SANEM, an economic think tank recommends to set up a monitoring unit to monitor the entire process of implementing the stimulus package, announced by the government
“If the government spends itself, monitors itself, it will have no check and balance. I appeal that a national monitoring committee should be formed immediately where representatives of government organizations, NGOs, civil societies, business organizations, and labour organizations will be included.
It is very important to establish such a monitoring system as soon as possible”, said Dr. Selim Raihan, Executive Director of SANEM, presenting reacting on behalf of SANEM's on the overall stimulus package announced by the Government of Bangladesh.
He said the Government of Bangladesh has announced a stimulus package in the wake of the Coronavirus crisis, which is more than three percent of our GDP and it may increase in the days ahead.
Welcoming this stimulus package on behalf of SANEM, he said the success of this stimulus package depends on a few things. Bangladesh does not have any past experience of implementing such a huge amount of stimulus packages. The type of crisis we are observing now due to Coronavirus is very different from the crises Bangladesh faced in the past, like cyclones or floods, and handled effectively.
A written statement, released by SANEM, also mentioned that most countries in the world also do not have this kind of experience, and Bangladesh certainly did not have this kind of past experience. So in this kind of crisis, when such a huge amount of money is being injected into the economy, the success of the stimulus package will depend largely on the management of this package by the government.
The first thing that matters is how the money in this stimulus package will be financed. I see four options. The first is that all the unnecessary expenditures of the government, for example, various
unnecessary development plans and unnecessary projects in the budget need to be suspended or cancelled immediately. The money saved from it must be utilized for the stimulus package.
The second is to borrow from international organizations like the World Bank and the IMF. We know that Bangladesh, as per World Bank's classification, has graduated from the low income to lower-middle income country status, and due to this Bangladesh has lost the privilege of accessing loans from the World Bank and IMF at a lower interest rate.
But in such a crisis time, Bangladesh must try to negotiate with the World Bank and the IMF to find out how to get loans at low interest and easy terms. We do not want any stringent conditions from the World Bank and IMF now.
The third way may not be very pleasant. However, the government will still borrow from the banking sector. We know that despite the current fragile state of the banking sector the government has already borrowed money more than what was planned for the whole financial year.
However, if the government borrows further from the banking sector, I think it should be done judiciously with sufficient caution. If the above mentioned three options are exhausted, then the fourth option will be to print money. But I think it should be the last resort.
Selim Raihan said, now the question is, how the money from the stimulus package will be used. There are two aspects to the stimulus package. One is to provide support for the disadvantaged industries and the other is to deal with food shortages and other problems of the poor and vulnerable people.
Who will get the money and how the money will be distributed under these two cases will have to be effectively managed. It is important to note that there are many shortcomings of our bureaucracy, and especially the lack of the efficiency of government management.
We can’t avoid these problems now. It is important to note that when there is a question of disbursement of a huge amount of money of the stimulus package, there will be people to take unfair advantages of it.
“Finally, I think that it is not just the government's responsibility to handle the huge crisis that we are going through. We all have a responsibility to work together to get rid of this crisis”, Dr. Raihan added.
