We are heading towards a bumpy road, but are we prepared?
Bangladesh has made a decision to gradually resume financial activities, a decision that was taken at the same time when the daily detection of coronavirus patients in the united states is increasing -- from 418 on 26 April to at least one 1,034 on 11 May.
As of 9 May, a big section of the country is in a few state of lockdown; 395 upazilas in 49 districts have gone for partial lockdown up to now.
Such a decision for checking of business activities whenever there are risks of mass-spread of the virus across the country indicates that the federal government has taken a tough decision to walk in the bumpy road.
This bumpy road is apparently in the form of allowing monetary activities simultaneously with its effort to limit the risks of spread of coronavirus within the united states. Ironically, the issues aren't mutually exclusive and the former may harm the latter.
It seems that the government is under great pressure on several accounts, and, most importantly, in terms of having 'people in starvation' or 'businesses in trouble' despite undertaking various support measures in the sort of stimulus packages.
The question is the 'choice of timing' to allow the businesses and economic activities to transport on. Can an acceptable delay to get started on business operations could bring about better outcomes in the event of health emergencies?
More importantly, is the decision to allow monetary activities would cause more adversity towards monetary recovery and health safety?
If so, if the approach and initiatives for monetary recovery and health insurance and safety be different compared to what is being done or are being planned? In this backdrop, do we need to consider mid-course policy revisions to handle the health and economical emergencies?
Before end of April, the many measures, initiatives and activities which were undertaken in the united states have reflected the perception that health-related emergencies are the priority in all activities.
Among the important measures taken during this time period was the announcement of long public holidays, which forced all economic activities to turn off to reduce the chance of virus contagion.
A limited level of success was noticed because of various measures such as for example reduced number of coronavirus patients and the quantity of folks in quarantine, lower number of deaths and limited level of community spread.
Then from the finish of April, major businesses and economical activities were permitted to begin by maintaining safety instructions.
These include opening up of garment factories, accompanied by those of other industries, extending business hours for local level businesses, allowing people's movement from rural areas to cities, particularly to Dhaka city and nearby districts, and the decision to reopen the doors of shopping centres.
While large numbers of monetary activities have started following the announcement, a portion of businesses made a decision to stay shut.
Given the limited enforcement capacity, limited logistic support to monitor the compliances in a health emergency, and lack of awareness of men and women and businesses, the risk of community level spread will probably increase for opening up the businesses.
The World Health Organisation's advisory for maintaining social distance strictly appears weekly maintained. Hence, the 'new normal' situation has emerged in the united states.
However, many issues and concerns may have forced the decision to take the bumpy road.
It's true that there have been some early successes of the federal government by quickly giving an answer to the immediate crisis, followed by implementing numerous those beneath the various monetary policy and sectoral policy measures.
Given the huge demand for policy support as well as possible scope for leakages, a portion of individuals, households and businesses will be difficult to reach through these support measures and will be 'left behind'.
These portion of target groups would further improve the number of poor and the number of marginalised in the future.
Secondly, the constraints of resources perhaps make it difficult to ensure necessary support for the mark groups according to their requirements.
Had there been surplus resources in hand, the federal government could extend necessary support quickly and thereby persuade different target groups in abstaining from checking business activities.
Thirdly, the limited success of keeping persons in the home and reducing the city spread through the prolonged public holidays raises doubts about its success later on.
In this backdrop, the choice of the bumpy road might appear, under which the opening up of monetary activities would at least create scope for businesses on a restricted scale and would ensure the very least level of income of the personnel and the marginalised.
To address medical emergency, priority is given on following and maintaining safety protocols in commercial places and workplaces.
However, the amount of maintenance of safety protocol in congested cities and commercial clusters is still involved and therefore, medical and safety of personnel remain at risk.
The process of economical recovery and health insurance and safety upon this journey on the bumpy road is likely to be more challenging and time-consuming.
Firstly, at the household level, the expenditure pattern would be changed. It would much more likely be influenced by health-related expenditures, particularly for taking more protection against the coronavirus.
Considering the possible high risks of coronavirus contagion, the propensity to save lots of for future medical expenses would rise.
Consequently, non-food expenditures (other than medical emergencies) may drop at least for some time.
Such consumption patterns will be further enforced as a result of the possible rise of job cuts and salary-cut in the future.
Secondly, the growth of businesses (both formal and informal) will be slower given the restricted movement of men and women within the coronavirus outbreak.
Such limited movement would badly affect several types of formal and informal services.
The exception will be medical services, medicines and other kits, in which a significant rise in the demand would take place.
Thirdly, the demand for professional goods would rise at a slower pace, not merely because of limited money in hand to the persons but also because of risks of coronavirus contagion through those goods.
Fourthly, the production and export in export-oriented industries may be affected because of possible risks of contamination within the factories as well as risks of a considerable number of personnel being on leave due to illness.
Fifthly, the rise in coronavirus outbreak may limit the movement of foreigners in the country who usually work in public sector projects, private investments, procedure of private enterprises and in-bound tourism etc.
A portion of new enterprises will be at risk of turn off and a group of additional households would be further marginalised.
Beneath the 'new normal' situation, the policy stance of the federal government should be different.
It needs to take a more targeted approach and instruments to handle these new varieties of health and financial emergencies.
A primary focus of the approach ought to be on 'health-induced economical management'.
Under this process, the health-related issues have to be built in all economical activities.
The health-related protocols, guidelines and their implementation should be strictly followed in all sorts of economic activities.
This would require significant investment in installing health-related equipment, technologies, providing training and capacity-building for all employees and personnel and maintaining special health insurances for employees.
Besides, new modes of work need to be developed together with the mode of 'work from home' to lessen the increased loss of working hours.
All types of activities need to follow medical and safety guidelines suggested by the WHO and vetted by medical ministry.
Since the amount of recovery will be longer, and the amount of risk will be deeper for households and private sector in this new normal situation, the adjustment procedure for the firms (both formal and informal), particularly dealing with health emergencies and conducting businesses, will be unusually longer.
The challenges for the staff and their decent employment-related issues would be more complex.
The households' demand for social back-up programmes maybe for a longer time.
Moreover, each kind of economic activity needs to be designed, considering health protection.
Such issues demand more customised policy support instruments for the households and the private sector.
In other words, the currently announced fiscal, monetary and sectoral allocation would not be adequate to handle those new sort of challenges.
Moreover, those stimulus packages must be redesigned considering the health-induced risks in the economic activities.
Proposed national cover fiscal 2020-21 may consider measures in case of health, social safety nets, decent employment and small-scale businesses-related issues.
These include an additional rise in investment for the establishment of emergency health infrastructure and health management, special health and safety measures for personnel working in major professional clusters, extended treatment facilities for professional workers and employees working in various service sectors, extended relief support for targeted marginalised households, investment in workplaces for controlling occupational and health safety measures, support to small- and medium-sized enterprises, particularly those involved in various formal and informal sectors for a long period.
The national cover fiscal 2020-21 would supply the possibility to consider those measures.
More importantly, many of these measures might need to be accommodated on a need basis; and the federal government need to be prepared to undertake mid-course revisions of the policy measures through the next fiscal year.
