Watch out for recession risk
Economist Prof Rehman Sobhan yesterday called for formation of a "special parliamentary committee" to update lawmakers on the global financial crisis and its probable impact on Bangladesh.
“The committee will act as a link between lawmakers and the proposed taskforce to monitor the probable impact of the crisis,” said Sobhan at Unnayan Shamunnay's discussion on the economy at the National Press Club in Dhaka.
Different countries have rolled out stimulus packages to save their economies from the negative impacts of the global meltdown.
“Unless we know the real situation for sure, we can't give a stimulus package,” said Sobhan, also the chairman of the Centre for Policy Dialogue, a local think-tank.
The taskforce should be assigned to brief the government on the movement of economies, national and international, he said.
Unnayan Shamunnay organised the discussion in collaboration with Manusher Jonno Foundation, a nongovernmental development organisation.
Shamunnay also disclosed its flagship publication “Bangladesh Economic Outlook: September 2008-January 2009” at the programme.
Dr Atiur Rahman chaired the function where Shaheen Anam, executive director of Manusher Jonno Foundation, and Dr Selim Raihan, associate professor of economics at Dhaka University, also spoke.
In his speech, Atiur Rahman asked the government to form a taskforce immediately to deal with the probable impact of the global financial crisis on the economy.
Prof Sobhan came down hard on past governments in Bangladesh for their negligence in implementing recommendations by different taskforce committees.
The new government is also setting up a committee, Sobhan said, adding: “But it must involve professionals and experts."
“Many competent professionals are in the country. They also want to work. The government should make use of them,” the economist said.
Taskforce members have to know the global economic trend and when and how it could affect Bangladesh, he said.
"If the financial crisis affects remittances and exports, revenues and economic growth will also suffer."
In her speech, Shaheen Anam asked the government to take the taskforce issue seriously to ride out any fallout from the financial crisis.
Responding to Atiur Rahman's suggestion for a free-trade agreement (FTA) with India instead of a regional treaty Sobhan said: “The new government should open up a discussion for it."
Bangladesh's biggest opportunity may come from the transport sector if an FTA is signed between the countries.
Besides formation of a taskforce, Atiur Rahman said the government should review export, import, fiscal, farm and food policies to make a proper strategic plan.
He also suggested the government divert funds from the annual development programme to more productive sectors to create jobs.
In its report on macroeconomic outlook, Shamunnay said business confidence has increased significantly with the takeover of power by an elected government. Exports and LC opening for sectors such as raw materials, capital machinery and intermediate goods have also risen.
But the report says inflation is still high, especially in rural areas. The current food basket for calculating inflation is outdated, it says.