The Centre for Policy Dialogue (CPD) has
recommended formulation of a new stimulus package for the small businesses,
which are struggling to recover from the coronavirus pandemic impact.
The CPD, a research think-tank, has
suggested further for reducing the role of bank in the new package to reach its
beneficiaries faster.
The recommendation was made in a CPD
report titled “State of the Bangladesh Economy in FY2021” on Monday.
Presenting the report at an online press
conference, CPD Senior Research Fellow Towfiqul Islam Khan said that while
large and medium enterprises were ahead in recovering Covid-19 losses, the
small and medium businesses were lagging far behind. Considering this, the
current recovery speed is K-shaped.
Globally, the possibility of a K-shaped
recovery is being discussed widely. This implies that stimulus packages and
liquidity support will help large industries and public organsiaitons recover
at a faster pace while they will lag behind.
In the report, CPD said, Bangladesh is
likely to follow a similar shape as smaller firms, people belonging to the low
income category and the poors in general have been affected disproportionately
and have not received adequate government support. Given that SMEs are
important sources of employment, the slow recovery of this sector could lead to
further rise in inequality. This could jeopardise the sustainability of the
recovery. Therefore, policymakers need to chart out the recovery path in a
manner that does not leave out the weaker but critically important sectors of
the economy.
The stimulus announced by government for
recovery from coronavirus was not distributed equally. Half of the announced
stimulus in agriculture sector was not distributed till January. Along with
this, Entrepreneurs of small sectors are not getting stimulus for not having
relationship with bank, Towfiqul Islam added.
“If the government expenditure and money flow to the people
increase, it raises the demand of products and services, and subsequently
result into new investments and employments opportunities,” said CPD
Distinguished Fellow Md Mustafizur Rahman.
“But the government reduced the expenditure in this difficult
time, instead of using the opportunity,” he added.
Suggesting the government to increase its expenditure
instead of saving now, the CPD Distinguished Fellow added that initiatives
should be taken to create employments in the rural areas.
The implementation process of rural infrastructure reform
projects needs to be strengthened, he said further.
Regarding the sources of financing, Mustafizur Rahman said
that loans are still available from abroad with low interest. Apart from that,
the bank also has a surplus liquidity of more than Tk2 lakh crore. In this
situation, the size of the government's budget should
be increased without thinking of deficit.
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