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How to overcome economic recession in Bangladesh?

INTRODUCTION

The Bangladesh economy has shown reasonable stability till now despite the threats

from depressed external developments in the back drop of the global financial turmoil.

Bangladeshs exposure to the contagion effects of the global financial markets has been

little and the countrys financial sector remains largely immune to the global financial

turmoil. With continuation of the present economic trends, the economy is likely to grow

at around 6 percent in FY09. In addition, major macroeconomic indicators have

remained reasonably stable in recent times which may continue in the near term

provided no major shock afflicts the economy.

The financial year 2009-10 (FY10), however, faces multiple downside risks. In addition

to the risks of natural calamities and other unexpected developments that the economy

routinely faces, the major additional risk for FY10 emanates from the fallout effects of

the global financial crisis. At present, the world economy especially the developed

economies have entered into a major downturn. Along with substantial growth

slowdown, the global economic situation is highly uncertain and subject to considerable

downside risks.

RECESSION

In economics, a recession is a general slowdown in economic activity in a country over a

sustained period of time, or a business cycle contraction. During recessions, many

macroeconomic indicators vary in a similar way. Production as measured by Gross

Domestic Product (GDP), employment, investment spending, capacity utilization,

household incomes and business profits all fall during recessions.Governments usually

respond to recessions by adopting expansionary macroeconomic policies, such as

increasing money supply, increasing government spending and decreasing taxation.

Many professionals and experts around the world believe that a true economic recession

can only be confirmed if GDP (Gross Domestic Product) growth is negative for a period

of two or more consecutive quarters. The roots of a recession and its true starting pointactually rest in the several quarters of positive but slowing growth before the recession

cycle really begins. Often in a mild recession the first quarter of negative growth is

followed by slight positive growth, then negative growth returns and the recession trend

continues.

Mohammad Badrul Alam, I.D: 091-062-E2 1
http://en.wikipedia.org/wiki/Business_cyclehttp://en.wikipedia.org/wiki/Business_cyclehttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Gross_Domestic_Producthttp://en.wikipedia.org/wiki/Gross_Domestic_Producthttp://en.wikipedia.org/wiki/Gross_Domestic_Producthttp://en.wikipedia.org/wiki/Capacity_utilizationhttp://en.wikipedia.org/wiki/Macroeconomicshttp://en.wikipedia.org/wiki/Gross_Domestic_Producthttp://en.wikipedia.org/wiki/Gross_Domestic_Producthttp://en.wikipedia.org/wiki/Capacity_utilizationhttp://en.wikipedia.org/wiki/Business_cycle


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CAUSES OF ECONOMIC RECESSION

An economic recession is primarily attributed to the actions taken to control the money

supply in an economy. The Federal Reserve is the agency responsible for maintaining the

delicate balance between money supply, interest rates, and inflation. When this delicate

balance is tipped, the economy is forced to correct itself.

The Fed sometimes deals with these situations by dumping huge amounts of money

supply into the money market. This helps to keep interest rates low, even as inflation

rises. Inflation is the rise in the prices of goods and services over a period of time. So, if

inflation is increasing, it means that goods and services are costing more now than they

did before. The higher the level of inflation, the smaller the percentage of goods and

services is which can be bought with a certain amount of money. There can be many

contributing factors for inflation, which include but are not limited to increased costs of

production, higher costs of energy, and/or the national debt.

In an environment where inflation is prevalent, people tend to cut out things like leisure

spending. They also budget more, spend less on things they usually indulge in, and start

saving more money than they did. As people and businesses start finding ways to cut

costs and derail unneeded expenditures, the GDP begins to decline. Then,

unemployment rates will rise because companies start laying off workers to cut more

costs, because consumers are not spending like they were. It is these combined factors

that manage to drive the economy into a state of recession.

EFFECTS OF ECONOMIC RECESSION

Generally, an economic recession can be spotted before it actually happens. There are

ways to spot it before it actually hits by observing the changing economic landscapes in

quarters that come before the actual onset. We will still see GDP growth, but it will be

coupled with signs like high unemployment levels, housing price declines, stock market

losses, and the absence of business expansion. When an economy sees more extended

periods of economic recession, it goes beyond a recession and is declared that theeconomy is in a state of depression.

