end May, we need to brace ourselves for a hard slog. If it is longer, things will obviously be much more challenging. In that case, unless there is a well thought-out programme and coordination mechanism at hand, things may go astray. To be practical, we should prepare our action programmes to address the impacts of Covid-19 pandemic, with built-in flexibility with respect to different plausible time-horizons of the crisis.
Qazi Kholiquzzaman Ahmad is a senior economist and development thinker.