IMF predicts that the global economy will decrease by as much as 3% and, if worse comes to worst, by as much as 11% in 2020
The World Health Organization (WHO) has recently published six conditions for countries to determine the right time to lift the coronavirus lockdown. These guidelines pertain to a nation’s ability to properly test and control the disease transmission as well as a community’s education, awareness and acceptance to live under a new normal. It is the advice of WHO that until the conditions are met, a country should limit all external activities and continue nationwide lockdowns. However, while maintaining the status quo is absolutely essential for the safety and health of the people, can the economy survive long enough for a nation or the world to receive a “go ahead” from the World Health Organization?
This is the dilemma we are faced with right now – economy or safety?The International Monetary Fund (IMF) declared a global recession at the end of March, and many are expecting this current economic downturn to suppress beyond a recession to a depression that will be equivalent to the one in the 1930s. On their recently published World Economic Outlook for 2020 and 2021, the IMF predicts that the global economy will decrease by as much as 3% and, if worse comes to worst, by as much as 11% in 2020 – with advanced or developed economies suffering the brunt of the impact. For Bangladesh, the previously projected GDP growth of 7.4% now feels likes a fleeting dream as the new projections by IMF estimate a heavily-reduced GDP growth of only 2%. The World Bank’s projection is a bit more hopeful, if nothing else, with GDP growth forecast to be between 2-3%.
But the sliver of hope for Bangladesh,even in this dire situation, lies in the IMF projections, as well as the organization forecasts,of a strong recovery and growth for the next fiscal year. An astounding 9.5% GDP growth is projected for Bangladesh in 2021 as the pandemic dissipates in the latter half of the current year and the global economy turns itself back on.Then again, this hopeful projection is based on the assumption that Bangladesh will quickly be able to control the pandemic and reopen all economic activities, and there will not be any further waves of outbreaks in the future.
Several countries have already started to ease some of the restrictions in place to resume industrial activities – going against the advice of WHO. Countries such as India and Pakistan have reopened some “low-risk industries” in rural areas and hinterlands that are comparatively less affected by coronavirus. Several Indian airlines are also planning to resume domestic flights from May 4 and international flights from June 1.May 4 is also the date the US and its leading coronavirus forecasting model, which is used by the White House, predicted to start easing some of the social distancing restrictions in the country. Even though there are many critics of the prediction model, the US president is adamant on lifting the restrictions as soon as possible to stimulate their economy.
India, Pakistan, the US are not the only countries to begin easing on the restrictions and resuming economic and industrial activities. Several European countries – even the greatly affected nations of Italy and Spain – are easing the coronavirus lockdown. The focus is very much on reducing economic damage, and education, at the moment. But they are not taking this decision lightly, and they are finding a better balance between health and economy without sacrificing one for the other.
So, the million-dollar question is, can the same be done for Bangladesh?
It is undisputed that Bangladesh has one of the lowest coronavirus testing percentages in the world. If recent events are of any indication, taming the pandemic may be much harder for us than some other nations. But we are in dire need of a solution soon. The layoffs are beginning to rumble throughout Bangladesh. LafargeHolcim Ltd has recently announced layoffs at its Dhaka office. The head of media and public relations of PHP Family stated earlier in April that the employment status of 8,000 workers in their Chittagong-based steel mill is now uncertain. This is the case for many industries and organizations all over the nation. Unemployment is sure to rise as well as the plight of informal workers who relied on regular work.
The outcome of the coronavirus pandemic, as many experts say, will lead to a brand new way of life and a brand new world. WHO, IMF and all the other authorities are trying to guide and advise what needs to be done. But it is up to the nations and the communities themselves to figure out what they are capable of and what they can do to get their commerce and their people up and running again. So,the question remains:when is the right time to start the economy back up again?