A few concessions that have been offered by the central bank last week for the coronavirus-hit businesses through relaxation of relevant rules are appropriate and timely. Those are, obviously, intended to keep the wheels of the economy moving during one of the worst times the world has undergone in recent memory. Affluent economies across continents are now trying to lift confidence by pouring in cash worth billions of dollars into the panic-stricken markets. The multilateral institutions are also not lagging behind; they have earmarked substantial volume of funds for countries needing help to overcome the crisis.
In fact, the governments now have twin emergencies at their hand. They, on the one hand, are fighting a hard battle on the health front to contain an invisible enemy and trying to keep afloat their economies, on the other. Meeting the double emergencies is truly a difficult job. Even the developed world with all their resources are finding it truly difficult to ride out the storm of the coronavirus pandemic that has so far hit 161 nations and territories and claimed more than 11000 lives.
Central banks in some countries have brought down their interest rates to almost zero to help create demand in the economies. Yet that has proved to be useless as investors are dumping assets and switching to dollars. The truth is the modern world has never been in a situation where countries one after another have shut their borders and put cities under virtual lockdown. The stimulus packages for the businesses are unlikely to deliver the intended results in such an inhospitable environment.
The central bank decision to suspend, for the time being, the classification of loans in the event of failure to repay loans by the borrowers on time is a move in the right direction. The relaxation of time in the cases of realisation of export proceeds and submission of bill of entries would surely offer relief to both exporters and importers.
Businesses, large and small, as well as people in general are deeply worried about the country's immediate economic prospects. Exports and remittances --- two lifelines of the Bangladesh economy -- are bound to take a hit from the ongoing coronavirus pandemic. Buyers have already either cancelled or advised to withhold their orders worth millions of dollars. In such a situation RMG factories might choose to suspend their operations, putting hundreds of thousands of workers in an uncertain situation. Hundreds of migrant workers have already returned home and many more are now stranded in the Middle East and Europe without any earnings.
Economic activities have already greatly slowed down as more and more people are now keeping themselves indoors to avoid corona infection. In such a situation, the businesses are being forced to shut down their operations. So, the central bank's latest concessions might help some businesses remain afloat temporarily, but it would not be able to generate the much-needed demand for goods and services in the economy.
The government is now fully devoted to the task of containing the spread of the COVID-19. Yet it does need to think about the economic wellbeing of the RMG workers and other poor people who are finding it hard to survive. Undeniably, the country does not have enough resources to match the support its affluent counterparts have been offering to their peoples in this difficult time, but it should do whatever is possible for the hapless section of the population to alleviate their plight.
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