The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, states in its year-end report that the cold waves of macroeconomic indicators have further chilled the bones of the economy of the country in the year 2019.
“The headwinds of macroeconomic indicators have put further downward pressure on the economy despite the assertion of achieving growth of 8.13% in the halfway mark of 2020,” says the research organization.
Elaborating, the Unnayan Onneshan reasons that investment is stagnant, unemployment and inequality are mounting, export earnings have dipped, revenue collection has shrunk, inflation is on the rise, and import has also dropped, depicting an economy with all signs of downturns.
While noting that the clientelistic network is gulping most of the resources, the organization cautions that if this menace cannot be stopped, the unwanted cold wave will further aggravate the country drastically.
Observing that there is a mismatch between targeted and actual revenue collection which is basically driving the government to lessen public expenditure, the Unnayan Onneshan adds that the government is borrowing money to bear the recurrent public expenditure from the banks which is creating liquidity crisis in the banking sector.
Additionally, private investment has not flourished rather stumbled due to capital crisis in the banking sector plagued by the ever-increasing default in the absence prudent enforcement and compliance mechanisms, despite a series of concessions given to large defaulters.
Referring to the continuation of the deficit in the balance of payments, the overall deficit in the balance of payments in July-October period stood 229 million US dollars, which was 444 million US dollars in the same period of the last fiscal, despite having the so-called good news of higher remittance inflows. “The ongoing hardship of the families of expatriates in the midst of economic pressures is pushing them to send all of their income to the family. They are sending more despite of being in debt, hardship or in misery,” adds the report. Moreover, the number of overseas employments declined to 604,060 during January and November of current fiscal from 684,962 of the same period of 2018.
Despite the rise in remittance, the Unnayan Onneshan notes that the foreign exchange reserves have not increased much. The reserves stood at 32.43 billion US dollars during July-October period of current fiscal and have not crossed the 33 billion US dollars mark since 2017.
Observing that the structural transformation in the economy has not occurred yet, it cited the examples reduced productivity and lack of crop diversification in agriculture, falling export growth in RMG and reduction in manufacturing capacities and shortfall of the skills in the service sectors.
The Unnayan Onneshan observes that the rate of poverty reduction has declined. “This negative pace of the rate of the poverty reduction does not reckon the story of high GDP growth of the country,” opines the organization.
The research organization also notes the dangers of mounting inequality amidst jobless growth and outflow of capital amidst institutional fragility.
Terming condition of environmental crisis as “sacrificed beneath growth” the UO states that “The issue of environment is not brought to concern as the definition of development has been confined in the dungeon of visible infrastructural gestures.”