Year 2023 blessings or curse?
23 December 2022
Dr. Forqan Uddin Ahmed :
About 17 crore people of the country are counting the days in doubt, fear and thinking about the global recession situation of 2023. Already we have almost crossed the year 2022. On December 31st, after 12:00 PM, we will see a New Year opening episode. We are already inthe rankof developing countryfrom the status of least developed countries. But in 2026, will it be possible to achieve the status? But that is not an easy thing. There are many obstacles and challenges on this path. The world has already experienced various crises including wars. Experts say that recession will engulf the world. Along with other countries of the world, we will continue to suffer from the risks of noise pollution, air pollution and climate change. Besides, the polluted environment will lead to various natural calamities which will slow down our emerging economic growth. Therefore, in this reality, as a development challenge in the year 2023, we have to be careful about poverty alleviation, employment, healthy immigration, education, health and service sector development, nutritious food supply and social security including guarantee of living. Some say the recession will start from 2023 and some say the global recession will take shape in 2024. However, if we are lost to a global recession or indeed a global recession hits us, it will be a massive setback to the progress we have made so far.
Bangladesh is also seeing a sharp drop in remittance earnings, and increased imports are lowering the balance of payment (BOP) by outweighing the export income. Consequently, the foreign exchange reserves dropped to USD 35.808 billion by the end of October 2022, the lowest in the year according to Bangladesh Bank. Policies taken to cope with higher energy prices, such as rolling blackouts and closing of energy-intensive plants, might further aggravate the existing supply constraints. The protective exchange rate management has resulted in an emerging informal dollar exchange market, making policies ineffective. According to a recent World Bank report on South Asia, on the fiscal side, the cost of subsidies for food and fertiliser increased due to higher food and fertiliser prices. Besides, the upward-moving fuel import price raised the fuel subsidy cost, resulting in an increase in fuel price domestically by an average of 50 percent. According to the World Bank's projection, Bangladesh might face a fiscal deficit of 4.1 percent of its GDP in FY22 and 4.9 percent in FY23.
Besides the global crisis, Bangladesh has its own challenges to overcome. The country's LDC graduation in 2026 will bring several changes regarding market access and financial incentive programmes. We have a lower export-to-GDP ratio (less than 15 percent) than that of other low- and middle-income countries and comparators (e.g. Vietnam). The export basket is not diversified either, heavily dependent on RMG products. In the case of import, Bangladesh has a protective tariff regime, eroding competitiveness as well as reducing export survival probabilities. Non-tariff barriers and inefficient border processes are hampering our trade, too.
These challenges are all the more alarming given the current noxious post-globalized climate, where the rise of an intolerant majoritarianism finds easy prey in restive populations which are angered by the unconscionably uneven distribution of the spoils of economic globalisation. At this historic juncture, we contemplate Bangladesh's future with hope and some concern. Bangladesh has taken enormous strides in the past, and there is absolutely no reason why it cannot cross the hurdles it faces today. What we have to remember, however, is that this will only happen if we recognise the challenges and make a committed effort to address them. Unless supply disruptions and labor-market pressures subside, those interest-rate increases could leave the global core inflation rate (excluding energy) at about 5 percent in 2023 - nearly double the five-year average before the pandemic, the study finds. To cut global inflation to a rate consistent with their targets, central banks may need to raise interest rates by an additional 2 percentage points, according to the report's model. If this were accompanied by financial-market stress, global GDP growth would slow to 0.5 percent in 2023 - a 0.4 percent contraction in per-capita terms that would meet the technical definition of a global recession.
I am expressing the opinion that the future Bangladesh should be filled with the excitement of possibilities and dreams, hopes and aspirations. May all activities in 2023 and beyond be positive and a stepping stone to building a prosperous, self-reliant Bangladesh. Only then, the dream of the father of the nation will be realized and Bangladesh will be a placed in the position of dignityand glory.
Bangabandhu Sheikh Mujibur Rahman always wanted to see the smiles in the faces of poor and unhappy people of Bengal. In each of her speeches, Prime Minister Sheikh Hasina also pledged to work for the poorest of the poor. But the capitalism is a mere coincidence. It wants to destroy all humanity, our green paddy fields, rivers, forests, air, water - everything. In the Prime Minister's words, 'Money making is a disease, and illness.' When the rich are infected with this disease, they want to break the rules by breaking everything. Without a strong political commitment, the nature of this devastating disease can no longer save human nature. Our 2023 New Year's promise must be announced for eliminating inequality and New Year's resolution must be mandated as per promise.
(The writer is former Deputy Director General, Bangladesh Ansar & VDP).
