Like most countries, Bangladesh is going through an unprecedented crisis following the Covid-19 pandemic in terms of both health and economic outcomes, with increasing number of infected cases and deaths from Covid-19, and severe economic losses in terms of production, exports and remittances, resulting in considerable unemployment, loss of income and rising poverty. Bangladesh's GDP growth, averaging around 8 percent during the past few years, is projected to grow at between 2 percent and 3 percent in 2020, according to the World Bank. With around 20 percent of the population under the poverty line and another 10 percent living in extreme poverty, Bangladesh is quite vulnerable to economic shocks resulting from the global pandemic. According to an IMF estimate, over 2 million people could be added to the ranks of poor people in Bangladesh in 2020. At present, the reported number of unemployed people ranges from 10 million to 15 million compared to 2.7 million in 2017.

The government has been taking various measures to contain the fallout from the pandemic, including the stimulus packages (Tk 1 trillion, equivalent to 3.6 percent of GDP) and its ongoing safety net and relief programmes. However, since the pandemic will not fade out in the near foreseeable future, there is a need for a National Action Plan for three years, as has also been indicated by the prime minister recently. To me, the Plan should have two broad goals: (1) ensure healthy lives, and (2) ensure livelihood by bringing the economy back to its pre-crisis level in a phased-in manner. The Plan should involve all relevant government agencies and other concerned stakeholders; focus on six critical areas relating to health and economic well-being (as discussed below); and have time-bound measurable targets, clearly defined roles and responsibilities of different implementing agencies, as well as a monitoring framework to track the performance of the Plan. 

The immediate priority is to contain the fallout from the pandemic by enhancing the capacity and resources of the health sector to reduce the spread of the virus. Economic policies will be needed to protect against the impact of the decline in economic activity, and ensure that soon after the pandemic starts receding, the process of economic recovery can begin in a phased-in manner with due regard given to health safety standards. Economic policies should include targeted monetary, fiscal and financial market measures to support affected households and business establishments.

First, the crisis caused by the pandemic has exposed the weaknesses of health system in most countries, including Bangladesh. Bangladesh's health programme suffers from several major weaknesses. Under the present context, it needs to be considerably strengthened by ensuring: (1) adequate number of testing facilities; (2) adequate number of treatment centres, equipped with properly functioning ICU units including ventilators; and (3) frontline workers properly equipped with PPEs, gloves and masks. This calls for greater public sector investment. The health ministry should use this opportunity to lobby for considerably larger funding, preferably to the tune of 4 percent of GDP, as recommended by the WHO. It should also take needed reform measures and ensure greater involvement of development partners, NGOs and the private sector.     

Second, given the importance of the agriculture sector in ensuring food security and providing employment to around 40 percent of the labour force, the National Action Plan should ensure that: (1) farmers receive loans; (2) supply of agricultural inputs at the field level is maintained; and (3) farmers receive fair price for their products. Otherwise, it could have serious demotivating effects on the farmers. In addition to what has been allocated under the stimulus package, the concerned ministries, especially the agriculture and food ministries, should identify implementable strategies in the Plan to ensure the safety and security of this sector. 

Third, there is rising unemployment and loss of income, especially among workers in the low-wage informal sector, the self-employed, the youth, and several lakh returnee migrant workers. Therefore, the National Action Plan should: (1) ensure food security for them by distributing essential food items at the local level (allocation for safety net programmes needs to be raised to around 6 percent of GDP); (2) make provisions for their job creation; (3) identify their training needs; and (4) make provisions for their training in the areas of IT, electronics, vocational, technical, nursing, paramedic, etc. This will require concerted efforts of a large number of ministries and the private sector.

Fourth, given the major contribution of the cottage, micro, small, and medium enterprises (CMSMEs) in terms of generating employment, especially female employment, to a sizeable proportion of the labour force and its share of the GDP, this sector deserves urgent attention. In addition to what has been allocated under the stimulus package, the industries ministry should come out with implementable strategies to take the sector to its pre-pandemic level and beyond by the end of the Plan period.

Fifth, the RMG sector, the major source of foreign exchange earnings and providing employment to around 4 million people, especially females, is facing an unprecedented crisis on account of considerable decline in demand for RMG products globally and as a result of "lockdown" hampering domestic production. The overall export declined by 13 percent to USD 29.49 billion in the first ten months of FY 2019-20, compared to the corresponding period of the last FY. The RMG sector export earnings declined by 14 percent to USD 24.47 billion during the July-April period of FY 20, compared to the corresponding period during the preceding year. To address the crisis faced by the sector, the government, together with BGMEA and BKMEA and in collaboration with our foreign buyers, should identify implementable strategies in the Plan to ensure that exports can reach its pre-pandemic level and beyond by the end of the Plan period. Further, over-reliance on garments exports should be gradually reduced, and efforts should be intensified to diversify our export basket and explore new markets for our products.

Sixth, a major concern relates to the large number of returnee migrant workers, and hence, substantial declines in remittances for at least during the foreseeable future. Since most of them are unskilled and semi-skilled, the Plan should identify their training needs (IT, electronics, vocational, technical, nursing, paramedic, etc.) and make provisions to impart training to them. Such training should be possible within the timeframe of the Plan. With training and enhanced skills, they should be able to get into higher paying jobs, which would enable them to send higher amounts of remittance than what they had sent during the pre-pandemic period to the benefit of both their households and the national economy. Further, those who received training but are not able or willing to get jobs overseas can be productively utilised in the domestic production process.

The National Action Plan would require substantial additional funding. The question is: where will such funding come from? It is obvious that internal resources mobilisation will be lower because of the considerable slowdown in economic activity and declines in export earnings and remittances. What, then, would be needed is to downsize and delay less relevant projects, revisit existing projects and cut costs wherever feasible, resort to deficit financing to the extent needed, and seek project funding from development partners and financing from international lending agencies.  

Barkat-e-Khuda, PhD, is a former professor and chairman of the Department of Economics, University of Dhaka, and Dr Muzaffer Ahmed Chair Professor at Bangladesh Institute of Bank Management (BIBM). Email: barkatek@yahoo.com