The world has changed substantially following the outbreak of Covid-19. The ongoing Ukraine war has added fuel to the burning fire. We have been experiencing a terrible global and national catastrophe, which has been unprecedented in recent human history.
In addition to the painful miseries caused to mankind due to the attack of Covid-19 and the Ukraine war, the normalcy in business operations has broken down all over the world. It’s entirely a new situation that calls for a new strategy to manage the business and survive. We have noticed that governments, organizations, and businesses all over the world, including Bangladesh have already taken various measures to control the costs of operation so that they can survive in this difficult situation.
We have been observing the scarcity of food, energy, and other essential items due to the severe disruptions in the supply chain and logistics management. Local and import prices of the commodities have gone up abnormally and company revenues have fallen drastically.
As a fast-growing nation, we are not an exception to the current extraordinary situation, and we have a responsibility to address the increasingly newer and more complicated situation innovatively. We need efficient management of our business to continue our operations unhindered, and to be able to survive and move forward smartly, facing the fierce competition ahead in the marketplace. It is important to identify where we can reduce or eliminate costs.
As lives keep moving on, we should think about how we can recover the losses being incurred by the Covid-19 and Ukraine war.
Moving forward
As an independent nation, we have been able to achieve quite impressive economic growth over the past 50 years. This could, of course, be much more if we could utilize the potential fully. Unfortunately, we are still failing miserably to express ourselves freely and openly with our thoughts and ideas both orally and in writing, observing increasingly maximum self-censorship at every step of life.
People have been suffering from the fear syndrome. Almost everyone is self-censored, which cannot help promote a dignified and self-respecting nation.
The common people of Bangladesh want to dream of a prosperous and satisfying future of their beloved country, and take pride as citizens of an independent country. At the same time, with the prevailing political situation, many people plunge into deep frustration, which we need to overcome for the greater interest of the country. However complicated the challenge, Bangladesh is a country of unlimited possibilities, from where Bangladesh can make a new beginning. Let me bring Singapore and Vietnam cases for our easy understanding.
Singapore continues to rise
From my regular visit to Singapore, I find it has always been a new, neat and clean, well-maintained, refreshing, and vibrant country. Singapore has moved from a per capita income of $500 in 1965 to over $65,000 today.
It’s not a miracle or surprise. The Singaporean people and its leadership have earned it through their sacrifice and dedication by promoting good governance, and establishing accountability and transparency in all spheres of national and personal lives. They continued stressing three key areas seriously and without any compromise: World-class education, the highest level of integrity, and the use of the latest technology, which have significantly contributed to helping eradicate corruption substantially. Singapore could be considered a learning curve for many aspiring nations of the world to move forward with dignity.
Let me now share my impressions of my recent visit to Singapore. After over two years I was able to visit Singapore from May 15-21, 2022, which was closed earlier due to Covid-19. The vibrance of Singapore I used to enjoy before 2020, I didn’t notice during my recent visit. I have seen many small and medium-sized shops and restaurants closed, meaning many people have lost their jobs. At Changi Airport, I found many shops closed, the reason being tourism -- one of the largest industries in Singapore -- was almost at the lowest level.
Singapore was and still is cautious about the Covid-19 outbreak. They didn’t take any risks in handling this catastrophe and have been ruthless to keep things under control throughout the pandemic. Although Singapore is now open to the people of many countries including Bangladesh, people use masks in vehicles, inside the office, and in any indoor gatherings as per government regulations. Of course, there are no restrictions in the open spaces. People respect this rule on their own.
Singapore has very smartly taken advantage of the Covid period for renovation, restructuring, and maintenance, which is visible. While I visited Marina Bay Sands Singapore, which has over 2500 five-star hotel rooms, I asked one of the managers there about the current situation. I was told out of over 2500 rooms 1500 rooms were brought under renovation, which was ongoing at the time. Then I asked about the rest of the 1,000 rooms in operation, and the answer was that the room occupancy was 100%. Business is coming back and Singapore is well prepared for it. They adopted the policy of survival, recovery of losses, and thriving through the emerging new business opportunities, which demonstrates their farsightedness as a nation.
Vietnam rising
One of the youngest and fastest-growing economies in the ASEAN bloc, Vietnam has experienced notable growth over the last three decades amid continuous market reform. Between 2000 and 2020, the country’s transformation from an agricultural to a manufacturing and services-dominated economy has seen it post an average of 6.4% real GDP growth each year.
However, with the Covid-19 pandemic hitting Vietnam in early 2020, disruptions in supply chains and the curtailment of external demand -- particularly in services trade -- have caused a rare slowdown in its economic growth. Real GDP rose by just 2.9% in 2020 and 2.58% in 2021, the lowest growth figures the country has experienced since 1986.
Although Vietnam weathered the initial waves of the pandemic well, the fourth wave in April 2021, caused by the Delta variant, created a serious shock to the manufacturing sector and stalled the country’s economic recovery. Despite the uncertainties arising from the recent appearance of the Omicron variant in Vietnam, the IMF projects that the country will experience a strong rebound in economic growth in 2022, with a 6.6% rise in real GDP.
With various innovative measures in place, Vietnam is gradually resuming normal business and social life. Domestic travel, the service sector, and other production activities, including those at industrial parks, have gradually recovered. Starting on February 15, 2022, Vietnam started gradually reopening its borders for international tourism, restoring the frequency of international flights to pre-pandemic levels in the following couple of months. In recent years, many international businesses have chosen Vietnam as a destination to invest in and transform their global production and supply chains. Despite the pandemic, FDI flows into Vietnam still grew steadily.