The only real benefit of an economic recession is that it will help to cure inflation. In fact,

the delicate balancing act that the Fed struggles to pursue is to slow the growth of the

economy enough so that inflation will not occur, but also so that a recession will not be

triggered in the process. Now, the Fed performs this balancing act without the help of



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fiscal policy. Fiscal policy is usually trying to stimulate the economy as much as is

possible through such things as lowering taxes, spending on programs, and ignoring

account deficits.

WORLD ECONOMIC CRISIS AND BANGLADESHNow the world economy is moving towards recession and will only grow by 0.5 per cent

in 2009. The 2009 World Economic Outlook (WEO) shows that the global economy was

expected to come to a virtual standstill this year. In the last three months, the global

economy has taken a turn for the worse, as financial markets have remained under stress

and global output and trade have sharply decreased. The advanced economies to

experience the sharpest contraction in the post-war period with the United States real

economic activity to contract by one per cent, the Euro zone will contract by two per cent

and two and half per cent for Japan and emerging and developing economies will alsosuffer serious setbacks, as a result global growth is projected to decline sharply to 0.5 per

cent in 2009.

The global financial crisis had taken an increasingly heavy toll which was penetrating

through different channels across countries. The crisis had also made it much more

difficult and costly for

consumers and firms to

borrow, hence dragging

down activity and tradeand in emerging

economies. World Bank

in a recent press

briefing in Dhaka

projected that GDP

growth in Bangladesh

might come down to 4.8% in the current fiscal year from the Government projected 6.5%

as readymade garments and remittance inflow will suffer due to global financial crisis.

One international organization, ESCAP, said recently that fallout from global recession

to be less severe for Bangladesh. The organization mentioned in 2007 Bangladesh had a

good growth rate of 6.4 percent, despite recession and a devastating cyclone in 2008

Bangladesh achieved 6.2 percent and in 2009 it is expected that, with all limitations,

growth rate will be more than 5.5 percent. Experts said that it could be as the economy of

Bangladesh has a unique character that help the country to survive; as example the Asian

http://bdoza.wordpress.com/2008/10/15/world-economic-crisis-and-bangladesh/http://www.thedailystar.net/pf_story.php?nid=65146http://bdoza.wordpress.com/2008/10/15/world-economic-crisis-and-bangladesh/http://www.thedailystar.net/pf_story.php?nid=65146


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crisis of last century jolted Indonesia, Malaysia, Thailand and many more. But

Bangladesh economy was intact with expected level of growth rate and to face that crisis

agriculture sectors contribution along with the indigenous survival technique of rural

poor were the main factors active in economy and society. These factors are yet an

important strength for the government to overcome the adverse impact of global

recession on Bangladesh.

Recent global economic recession in Bangladesh is one of the major challenges to be

addressed by government of Bangladesh. As part of this problem, labor forces working

abroad, especially in Malaysia, are already facing the adverse impact of the global

economic downturn. Although the foreign Ministry and labor ministry of Bangladesh

said that this is not a very big crisis, initiatives have already been taken by concerned

ministries to resolve concern. By the time government of Bangladesh also constitutes a

high power committee including ministers, high officials and prominent economists.

Government also put its eyes on the labor force working in garment sector that almost

filled up by women. It is apprehended that export in coming years could be reduced from

expected level for the adversity of world economic recession. Cost of import, in many

cases, could also be enhanced, government and economists assumed, in coming years for

the same causes.

RECENT DEVELOPMENTS AND IMPLICATIONS TO

OVERCOME RECESSIONAt present, economic recession is the most talked about phenomenon in global arena and

revitalizing the economy is the common concern for the nations irrespective of wealthy

or poor. Very recently, finance

minister Abul Maal Abdul

Muhith announced a stimulus

package of 34.24 billion Taka,

which will be effective as blanket

coverage of power, agricultureand export sectors to help the

national economy from the

impact of the fallouts of global

crisis.The fund meant to be used over the last quarter of the current fiscal year includes

Tk 450 crore in cash subsidies for the export industries already hit by the recession.



