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Dhaka Tribune

Debapriya: Magic of remittance may come to an end

Experts call for continued supporting of the marginalized amid the pandemic

Update : 08 Aug 2021, 07:51 PM

The first month of the new fiscal year 2021-22 showed that remittances had sunk 28%, hence the magic weaved by remittance all these years for Bangladesh may be over soon, said Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue (CPD), on Sunday.

He made the remarks during a media briefing organized by the Citizen's Platform for SDGs, Bangladesh where a report titled "Delivery of the National Budget 2021- in the Context of the Pandemic, Ensuring Interests of the Disadvantaged People" was published.

There he said that in July, remittances had gone down by 28% from the same month of FY 2020-21, which was a cause of grave concern, said Bhattacharya, also convener of the Citizen's Platform for SDGs, Bangladesh.

In this situation, it remains to be seen whether the magic will end or not. It is doubtful whether exports will be able to return to its previous place or not, the economist also mentioned.

Remittance hit a five-month low in July at $1.87 billion due to lower number of working days throughout the month.

Inflows were 4% lower than June and 28% lower than July of the previous year, according to Bangladesh Bank data.

Remittance inflows hit a record high of $24.77 billion in the 2020-21 fiscal year.

Regarding the government stimulus packages, he said that although the government has so far taken 30 Covid-related support interventions (including five new ones) amounting to Tk1,28,194 crore, there is a very low share of fiscal and food support compared to hybrid ones (subsidized and interest based stimuli).

Also Read - Survey: 81% households cut food expenses during pandemic

He said there are 13 fiscal and 4 food support interventions accounting for less than 20.5% of the total allocation, while hybrids amount to nearly 79.53%.

Besides, nearly 39% of fiscal stimulus packages were disbursed, while over 75% of hybrid stimulus packages were dispersed within June 2021, he noted.

Dr Debapriya also said that the targeted GDP growth rate for 2020-21 fiscal was revised down from 8.2% to 5.2%, but the final figures would obviously be lower.

Prof Mustafizur Rahman, a member of the Citizen’s Platform said it is essential to strengthen direct cash transfer and open market sale (OMS) programs in the current fiscal year just not considering the present food inflation rate.

“Rice prices witnessed over 20% hike last year. If I say now that the inflation rate is 4-5%, it will not give us a real picture,” he said, adding the underprivileged are unable to to buy food because of their income lowering and food prices going up.

Human right activist, Advocate Sultana Kamal criticized the current budget for not having a clear support plan for the disadvantaged community in this Covid-19 pandemic, saying that the government feels self-complacency protecting the interest of some people.

“I would like to share my analysis that isolation has occurred between the government and the common people, which we have seen more acutely in this situation,” she said at the briefing.

If the budget is evaluated from this perspective, there is isolation between the government and the common people or community particularly the disadvantaged people, she said adding that the government may have relations of interest with the people who are surrounding it or who assist it politically and socially or any other ways.

Also Read - Survey: New poor in Bangladesh stands at 24.5 million

Noting that the national budget for 2020-21 had to be adopted last year amid unknown and sudden Covid-19 situation, she said this time the government got a full year before the preparation of the budget, but the new problems caused by the pandemic were not recognized there.

She said it is as usual budget having nothing for the recovery from the Covid-19 fallout. “Some ad-hoc based steps were taken and works have been done, but the steps, which are very essential to rebound from this distress, unfortunately remain missing here,” she said.

“Some 3-3.5 crore people have become poor. We have not found any clear plan to pay attention to them in the budget,” said Sultana Kamal, also the executive director of Ain o Salish Kendra.  

The study published on the day identified four major concerns of Sustainable Development Goal (SDGs) of Leave No One Behind (LNOB), including bringing people from the disadvantaged communities under the vaccination program on a priority basis, in partnership with the private development organizations and public bodies.

Other concerns included expanding the fiscal transfer and food support, ensuring their proper delivery by upgrading the database and engaging the community-based (non-government) actor, and keeping the food prices (inflation) low and stable by strengthening public procurement mechanism, OMS operation and expanding food for work (FFW) programs.

Dr Bhattacharya also mentioned that in developing countries, the flow of money needs to be increased by increasing direct financial assistance to people. In addition, food aid must continue, as 80% of the people who have lagged behind since the Covid-19 outbreak last year have reduced food expenditure.

On the other hand, Transparency International Bangladesh's Executive Director Dr Iftekharuzzaman said that this time the budget has excluded the poor.

“Although there is talk of allocation in the budget, it has not been seen how it will be spent, how much transparency and accountability there will be in government expenditure,” he also said.

“Besides, there is nothing clear in the budget to prevent corruption. I think this year has been an embarrassing, corruption-friendly, discriminatory and black money supportive budget. But we don't see specific guidelines in the budget on how to help the people left behind.”

Members of the Citizen’s Platform Shaheen Anam, Rasheda K Choudhury, Asif Ibrahim and Dr Mustaque Reza Chowdhury also spoke on the occasion.

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