Solving the present economic crisis

Dr. SM Jahangir Alam :

The global economy has been struggling for a long time.

After the covid-19 pandemic, the Ukraine war has hit the economy hard.

In this economic recession, all countries, starting from developed countries, are adapting to the situation and adopting various strategies to maintain economic stability.

Various steps are being taken to deal with food crisis, increase investment and employment.

Sri Lanka that went bankrupt has now turned around.

The economic crisis has largely taken over.

The success of the country’s turnaround so quickly has shocked the world.

The shock of the global economic recession hit our country well.

An alarming decline in exports and investment, dollar crisis, inability to maintain reserves as per the IMF standards and its downward trend, above all rising inflation, bear witness to the fragile state of the country’s economy.

Two reports were published in an English daily yesterday.

In one of the two reports, private investment is at its lowest level in the last 21 months.

Private credit growth fell to single digits (9.82). Another report said apparel exports to the United States fell by 20 percent.

Investment is one of the prerequisites for economic development of any country.

Without investment, there is no employment, no production and no export.

Garment is the biggest export sector of the country.

This sector alone accounts for about 83 percent of total exports.

Besides, remittances and expatriate income are playing a major role in the economy.

The rise in reserves depends largely on these remittances.

It appears that these two sectors have been trending towards negativity for the past few months.

Garment exports and declining remittances and investment are very bad news for the economy.

The largest market or main destination for the garment sector is the United States followed by the countries of the European Union.

The negative impact of this sector is definitely weakening the export sector.

According to economists, garment exports to the US are falling due to inflation and bank interest and difficulty in opening letters of credit (LC) due to the dollar crisis. Already, the value of the dollar has increased by 30 percent compared to the rupee.

However, there are economic reasons for the decline in exports, as well as global politics.

The United States has repeatedly said that the upcoming elections in Bangladesh should be free, fair and acceptable.

On the other hand, other countries including China, Russia are supporting the existing politics. A kind of age war is going on with this.

Observers think that there is a negative trend in the economy.

According to them, most of our export destinations are European Union countries including the United States.

These countries are making various statements ahead of the elections, which are embarrassing for the government.

In contrast, China and Russia directly support the government’s position, which is no less embarrassing.

This situation can put more pressure on the economy. Exports, foreign debt, investment, etc. are under pressure.

According to observers, whatever the government says, the country’s economy is in good shape.

But the real picture gives different information.

The negative trend in other indicators of the economy including exports, investment, reserves hardly match the alarming picture of the economy with the government’s statement.

To handle the pressure of the country’s economy, the government should adopt the right decisions and practical policies.

Experience should be learned from how other countries of the world are handling economic pressure.

Focus should be on increasing investment, exports and remittances.

If the government does not take proper and effective steps in the economic transition, the crisis will intensify.

Therefore, we have to clarify the position in that direction, from which the opportunities of investment, export, employment, etc. will increase.

The government has to take decisions carefully and intelligently.

You have to take the right decision.

(The writer, a Bir Muktijoddha, is former Tax Commissioner and Director, Bangladesh
Satellite Co. Ltd.)