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Of the measures, some will be implemented on an urgent basis during the last three

months of this fiscal year and the others in 2009-10. In April-June period, cash

assistance for export of jute goods, leather and leather goods, and frozen foods will be

increased by 2.5 percentage points. To foot the bill for the package, an additional Tk

3,424 crore will be allocated in the revised budget for the current fiscal year. Of the

amount, Tk 450 crore will be spent on cash subsidies to exporters, Tk 1,500 crore on

agriculture, Tk 600 crore on power sector, Tk 500 crore on agriculture loans and Tk 374

crore on social security. With this, the budgetary allocations will mount up to Tk 14,554

crore, from Tk 11,130 crore originally.

The additional funding for the social safety programmes will translate into a rise in the

number of pensioners and the amount of pensions. Tk 1,500 crore allocated for the

agriculture sector will be used to ensure smooth flow of agri-loans through

recapitalisation of Bangladesh Krishi Bank, Rajshahi Krishi Unnayan Bank and

Karmasangsthan Bank.

The amount set aside for power sector will be used to shore up the financial base of the

Power Development Board (PDB). Of the exports, jute and jute-made goods will see cash

incentives rise to 10 percent from 7.5 percent, leather and leather products to 17.5

percent from existing 15 percent, frozen foods and fish to 12.5 percent from 10 percent.

There is however no cash incentive for the ready-made garments and ceramics exporters.

The package will be implemented through immediate, medium and long term

programmers. Besides giving financial, fiscal and policy supports, the government will

bring about major administrative reforms. The policy supports to be executed during the

last quarter include disbursing 70 percent of the incentives immediately after primary

assessment of the claims and the rest 30 percent after necessary audits.

As the government excluded the garments sector and since the government did not grant

any cash subsidy for the garments sector, so government should a full-fledged

implementation of the policy support. Proper implementation of those demands will

help offset losses from the recession. The government could provide bank loans at asingle digit interest rate, relaxation of the Credit Information Bureau rules, termination

of the 0.25 percent tax at source, extension of loan rescheduling from the three-and five-

year terms to seven and 10 years and withdrawal of VAT on utilities. The government

should extend incentives to the textile industry and provide a Tk 3,424 crore stimulus

package that excluded the textile and RMG sectors.



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The present developments bring out nine areas that need priority attention within the

existing framework of the national budget of FY10 to help overcome from economic

recession. These are:

Setting investment priorities: The portfolio of public investment needs

to target productivity gains in key sectors including agriculture; electricity and energy

development; removing major bottlenecks in infrastructure; improvement in investment

climate.

Management of likely economic and social impact of global

recession: The adverse impact of the recession is likely to affect the countrys

economic and social life during the fiscal year, the extent of which is difficult to predict.

The budget needs to accommodate counter measures especially covering the external

sector and related domestic activities.

Resource mobilization: Measures to broaden the tax base and increase the

efficiency of tax administration; tax rationalization; increase non-tax revenues, capital

market Development.

ODA inflows: Increase inflows along with urging the international financial

institutions to come up with lending without the overly burdensome conditionality of the

past along with quick disbursing facilities since Bangladesh has sound economic policies

but is likely to face greater resource shortfalls during the year due to global crisis.

Size and quality of public expenditure: Align the public expenditure

program to strike the right balance between sectoral priorities and long and short term

exigencies; ensure project quality.

Sustaining export growth and remittances inflow: Export

diversification and attraction of higher remittance inflows through formal channels.

Support to agriculture and the rural economy: Areas of support;

adequate and timely supply of credit and inputs at reasonable prices; ensuring fair prices

and supply management; rural non-farm enterprises and SME development.

Human resource development-quality and equity issues:Adequate, affordable, and equitable access to quality education and healthcare services.

Social protection issues: Need to adopt cohesive and strategic vision and integrated

strategy for safety net programs; strengthening of existing programs and wider coverage for

hardcore and vulnerable poor and displaced persons due to adverse impact of global recession.

CHALLENGES TO OVERCOME RECESSION



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Bangladesh is passing a crusial time in economic sector. Though till now Bangladesh is

not seriously affected by the recession, but it could be affected in near future. So in

coming budget a number of objectives and targets which are in fact key challenges that

will need to be addressed in order to implement the various proposals in the Budget

FY10 Overcoming of the Crisis will indeed hinge on the efficacy with which the CTG,

and subsequently, the newly elected government, is able to address these emergent

challenges.

