Mahfuja Mukul: Bangladesh had set a record in the reserve during the Corona pandemic. The Russia-Ukraine war started as soon as the pandemic ended. The whole world is in crisis. The flame of which came to our reserve. The government is worried about the reserve, it is clear from the words of the concerned. The Prime Minister is also discussing the reserve.
While the government blames global conditions and development spending for the decline in reserves, there are other discussions on the issue.
Renowned economist and former advisor of the caretaker government, Dr AB Mirza Azizul Islam and another economist Dr Salehuddin Ahmed, former governor of Bangladesh explained the ways of phase out the ongoing green back crisis.
Mirza Azizul Islam said in a situation that is standing today, we have been warning in advance. There could be a crisis, it was manifesting in various indicators. The reserve situation is undoubtedly worrying. We mentioned that the obsession with reserves, remittances will end. But the experts did not seem to be heeded. Rather, the government is unwilling to accept criticism.
Reserves are now down to $35 billion from the quota of $45 billion and the rate of decline is very alarming.
Although the IMF says Bangladesh does not follow international principles in reserve counting. If you follow this policy, the reserve will decrease further.
What is your advice for overcoming the crisis? In response, this economist said, ‘One of the wings on which Bangladesh’s reserves stand is remittances sent by expatriates. It is important to increase this remittance. The government should think about what to do for this. We have to think about whether to give more incentives or increase the labor market abroad.
Emphasis should be placed on increasing export earnings. Importance should be given to why the export income is decreasing. And we have been repeatedly talking about multifaceted exports. We could not give much importance to any other sector outside the garment. However, we have many sectors through which it is possible to enter the global market. Production-oriented development should be done.
“We have been importing a lot of things. We import everything necessary and unnecessary. Unnecessary imports should be prevented. Import of luxury goods should be completely stopped. Excess money goes out in case of imports. Basically, the money that is being smuggled out is through the high cost of imports.
The government is blaming the global situation. Corona pandemic, Russia-Ukraine war are also responsible for the crisis. At least that is what the Prime Minister wants to say. In response, he said, “I don’t really comment on the Prime Minister’s speech. The global situation is partly responsible. Production has fallen worldwide. If the cost of production of imported goods increases, the extra money will go out. The Russia-Ukraine war is affecting all sectors. It may take some time to fix the situation as it stands.
Dr. Salehuddin Ahmedexpressed almost the same reaction. This analyst feels, ‘Decreasing reserves so quickly is certainly a matter of concern. The current account balance is very negative. Reserves are in the worst condition in the country’s history. I can already see the effect. The value of taka is falling drastically. Import costs are increasing. Fuel, food items are affected. The overall situation is fueling inflation. People are not really good. The quality of life is decreasing.’
Expressing the fear that the crisis will increase further, he said, ‘Another thing to worry about is that we have to repay the foreign debt from 2024. Some loans are short term. The time has come to repay the debt. That means more pressure ahead. If the loan is not repaid on time, the interest will increase further.
Common people are in the most danger. The middle class is not really going anywhere. There is no path ahead of them. Even though the situation is supposed to calm down after Corona, the Russia-Ukraine war is making it worse. Then climate change is taking everything out of control. During this period Sitrang’s rampages caused great damage to the south. Extreme unrest prevails everywhere. Bangladesh is really going through a tough time.
Explaining the way to overcome the crisis, he said, “We have to leave the old strategy and think anew.” We have come to understand only growth as development. We have to come out of this idea. It should be understood now that growth is not the measure of true development. Inequality is increasing. The number of poor people is increasing. Unemployment is increasing. People are now breaking savings. Those who have no savings are sitting on the streets. making loans It has increased the challenge to build a quality life. Macroeconomic indicators were slightly better.
What could be the new strategy? In response, he said, “You should avoid promoting the so-called development and growth.” You need to focus on overall development. There are different types of investment. You have to compare and think who gets benefit from flyover in Dhaka and who gets benefit from development of village roads. The government has not invested in small, medium and agricultural industries in that sense. These are developed at the individual level. Agriculture is handling the challenge on food. He did not do what the state should do.The GDP may be low here, but 50 percent of people depend here.’
The government has not taken any initiative in diversifying exports. All economists are emphasizing on this. However, the government is only busy with ready-made clothes. As many benefits to garment owners, as many incentives to garments. It is needed here too, but with the workers in mind. We have to think about how much state benefits the owner will get and how much the worker will get. Those who think about the owners of the industries and those who think about the fate of the workers.
We have been talking about human resource development or efficiency. What’s going on with it? Unskilled workers are going abroad. If you can send efficiently, you can earn twice as much. Three of our workers earn what one worker in another country earns. There is such discrimination on the question of skill. The government should have understood this by now. Because the country’s economy depends on remittances.
Education, health and social security should be given the most attention. It has not happened in fifty years. If people do not have social security how to work, who will invest? Then comes the question of good governance. No accountability. It’s nowhere. Regulatory institutions have collapsed. Banks, insurances, market regulators no longer bother to respond. What happened to the stock market is not judged.
President of Global Economist Forum Dr Enayet Karim said, “Bangladesh imports pin to plane and dal to spices, so each and every step should be very cautious.”
Political uncertainty is ahead as the opposition parties and the government in a tag of war situation regarding the next election conducting method, so the country has to prepare in many risks. Responsible people should be more careful in comments as their bad remarks could bring havoc for the country, he added.
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