The impact of COVID-19 on global economy in the year 2019 had multiple dimensions. Manufacturing sector was locked down for a while to avoid health crisis, people's movement was stopped, transportation especially air connectivity was broken down. World Trade Organization (WTO) projected that the slump in international trade could be between 13 to 32 per cent last year. International Monetary Fund (IMF) projected that World's real GDP growth would be 3 per cent, GDP growth of the EU countries 7 per cent, Latin America and the Caribbean GDP 5.2 per cent, and that of the Middle East countries 2.8 per cent. Similarly, US GDP growth was 5.9 per cent, Bangladesh GDP growth target was reduced to 5.2 per cent from the 8.00 per cent of the previous year.
Due to the COVID shock, closing down rate of small and medium enterprises (SMEs) was 52 per cent in OECD countries and 60 per cent around the world. ILO reported that more than 70 per cent industrial operations were closed during the hard lockdown in all continents. ILO forecast that 25 million people would lose their jobs around the world due to the pandemic. Governments around the world came up with different types of fiscal and non-fiscal bailout packages to rescue respective economies and private sector from the adverse effects of the Covid-19 pandemic. Similarly Bangladesh government also came up with 1 lac 21 thousand crore taka bailout package to rescue Bangladesh economy from the negative impact of Covid -19.
Private Sector's recommendation for the second phase of stimulus package is being considered by the government of Bangladesh. In such a situation, we may think of the role that the private sector itself as well as development agencies, economic development organisations, trade bodies (like FBCCI, DCCI, MCCI, BGMEA, BTMEA and BKMEA etc.) and individual companies can play to foster economic recovery.
CONNECTING COMPANIES WITH THE SUPPORT MECHANISM MADE AVAILABLE BY THE GOVERNMENT: Many companies are in need of government stimulus support but they do not know what support they can avail from which organisation. Therefore, trade bodies and other economic development organisations may conduct awareness building campaigns to inform their members what types of stimulus support they can avail from which government agencies. Similarly many small and medium enterprises (SME) need stimulus support but they cannot avail these due to shortage of documentary evidence in favour of them. In such a case, trade bodies and business intermediary organisations can help respective members and clients prepare necessary documents in time and apply properly for government support.
DETECTING AND ADDRESSING PROBLEMS IN CRITICAL SUPPLY CHAIN AND SERVICES: Many companies could not release imported raw materials from the port during the lockdown as cargo service, clearing agents, testing facilities and many other relevant services were unavailable. Subsequently, warehouses and yards in the port arena became overloaded and port jam made the situation terrible. As a result, government charges demurrage for unreleased goods which became burdensome for the business community soon after the lockdown. These types of problems could be identified and addressed with relevant government agencies.
ADVOCACY FOR ALIGNING GOVERNMENT POLICIES WITH THE NEW NORMAL: Government rules and regulations having day to day impact on business operations were made for normal situation. Many of those policies have to be reviewed due to current reality in this pandemic. Government officials may not fully understand the current reality, on the other hand, individual companies may not be able to make it clear to the government offices. Therefore, the trade bodies and other economic development organisations like BSCIC, SME Foundation etc. should come up to place the new reality to the respective authorities to make government rules and procedures compatible with the situation.
EDUCATING MEMBERS ABOUT THE CHANGING MARKET DYNAMICS: Many small and medium-sized enterprises (SMEs) are unable to understand what types of changes could happen to respective sectors in terms of product demand, buyers' requirement, government rules and policies. As a result, they may face losses in the coming days if they cannot take an appropriate decision. At the same time new opportunities could come up for businesses related to ventilators, pumps, masks, disinfectants etc. Trade bodies and other economic development organisations have a great role to play to educating general businessmen in this regard.
SHARING FOREIGN BEST PRACTICES IN RESPECTIVE FIELDS: Adoption of foreign best practices is a cheaper, faster and effective way to address a particular problem. Therefore sharing best practices could be the best way to run production process during this pandemic.
ADOPTING LOCATION SPECIFIC APPROACH TO DEVELOP FACT-DRIVEN AND INTEGRATED ECONOMIC STRATEGIES: Doers are the best experts in every field. Therefore trade bodies can share their experiences with relevant government ministries and agencies to adopt fact-driven and integrated economic development strategies to ensure growth during the pandemic.
All of the above could facilitate a collaborative public-private mechanism for economic recovery. In the absence of this combined effort, post-Covid economic recovery may take time and the fallout on the economy may be found difficult to tackle.
Md Joynal Abdin is Secretary, Dhaka Chamber of Commerce & Industry (DCCI)