Despite global economic crisis, Bangladesh remains resilient
As with the widespread economic headwinds across the culture, Bangladesh hadn't remained immune to the ripples stemming from the Ukraine-Russia war. The war had plunged the global economy into a precarious position, jolting macroeconomic stability, and undermining the developed western economies of developing countries. Nonetheless, in an era of the gloomy economic situation, Bangladesh--albeit endured the shocks of the Ukraine-Russia war--however remains arguably robust in the region, defying the portents speculated by some quarters.
Global Headwinds: The series of global crises had considerably affected the global economy, by exacerbating supply-chain tangles and skyrocketing inflation. This had ratcheted up inflation across the world, due to the interconnectedness of the global economy. The United States, the pivot of global finance, and the supplier of the greenback had been battered by the adverse consequences evoked by the pandemic and other emerging crises.
Due to the strength of the dollar, and the ubiquity of the currency in global financial interaction, an edgy dollar invariably sent shivers into the veins of the global economy, undermining the economy of the developing countries. In this context, the countries which had registered sustained growth and transcended the morass of underdevelopment, risk relapsing into underdevelopment. Thus, the pandemic sparked global headwinds, ensuing widespread disruption and exacerbating the outlook of the global economy.
Bleak Case Studies and Gloomy Spectacles: In the context of the unprecedented economic meltdown, the world economy which was reeling from lingering economic distress was unraveled due to the shock stemming from monumental global crises. The Sri Lanka typifies this economic meltdown, as the follies of the country's policymakers had been compounded by the widespread economic whirlwind, to plummet the economy into an unconscionable state, driving desperation and destitution in a country that had been considered the economic miracle.
The case study fixated the economists to the extent that, the specter of the Sri Lankan crisis had gripped the imagination of economists. Much of the countries which were undergoing transitory economic shock, were considered as bracing for the fate of Sri Lanka. However, this defied reasoned economic analysis, as a cocktail of economic crises combined to push the Sri Lankan economy from the cliff. Besides, the portents of imminent economic debacle had been always in the cards. Besides, the failure to resolve the political mismanagement compounded the economic woes of Sri Lanka.
Some quarters in Bangladesh had also seized on the Sri Lanka-spectre and peddled gloomy economic theories to prove the perceived vulnerability of the economy. Nonetheless, despite being buffetted by innumerable economic crises, and the vociferous premonitions of certain quarters, the economy of Bangladesh remains commendably robust, bolstered by macroeconomic prudence of the country as well as the deft navigation of the country in face of economic challenges supported by timely government policies. While much of the world had been crumbling from the unprecedented economic slowdown, Bangladesh proved resilient by registering positive economic growth.
Besides, the critics considered Bangladesh's remittance earnings were destined for an irrevocable decline, which reinforced the gloomy economic forecast that the country will confront a series of economic upheavals in the future as remittance remains a bulwark of the economy. Nonetheless, this argument has been negated as the remittance earnings of the country have witnessed positive growth in the previous months, due to commendable policies undertaken by the government. Thus, this dispels unwarranted gloominess that racked the imagination of the economist. Furthermore, the country's reserve had endured an evident slump owing to the surging dollar, which had put a strain on the country's import costs and debt liabilities. Thus, this is only a distant echo of the worldwide crisis, and far from an anomalous reality unique to Bangladesh, as some analysts are inclined to contend. Besides, the benchmarks of the country's economy remain robust, as the foreign reserve of the country can sustain the economy for six months, while even in countries like the United Kingdom, the foreign reserve can only keep the economy afloat for only one month. Furthermore, the debt-to-GDP ratio in Bangladesh remains far below the alarming levels, thus instilling confidence regarding economic viability amidst global whirlwinds.
Prudent Policies Steer Bangladesh: The sustained economic growth of the country has been predicated upon the prudent and timely policies of the government and the prudent macroeconomic policies that guided the country's economy in the right direction. However, as the crisis loom worldwide, the policymakers cushioned the economy through the adoption of timely policies that aided the country to navigate the economic stress.
Firstly, to restore stability in the economy and to arrest the dwindling economic forecast, the central bank devalued the taka against the greenback thrice to cushion the economy from the shocks emanating from the soaring dollar price.
Secondly, the government had undertaken a tough stance regarding the import of luxury and non-essential items, to accrue more revenue to the state coffer.
Thirdly, the government extended the expatriate community opportunity and opened avenues for the investments of the expatriates into the economy, to tap into the economic potential of the diaspora. Besides, the government had incentivized the remittance, to channel the remittance through the legal process, thus consolidating the country's foreign reserve.
Moreover, timely and prudent policies maintained the resilience of the country's economy at a time when the global economic crisis buffeted the world economy. The lessons gleaned from Bangladesh and the policies undertaken by the country remain exemplary for the country's that are confronting overwhelming hurdles. Moreover, despite the declining trends of the global economy, the policy measures of the government fostered the economy of Bangladesh and steered the economy through unforeseen economic challenges.
The writer is a strategic and foreign policy analyst. His areas of interest include global political economy, strategic rivalries and governance failures.