Rural economy will be under pressure: Experts

former caretaker government finance adviser Dr AB Mirza Azizul Islam  says, The rural economy is unlikely to be able to absorb the pressure

Bangladesh’s rural economy is going to be under pressure as a large number of people from urban areas are returning to their respective villages losing the sources of their earnings due to Covid-19 fallout, says an expert.

“The rural economy is unlikely to be able to absorb the pressure,” former caretaker government finance adviser Dr AB Mirza Azizul Islam told UNB.

He said the agricultural sector, the driving force of the rural economy, is going to be overburdened with the returnees though the sector contributes 15% to the GDP while provides 40% jobs.

D Aziz said mechanized tools are being used for increasing productivity in the agricultural sector and their use is going up day by day, reducing the demand for farm workers.

Distinguished Fellow of Centre for Policy Dialogue (CPD) Prof Mustafizur Rahman said the rural economy obviously will be under pressure. “This pressure will continue as long as the health risk, caused by the pandemic, is there. This is going to be a huge burden on the already slowed down rural economy.”

Dr Mustafiz pointed out that the large number of manpower who used to go abroad every month for jobs are now stuck in rural areas due to the current situation. “More than 600,000 people used to go to abroad from Bangladesh. They’re now there in rural areas. Given the current situation, it can be said the economy is under huge pressure,” he said.

Talking about the support to the rural economy to cope with the pressure, Mirza Aziz, also Visiting Professor at BRAC University, said the government should help this section of people through its relief distribution measurers.

For medium- and long-term measures, he said, the coronavirus will hopefully disappear or its intensity will reduce in the coming months. “And at that time, we’ll have to put in our all-out efforts to restore the production and supply chain,” he said.

Mirza Aziz put emphasis on guiding the SME sector by the government after the Covid-19 and quick restoration of production in big industries in full swing.

Dr Mustafizur Rahman said the government should expand its social safety net programs to include the people going back to their villages. “The cash transfer scheme can be expanded from the existing five million.”

He stressed the importance of spending money on renovation of rural roads and investing money in public works to engage a good number of returnees in those programs.

“The stimulus package of Tk5,000 crore that allocated for agri-loans should be implemented quickly so that people living in rural areas could start their economic activities which will be helpful to engage more people,” he said.

Prof Mustafiz said if the government can carry out these initiatives properly there will be a qualitative change in the economy which will absorb some pressure.

He, however, emphasized addressing the health issues at the moment. “And after that, the government should pay its attention to revamping the economy. Currently, nothing is going on for these two sectors, there is a question about the policy matters as well.”