Enhance prospects of labor intensive growthHigher and sustainable GDP growth requires policies to bring more complementarities

between agriculture and industry. Similarly, pro-poor growth can be achieved through

more labor intensive investments. This is needed especially since recent Labor Force

Survey (LFS) data show an increase in the underemployment rate. In this context, growth

of agriculture and small and medium industries (SMEs) can have a positive impact. In

fact many of the export sectors have higher capital intensity compared with those

producing for the domestic market. Therefore, if world economic recession slows down

the export sector, policies for encouraging labor intensive sectors geared to domestic

demand can help achieve both ends: acceleration of GDP growth and pro-poor growth

through higher employment generation.

Support to agriculture

After the declaration of budget forFY2009 on 9 June 2008, the government has

increased administered price of urea fertilizer which came into effect on 11 June 2008.

The mill-gate price

of urea has been re-

fixed at Tk 10,000

per tonne or Tk 10

per kg while the new

rate will be at Tk

10,700 per ton or Tk

10.70 per kg at the

level of buffer stocks. The new farmgate price of urea fertilizer is fixed at Tk 12 per kg in

remote areas and Tk 11.50 in areas with well developed transport facilities which were Tk



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6.00 per kg. Prior to the increase, the official prices of urea were Tk 4,800 per ton or Tk

4.80 per kg and Tk 5,300 per ton or Tk 5.30 per kg at the mill-gate and the buffer stock

levels respectively. As is known, the government will continue to provide subsidy at the

rate of 15 per cent on the sale of other imported non-urea fertilizers TSP, DAP, MOPat

farmers levels.

In my view, this is grossly under estimated. Because of high price of agricultural

commodities and export restrictions imposed by major exporters of agricultural

commodities particularly food grains, Bangladesh must aim for high yield goal for

agricultural production. The CPD using recommended fertilizer doses to achieve high

yield goal by the Bangladesh Agricultural Research Council (BARC) published

Fertilizer Recommendation Guide 2005 has estimated demand to the tune of 35.2 lakh

metric tons of Urea, 5.9 lakh metric tons of TSP, 5.0 lakh metric tons of Mop and 3.2

lakh metric tons of DAP in FY2008/09. It is felt that the fertilizer demand in FY2009

should be revised by taking cognizance of the increased demand so that adequate

amount of fertilizer may be made available to the farmers.

If cash subsidy is given to fertilizer and diesel together (or fertilizer and electricity

together), the two may be integrated into a general farm subsidy. However, problems of

high or other costs may arise when supply or availability becomes limited. In view of this,

(i)the current practice of providing fertilizer subsidy may be continued along with

bringing more efficiency in domestic fertilizer production. (ii) Provide special allowable

facilities under WTO

rules to firms

adopting integrated

contract farming,

processing, and

marketing; (iii)

Rationalize the

agricultural extensionservices for technology dissemination and for producing quality and new products for

exports; (iv) Review the current distribution system of fertilizer and frame transparent

and well-defined criteria for allocating dealership of fertilizer at the farmers level to

ensure timely availability; (v) Support the development of vertically integrated

marketing systems (for example, involving the NGOs, private firms, supermarkets) for



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agricultural products; (vi) Encourage increased output of the fishing, poultry, and

livestock sub-sectors especially through providing improved veterinary services and

remaining alert against the outbreaks of diseases like Avian flu.

Agricultural Credit:Increased target for disbursement of agricultural credit

is fixed at Tk 9,000 crore in FY2009 against targeted Tk 6,351 crore in FY2008 and

actual disbursement up to April 08 was Tk 6,731.35 crore. Some private sector banks are

also coming up with initiatives to disburse agricultural credit through a number of

NGOs. Experience is showing that agriculture credit disbursement could be a profitable

business. If new technologies are encouraged through these credit facilities this would

help adoption of modern technology in agriculture.

