Three white knights of economy
Agriculture, exports and remittances have been the key pillars of Bangladesh's economy for much of its history.
These three drivers also helped the country navigate a turbulent 2021 when most economies around the world struggled amid recurrent coronavirus waves, supply bottlenecks and unprecedented levels of inflation.
"We did not face any food shortage because of robust farm production. Healthy flow of remittance has given us stability and led to an increase in consumption as this money ends up in villages," said Atiur Rahman, Bangabandhu Chair professor at the University of Dhaka.
Another driver of the economy is the export of garments, which are on the rise. Apparel shipment accounts for 85 per cent of the national export receipts.
The economy is liquid because of the stimulus package that the government has boldly introduced since the pandemic arrived on the shores of the country.
"Thanks to the liquidity, consumption increased," said Rahman, also a former governor of the central bank.
Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh, says the export sector has done a commendable job for the economy. The flow of remittances has also come in handy.
"The agriculture sector has been fairly resilient. This is helping the economy rebound."
Fahmida Khatun, executive director of the Centre for Policy Dialogue, thinks the agricultural sector has provided not only stability but also security.
"There was no shortage of food."
She says export orders had plummeted at the peak if the pandemic. Orders began to return in August 2020.
"Stimulus packages, liquidity support and cash support for the poor have been provided although they were not enough."
The e-commerce sector is also doing well, said Fahmida.
Prof Mustafizur Rahman, a distinguished fellow of the CPD, says the export sector had a growth of 24 per cent in the last five months. Import has surged, where there is 50 per cent growth.
"However, we have not been able to bring in new investment of the private sector. It is also a challenge for the days ahead."
Monzur Hossain, research director of the Bangladesh Institute of Development Studies (BIDS), said vaccine rollout has been a major factor for the economic revival in addition to agriculture, exports and remittances.
About 27 per cent of the population in Bangladesh have received two doses of Covid-19 vaccines and 52.64 per cent received at least one dose, according to the Multilateral Leaders Task Force on Covid-19 Vaccines, a global effort to help developing countries access and deliver vaccines.
"As a result, the economy has almost returned to the full recovery stage," Monzur said.
He says the construction sector has also done quite well during the pandemic.
In fact, realtors have sold around 10,000 flats so far this year as customers shrugged off pandemic fallout and the government keeps extending the amnesty to the investment of untaxed money in the housing sector.
Khondaker Golam Moazzem, research director of the CPD, says not everyone is turning around equally.
"But if we talk about the overall economy, it has turned a lot."
He says if the export sector does well, many sectors also perform better because of the linkage.
Nazneen Ahmed, country economist of the United Nations Development Programme, gives credit to everyone from businessmen and farmers to workers and ordinary people for the recovery.
"Everybody is trying very hard to return to normalcy. All sectors are actually working as drivers," she said, adding that various online platforms, outsourcing businesses, delivery firms and startups have been contributing to the recovery.
Selim Raihan, professor of the Department of Economics at the University of Dhaka, says activities in manufacturing have done well except for the lockdown period.
"Now, most of them have returned to the pre-pandemic level."
Towfiqul Islam Khan, a senior research fellow at the CPD, says the pharmaceuticals sector is doing well, aided by robust domestic consumption and rising exports.
"Sectors such as transport and retails are starting to pick up," he said.
There are some concerns.
Nazneen says the way large businesses and industries were able to make a comeback with the help of the government, the smaller ones did not get the same opportunity in terms of access to finance.
"So, their recovery is happening at a slower pace."
Speaking about the labour market, she says there is a group of people who are less skilled, uneducated and older, and they are having a hard time in getting back to the job market.
The service sector has not returned to the pre-crisis stage, according to Kazi Iqbal, a senior research fellow of the BIDS.
"The good thing is that the tourism sector is turning around."
Towfiqul says the recovery of the businesses of hotels, restaurants and tourism sites is lagging that of other businesses.
Another challenge is credit growth has not yet reached the expected level. This is because there has not been much investment since uncertainty persists.
Inflation, which rose to a 13-month high in November, is another major worry for the economy.
So, the government has to remain alert about it, Monzur said.
"There is a fear of inflation. But in a country like ours, even if inflation rises a little, if growth can be kept right, then the trade-off will not be that bad," said Atiur Rahman.
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