The Financial Express

Supportive environment a prerequisite for post-pandemic inclusive development

| Updated: November 09, 2020 21:12:46

Supportive environment a prerequisite for post-pandemic inclusive development

Covid-19 has not just put the economy in a momentary crisis; it has forced the people to rethink the entire paradigm of progress. The issue of post-pandemic recovery calls for inclusive development of every sector. Without a supportive policy environment, the recovery could prove to be fragile and short-lived.

While thinking about the future, two wheels will have to play significant roles. The first of which is the resilience of people. In a way, Bangladesh and its people have already decided to take a risk and keep the economy running without properly assessing whether overlooking the Covid-19 dilemma is the right decision. A lot of positive signs are evident as this resilience has prevented many sectors from taking a major hit from the pandemic.

The other equally important wheel is the presence of a supportive environment. Bangladesh can only go so far with resilience. Many other countries such as the Philippines have based their development on resilience. Once the Philippines had dynamism and resilience yet the example of Vietnam is chosen while talking about successful development. Since the 1960s the Philippines had been regarded to have potential. However, its development is in oblivion now due to the lack of a supportive environment. Bangladesh needs to avoid such kind of fate.

The existing skills gap of the labour force also indicates the inadequacy in creating a supportive environment. Heads of different industries and enterprises often remark the scarcity of skilled labour force as a hindrance towards recovery and development. That is why it is imperative to link the issue of skills gap with the flaws in the prevailing education system. Other elements of a supportive business environment such as proper policy support and decreasing the non-wage cost of business may seem like very technical factors but all of these are part of people's lives that enable a supportive environment.

A big puzzle regarding the post-pandemic recovery revolves around the stimulus packages. Why the stimulus packages did not reach the small enterprises is a puzzle that requires more attention. The necessity of formalising the informal sectors is often emphasised in many policy discussions as a solution to this problem. However, in Bangladesh, formalisation is often interpreted as the overdoing of paperwork. In the farming sector, the largely illiterate peasantry has fantastically embraced technology. Tools such as ploughs are nearly obsolete in 2020. The low literacy rate was not a barrier for the farmers in integrating technology in their farming. Formalisation is needed to a certain extent but engaging the delivery agents in financing the SMEs is also a necessity. It is very important that delivery agents like MFIs (microfinance institutions) besides the formal banking sector be brought under discussion.

Besides the two major wheels, the third angle that needs to be considered is the fact that not everyone is capable of being resilient. There are those who are relatively badly endowed as evident from PPRC-BIGD Rapid Response Survey. According to 2019 poverty line data, 20 per cent of Bangladesh was poor but now the rapid response survey shows that an additional 21 per cent has been added to that rank. A supportive environment has to be created not only for the economy but also for the less fortunate.

The garments sector has played a major role in the growth of Bangladesh's economy but one single industry should not take on such a heavy load. It is time to look for new growth drivers to outgrow the dependence on singular industries if a sustainable inclusive development is aspired. The agriculture sector needs to be re-examined and not looked at as a backward sector. Countries like New Zealand, Denmark, and The Netherlands have shown that agriculture can be an economic super power if it is seen from a different perspective. The agriculture sector and the rural non-farm sector should be given more importance in light of the recent reverse migration caused by the pandemic.

Another aspect that has to be considered is changing the perspective regarding bureaucracy. The lack of coordination of the bureaucracy cannot be accepted as an excuse anymore; this excuse has been given for far too long. The problem does not lie with individual bureaucrats, it lies with the process. Covid-19 did not expose the healthcare services, it exposed the system that does not provide any publicly funded urban primary healthcare. How can a labour force be expected to be productive if the workers are not healthy?

The pandemic has put our country in a position where stopping all economic activity to look for a solution is not an option. We have to innovate on the run as it were. The production needs to be kept running while the stakeholders and the researchers analyse how to cope with this situation and deal with future challenges. But the policymakers need to create a supportive environment for everyone besides people themselves being dynamic and resilient. Otherwise, Bangladesh will be stuck in the bracket of only "having potential" like the Philippines and be forever caught in a lower-middle income trap.

Dr. Hossain Zillur Rahman is the Executive Chairman of Power and Participation Research Centre (PPRC) and current Chairperson of BRAC. [email protected]

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