Reigning-in High Inflation, Particularly Food Inflation

Although point to point inflation rate posted some decline (about 7 per cent in April,2008 compared to April 2007), average inflation in FY2008 remained high at double-

digit figures. This average figure, however, does not fully capture the implications of

price rise for the gene ral consumers since prices of essential items such as rice, wheat,

milk powder and vegetable oil, comprising a significant component of household

expenditure, outpaced the average food inflation in the past year. Whilst the possibility

of reducing the

prevailing high

prices in any

substantial way is

unlikely, and will

depend on both

domestic and global

factors, maintaining

stability in the food

market must be

seen as a key objective in implementing the budget in FY2008-09. Both market and non-

market interventions will need to be brought into play to achieve this. These will include

open market sales, a focused and strengthened role of Trading Corporation of

Bangladesh (TCB), inducement to broad based private sector imports, continuous

monitoring of the dynamics of supply and demand situation, maintaining appropriate

stocks, and carrying out fiscal interventions when required. For essential items such as



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rice, key to stabilizing price levels will be higher domestic Production in the upcoming

aman and boro seasons for which availability of good quality seeds and inputs, at

affordable prices, on time and in the required amount, will be necessary.

Augmenting Remittance FlowAs is known, remittance flow has emerged as a major source of foreign exchange earning

for Bangladesh. So it can play a vital role to overcome recession. While remittance

earning was less than $2.0 billion in FY2001, it is expected to exceed $8.0 billion in

FY2008. It is currently the single most important foreign exchange earner (in net term)

of Bangladesh. The number of workers leaving Bangladesh has risen three-times over the

last four years. Given the demographic dynamics, in coming years the market for service

and care-providers is likely to increase manifold in the developed world. Bangladesh lags

far behind

countries suchas Philippines

in terms of per

capita

remittance

earnings

because only

about 3 per

cent of hermigrant

workers belong to the category of professionals,and more than 50 per cent belong to the

unskilled category. There is a need to design a comprehensive medium term strategy to

augment the skills of the migrant workers. It has been seen that remittance earnings also

play a highly positive role in augmenting income of poor households, and reducing

income inequality. However, hardcore poor households have not been able to tap into

this market because of inability to mobilize the initial capital. There is thus an urgent

need to set up an appropriate mechanism (e.g., provide loan against future earnings,

impart skills) to enable these households to participate in the overseas labour market. In

this context, recent initiative of the Palli Karma Shahayak Foundation (PKSF) to

facilitate participation of hardcore poor households calls for careful examination for the

purpose of replication.



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Improving Quality and Enhancing Implementation of ADP

Public sector continues to remain a major source of service delivery in Bangladesh,

particularly in areas related to human resource development such as education and

health. The sector also plays a crucial role in terms of providing infrastructure and other

services that augment

private sector investment

and create conducive

environment for private

entrepreneurs. However,

in recent years ADP

implementation record

has tended to be quite

discouraging, in the

range of 75-80 per cent of

even the revised ADP, in most instances. Disbursement of ADP has been particularly low

in the case of a number of critically important sectors including power and energy which

have tended to adversely impact investment and productivity. There is a need to

strengthen institutional capacity of the government to properly allocate, implement and

monitor the ADP. It may be necessary to revisit the procurement policy to examine

whether amendments are required to expedite decision making in the course of ADP

implementation.

Support to rural economyThe government should set and ensure transparent and consistent rules for developing

the rural non-farm sector for as a part to overcome economic recession. Especially for

the (i) agro-farm system and agro-enterprise development including guidelines for food-

safety and negotiate favorable terms of access to international markets for rural

products; (ii) Facilitate the development of marketing facilities, knowledge-building to

accelerate agribusiness development and create environment for better participation of

the private sector; (iii) Invest in rural infrastructure especially energy and transport; (iv)

Address market failures through sharing regular information and adopting transparent

rules and regulations.

Energy Security



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Energy has emerged as a key constraining factor that inhibits investment in Bangladesh.

This is true for both domestic investment and foreign direct investment (FDI). Per capita

energy availability is the lowest in Bangladesh compared to other regional countries.

Potential growth in agriculture, industry and services has been severely limited on

account of lack of electricity and gas. What is particularly disturbing is that in spite of

having been declared a priority sector, pace of ADP implementation has been

consistently low in this sector. There is an urgent need to revisit the energy strategy if

Bangladesh is to register high GDP growth rate and ensure high pace of poverty

reduction. The draft Coal Policy needs to be finalized speedily. The CTG has initiated

offshore bidding process for exploration of gas and oil resources in the Bay of Bengal (28

blocks).

