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Economists warn of severe impact of second COVID-19 wave

Staff Correspondent | Published: 23:05, Jul 21,2020

 
 

Economists on Tuesday said that the government should remain alert over the possible second wave of coronavirus infection as the consequences of the second wave of the outbreak would be severe on life, livelihood and economy.

At a virtual dialogue, they also said that the country’s economic recovery would slow down in absence of reforms in several areas including revenue administration and financial system.

Policy Exchange of Bangladesh and UK-based Oxford Policy Management organised the webinar titled ‘macroeconomic adjustments to the COVID-19 pandemic: consideration for Bangladesh’.

OPM principal economist Stevan Lee presented the keynote paper at the webinar moderated by PEB chairman M Masrur Reaz.

Lee said that the government must not forget about the risk of the second wave of coronavirus outbreak as the virus might come back without effective containment of infection.

Bangladesh should become alert as impact of further lockdown to contain the second wave and possible global recession due to the fallout of the outbreak would be severe, he said, adding that it would put the economic recovery and sustained livelihoods at risks.

Stressing the need for reforms, he said that medium- and long-term recovery would depend on reforms, particularly in public finance management and revenue sector.

Policy Research Institute executive director Ahsan H Mansur said that the country was struggling to manage the disease and still the ratio of positive case to the total tests was very high in the country.

He said that that policy response including fiscal incentive for economic recovery was modest.

He said that there were some good signs that export would turn around but the concern was that the country was not learning lessons from weaknesses in the areas of health, education, revenue, investment and some other macroeconomic issues. But there are no serious discussions on reforms in the areas, he said.

Economy would be much stronger in post-COVID-19 period if the government would focus on reforms in these areas, he said.

South Asian Network on Economic Modeling executive director Selim Raihan expressed concern about the rising rate of poverty, inequality and unemployment.

He said that policy response and actions taken so far were not enough and there was lack of coordination in addressing the grave impact on these sectors. COVID-19 has exposed the institutional challenge in crisis management and institutional weakness and mismanagement would haunt the country in recovery process in post-pandemic period, he said.

‘Economic recovery will be slower or the country may not achieve the recovery it looks for in absence of reforms in these critical areas,’ he said.

Business Initiative Leading Development chairman Abdul Kasem Khan, also former president of Dhaka Chamber of Commerce and Industry, said that it was not possible to assess the economic recovery without knowing the actual infection situation.

The government should not give any false impression about the infection situation as it will hamper recovery process damaging the domestic market as well as global business relation, he said.

Bangladesh Institute of Development Studies senior research fellow Nazneen Ahmad said that the government should keep quality of recovery, reduction of poverty and inequality, improvement in health and education system in mind while planning for midterm recovery.

Bangladesh Investment Development Authority executive chairman Mohammad Sirazul Islam, General Economics Division member Shamshul Alam, finance ministry additional secretary also macro and budget wing head Azizul Alam, Chattogram Stock Exchange chairman Asif Ibrahim, OPM country director Josh Chipman also spoke at the programme, among others.

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