Logistics for stimulus bundle allocation to end up being finalised by in a few days
The federal government has started focus on devising a strategy to allocate its Tk 5,000 crore stimulus package for the export-oriented sectors announced by Prime Minister Sheikh Hasina on March 25.
Now, the financing ministry might form a committee -- where the business leaders would likewise be included - to work out the logistics.
The committee would scrutinise the claims made by the damaged export-oriented sectors. The cash will be disbursed after their want assessment, said the official of the finance ministry.
Previously, finance ministry officials possess held meetings with several trade bodies.
A method is likely to be finalised within weekly, he said.
Bangladesh's export sectors have been reeling from the affect of the coronavirus pandemic even prior to the virus's occurrence was established in the country as financial activities in its key export destinations including the EU, the united states and the UK have almost ground to a halt in recent weeks.
Garment comprised 84.21 % of Bangladesh's total exports worth $40.5 billion in fiscal 2018-19 and the sector employs more than 4.1 million workers.
The coronavirus pandemic in the Western world has led to lots of the brands shutting down their stores, forcing them to cancel orders or delay shipments.
By yesterday, $2.80 billion worth of garment export orders were cancelled by international sellers, according to data published by the Bangladesh Garment Manufacturers and Exporters Association.
Some 1,016 garment factories reported a lack of 862 million devices of work orders. The cancellation will affect 2.05 million workers.
But the household market-based industries and the offerings sector have now been affected as well as the government enforced a ten-day shutdown to avoid the spread of lethal, pneumonia-like virus.
Many workers in the informal sector have completely lost their incomes plus they don't have any coping capacity.
At the moment, the government's top most priority is to do something to ensure food for 100 % of the populace, Finance Minister AHM Mustafa Kamal told The Daily Star yesterday.
"Once the crisis has ended, we will need whatever steps we must take in order that the afflicted businesses and businesses may go back to their pre-crisis level. No sector would be overlooked. The Prime Minister's Office and the financing ministry are working onto it," he said.
The government needs to quickly devise a strategy to disburse the Tk 5,000 crore assist with support payroll in the export-oriented industries, said Zahid Hussain, a former lead economist of the World Bank's Dhaka office.
"Because the size of the assistance is definitely less than their regular monthly wage bill, a good formula is needed to determine who gets just how much," he said.
The BGMEA though has sought three a few months' wages for its workers.
One simple formula would be to allocate based on the number of personnel on each enterprise as a proportion of total employment on the sector. The assistance ought to be limited by blue-collar workers, most of whom could possibly be paid the same amount.
The veracity of info on the amount of blue-collar workers provided by the industries can be checked against info existing in the Directorate of Inspection of Factories and Establishment.
If it generally does not have the data, the federal government could randomly check the payroll registers of the factories directly.
"To make certain the blue-collar personnel actually get the amount of money, the disbursement could possibly be made conditional on submission of payment receipts signed by the staff. This will require the factories to give first and claim reimbursement."
There must be cash support initiatives to cover all the affected staff -- wage employed and self-employed -- in every sectors before economy gets back again to its normal equipment, he said.
Financing is a serious constraint on the federal government finances. As in prior episodes of livelihood crisis, the rest of the society must share area of the burden, Hussain said.
"I think they'll if they could find some trustworthy intermediary who'll make sure the amount of money gets to the intended target. We've many very well reputed non-governmental organisations who could possibly be used for this purpose," he added.
The government is seeking to secure $750 million from the International Monetary Fund and $200 million from the World Bank to tackle medical crisis and tide over the economy.
The Asian Development Bank has approved $300,000 in emergency grant. The Manila-based lender may provide $500 million in spending plan support to Bangladesh.
For the time being, the financing ministry is attempting to devise immediate and mid-term strategies. The export-oriented industries would be supported under the immediate plan as the rest under the mid-term program within the existing budget.
The ministry is currently looking to restructure budgetary allocation as much projects are on pause owing to the pandemic.
The non-export-oriented sectors will be supported from the funds to be freed up through the restructuring of the budgetary allocations and from the funds promised by the production partners, the finance ministry official said.