Considering the increasingly favourable situation in Vietnam, The AmChams in the Asia Pacific (AAP) held its 2022 Annual Business Summit in person in Hanoi from May 19-21, 2022, offering the opportunity to discuss the main issues facing American businesses in the region. In 2021, the two-way trade between the US and Bangladesh was over $10 billion, whereas during the same period the US and Vietnam two-way trade was over $112bn. In 2021, Bangladesh attracted $2.9bn as FDI, and Vietnam attracted $38.85bn during the same period. We can research to find the reasons for this huge gap between Bangladesh and Vietnam aiming towards developing creative ways to address the gap.
On economic zones
On economic fronts realizing the ground realities of Bangladesh, the government of Sheikh Hasina has decided to establish 100 economic zones in Bangladesh, which will create 10 million new jobs, and would add additional export earnings of $40bn in the long run. The government has also been encouraging the establishment of private economic zones in Bangladesh.
Immediate advantages of this initiative in Bangladesh include:
- Availability of competitive workforce
- Growing local market
- Growing middle class
- Friendly people
- Respect for foreigners
- Lucrative incentives for investment
- Homogeneous people
However, there are also some challenges:
- The gap between commitment and delivery
- Overall poor time management
- Lack of appropriate education, integrity, and the use of technology
- Government bureaucracy and red tape
- Shortage of dispute-free land
- Poor infrastructure in transportation, gas, power and energy, STP, ETP, CETP, port facilities, etc
- Lack of low-cost financing
What should be done immediately?
- The government must deliver what they have committed in terms of the creation of BEZA
- The government should arrange roads, power, gas, water, STP, ETP, CETP, etc on an urgent basis
- Government must guarantee low-cost small and large financing
- Implementing one-stop service (OSS) without failure
- Strict time management
- Honouring the commitment to deliver
- Helping the private economic zone developers in marketing
Bangladesh has become one of Asia's most remarkable success stories in recent years. The social and economic transformation that have taken place so far have been excellent, surpassing many neighboring countries. Another partial explanation for Bangladesh's progress is the success of its garment manufacturing industry. Bangladesh offered a better environment for manufacturing firms to achieve economies of scale and create a large number of jobs. However, Bangladesh still needs much stronger regulations to protect workers from occupational hazards.
The question is whether Bangladesh's strong economic performance can be sustained. As matters stand, the country's prospects are excellent, but there are risks that policymakers will need to take into account.
The issues behind the smooth and uninterrupted rise of Bangladesh have an intimate relationship with the economic growth and prosperity of Bangladesh, and I would like to briefly discuss a few relevant growth scenarios.
Optimistic outlook: I can see a ten-plus percent GDP growth for the country. It can be very ambitious but is, at the same time, doable. The logic behind this outlook is that if a country can move from 4% to 8% growth despite enormous challenges, 10% growth is also possible. 10% plus growth is needed for the nation and the people of Bangladesh deserve this. Of course, a 10% GDP growth is not a new thing on this planet. There are many examples around us, so Bangladesh can move towards double-digit growth.
Pessimistic outlook: The possible key hindrances against this ambitious but required growth are actual corruption and perception of corruption; poor infrastructure, and particularly inadequate transportation system; and uncertainty and unpredictability. The fact is that uncertainty and unpredictability have a huge impact on the growth and prosperity of the country. Nations like China, India, South Korea, Vietnam, and many other nations can plan for the next 10, 20, 30, 40, and 50 years because of predictability, which unfortunately we cannot see here.
Realistic outlook: We must be able to utilize the new emerging opportunities to transform the country to desired prosperity as soon as possible in a planned manner. Time management here is a big factor to consider. We need a friendlier bureaucracy so that inordinate delays could be reduced significantly and Bangladesh remains competitive internationally.
Padma Bridge
Bangladesh plans to be an economically developed, socially inclusive, and environmentally friendly country by the year 2041. The Government of Bangladesh has been relentlessly working towards achieving the Sustainable Development Goals (SDGs) by 2030. The self-financed Padma Bridge has been considered the most significant milestone towards the faster development of the Bangladesh economy. The Padma Bridge can contribute to fulfilling Vision 2041 as well as realizing the SDGs.
The bridge is considered to be the most challenging construction project in the history of Bangladesh, the steel truss bridge carries a four-lane highway on the upper level and a single-track railway on the lower level. It is the longest bridge (6.15 km) in Bangladesh. The construction of the bridge was considered to be especially challenging as the Padma River is among the most ferocious rivers in the world. The bridge, when commissioned, is expected to boost the GDP of Bangladesh by as much as 1.2%.
Bangladesh is a land of opportunities, and the challenge here is to reap the benefits of the emerging new opportunities before it is too late, and thereby ensure prosperity and happiness for its citizens. The time-bound delivery commensurate with the commitment is a key to unlocking the huge inherent potential.
As a nation, we need the right education, policies, processes, projects, integrity, and technology, and love and respect for fellow human beings. Most importantly discipline, tolerance, patriotism, optimism, national reconciliation, and pragmatism in all walks of life are needed to build a developed and dignified Bangladesh. The accomplishment of the above requires a growing level of critical thinking, planning, transparency, accountability, and innovation, associated with dynamic leadership and time-bound quality monitored actions.
A Gafur is the former Executive Director, The American Chamber of Commerce in Bangladesh. Email: amezagafur2021@gmail.com. A version of this article previously appeared in the AmCham Journal and is being reprinted under special arrangement.