Economy’s outlook

First of all, the reasonable political normalcy that the country was blessed with during the last two years, may shatter with the main opposition party going on a warpath over government’s policies towards it, Instead of reconciling and uniting the nation politically and socially, government itself is seen as an agent giving stimulus to national divisiveness and conflict according to the opposition. With no letup in these conditions, the runway political situation could cost the country and the economy heavily from violence and associated acts in the coming new year.
The flow of remittance may dry up. With no miracles happening and major manpower importing countries not showing a generous attitude towards Bangladesh, the unabated decline in manpower export and hence reduced remittances, the twin shocks could prove to be serious for the economy. The over $13 billion a year in remittances has been keeping the economy of Bangladesh afloat. This is no overstatement but a fact .Remittance sent by our overseas workers have been one of the two pillars, the other one being garments export, on which the Bangladesh economy stands today. But the earning from manpower export , is seen to be seriously threatened.
According to recent media reports, manpower export from Bangladesh has dropped from 2015. The remittance from workers after posting double digit growth for years, plummeted to a comparatively far lower level from two years ago year and never recovered. Needless to say, this is a disquieting development. The Bangladesh economy could receive a jolt not in a far off date but even during 2018 if the downtrends in manpower export and remittance receipts are not pulled up.
The Labour and Manpower Minister sounded upbeat, according to a recent report, that the present gloom would lift. According to him, manpower export would increase in the new year .Indeed manpower exports would take wings and fly if wishes turned out to be like birds. But that is not the case. Our manpower exports to the major host countries have fallen astoundingly and drastically.
The single largest importer of Bangladeshi manpower is Saudi Arabia (SA) followed by UAE, Oman and Kuwait. But the flow of Bangladeshi workers going to these destinations have turned into only trickles from 2014. For example, contrasted to Bangladeshis going to SA in hundreds of thousands even in 2008, the present number is in hundreds only. Not only the flow of our manpower to SA has decreased alarmingly, the Saudi authorities have shown no interest to allow Bangladeshi workers to switch to other jobs on completing contracts. But assurance of doing this was given to our Prime Minister during her visit there in the past.
A major importer of Bangladeshi manpower, Malaysia, has kept its door shut to Bangladeshi workers. Recently, it was reported that over 0.3 million workers may be expelled from that country fairly soon on grounds of overstaying and not getting their job contracts renewed.
The current patchwork attempts to send our manpower to new and novel destinations can be no substitutes for getting back the traditional and biggest markets in Saudi Arabia, Malaysia and the Gulf region. The relevant minister’s statement that decreasing manpower demand in these countries is the reason for the drop in our manpower export is not tenable. Even Hindu India and Nepal are rapidly and largely increasing their manpower export to SA and nearby countries.
Bangladesh earned $31.05 billion from exports during the period of July to May of FY’17, while it was $29.91 billion in the corresponding period of FY’16 .The country’s trade deficit increased by 42% in the 11 months from July to May period of the Fiscal Year 2016-17, marking $9.2 billion, while it was $6.45 billion in the corresponding period of Fiscal Year 2015-16.
From the present lack of pace in creating new power generation capacities and developing other sources of energy, the supply of energies as a whole seems destined to remain stagnant in 2011 like in the past years. But an adequate or good supply of energy is the most important precondition for better economic performance. The Prime Minister in her address to the nation sometime ago voiced optimism that the power crisis would turn manageable in the current year. But recent media reports quoted the Power Secretary as saying that the power shortage in the current year in relation to effective demand would be at least 40 %.
Government made some progress in the past in adding new generation capacities. But the situation can be likened to a monkey trying to climb a slippery or well oiled pole making some advances and then slipping to a lower level. The benefit of the new generation capacities could not show up because more than the amount of power produced through newly acquired generating capacities, a greater or equivalent amount of power supply continues to be denied to the grid from intermittent disabled conditions of the large and aged plants set up in the sixties and seventies. It has become like minus one nullifying the benefits of plus one. The gas crisis in the country is turning severe. Gas pressure is found to be too low in many areas of the Dhaka city. Households in these and the other affected areas are facing a tough situation in carrying out cooking and other indispensable activities as their gas stoves cannot be lighted properly from the low gas pressure.
The unserved households is only a part of the problem. The poor supply or practically no supply of gas is now poised to taken an even heavier toll from the economy. Hundreds of newly established industries could not go into production over the last two years as their liabilities from unserviced bank loans and other form of losses soared in this period. Now, even existing industries are shutting down rapidly in many areas from dwindling supply of gas or no supply at all. The gas crisis has turned extremely serious at Tongi, Narayanganj, Fatullah and Savar near Dhaka which is causing under production and shut down of many industries located in these areas. The gas crisis has turned the worst in Chittagong leading to industrial productivity hitting rock bottom in this second biggest area of industrial concentration in the country.
And all these things are happening when it should have been quite possible to keep the crisis much limited had there been timely action taken to this end. Experts are blaming the crisis entirely on lack of planning in time. They say that 40 million mmfcd gas could be supplied on a regular daily basis to the national grid from the Shahbazpur gas field in Bhola by now if only steps were taken earlier.