Legalizing black moneyThe issue is contentious and needs careful consideration keeping both equity and

productivity implications. Decision in this regard may be taken based on a study to

assess the issues of black money, impact of past policies of legalizing black money, and

identify future course of action. If such studies support, the government may consider

giving an opportunity to legalize black money in future under certain conditions. For

instance, the legalization process might (i) involve payment of appropriate taxes (and

penalties) such that those who pay taxes regularly are not penalized and people in

possession of black money are discouraged to carry on with such money in future; (ii)

impose strict conditions such as the legalized money can only be used for investment in

productive sectors such as manufacturing, SMEs, and other priority sectors specified by

the government and would not be directed to real estate, land purchase, or similar

activities.

Improving Terms of TradeBangladeshs export sector has demonstrated commendable resilience at a time of

challenging global environment (declining world trade, recession in major economies,

lower consumer spending). However, it is equally true that Bangladeshs terms of tradehas been experiencing a secular fall in the recent past. At a time when global commodity

prices are rising, Bangladeshs average export prices are on the decline. There is an

urgent need for intra and extra-RMG diversification as well as diversification of markets

to ensure higher value addition, movement up the value chain and better prices in the

global market. Technology up gradation, productivity enhancement, process and product



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modification and design capability improvement are becoming key factors in translating

Bangladeshs comparative advantages into competitive advantages. Realizing potential

export opportunities in ship-building, pharmaceuticals, light engineering and home

textile will require significant investment in technology and skills development. A

dedicated Technology Development Fund needs to be set up towards this.

Higher Mobilization of Investible ResourcesMobilization of greater investible resources for the entrepreneurs will be key to higher

GDP growth in Bangladesh. It needs to be ensured that government borrowings,

particularly from the banking sector, do not crowd-out the private entrepreneurs from

the credit market. The current buoyancy in the capital market will need to be supported

through appropriate incentives to business enterprises with good track record to get

listed in the capital market. Off loading of public sector enterprises, securitization, etc.

will need to be encouraged. Of crucial importance will be appropriate monitoring of the

securities market to guard against manipulation, insider trading, and creation of boom

and bust situations. Bangladesh Banks monetary policy, particularly interest rate

policy, will play an important role in terms of creating an environment that stimulates

savings and generates credit and equity for investors.

Moving Ahead with Institutional Reforms

The CTG has set up Better Business Forum (BBF) and Regulatory Reform Commission

(RRC) with a view to putting in place an investment-friendly environment for the

entrepreneurs. Both the BBF and the RRC have put forward a number of

recommendations which relate to introduction of e-commerce, doing away with

unnecessary regulatory barriers and putting in place systems that facilitate quality

service delivery by state owned entities and, at the same time, are consumer and investor

friendly. These initiatives are expected to reduce cost of doing business in Bangladesh

and provide encouragement to both domestic and foreign investors.

There is a need to vigorously pursue and continue with these reforms. It is hoped that the

newly elected democratic government will ensure sustainability of these reforms and

continuity of the functioning of these bodies so that reforms towards business friendly

and consumer-friendly environment in Bangladesh remain an ongoing endeavor.



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An Effective Safety Net ProgrammeBangladesh has passed through a challenging time in FY2007. Consecutive floods, Sidr,

production losses and high inflation have led to a situation where food security of people

below the poverty line has come under severe strain. It is to Bangladeshs credit that she

has been able to tackle the situation by bringing more than 10 million people under one

or other form of safety net programmes to overcome recession. Targeting and

entitlement of such social programmes need to be improved further to ensure that a

speedy and flexible response can be ensured depending on the needs of the hour. There

is a need for closer cooperation with local government bodies to raise the effectiveness of

such programmes.

Social welfare programs

(i)Undertake measures to improve the design, targeting and effectiveness of existing

programs; (ii) Undertake a comprehensive review of all programs and, if necessary, re-

orient the focus of government ministries from micro credit programs to other

innovative programs targeting specific disadvantaged population groups and locations;

(iii) Encourage and develop partnerships, if necessary, to introduce health insurance

schemes for the poor and vulnerable groups within the purview of developing

community health insurance; (v) Move toward an integrated social security policy

(following the example of the comprehensive social security scheme for agricultural

workers in West Bengal) in a phase-wise manner. This may start with a low-cost health

and safety insurance scheme for the RMG workers for which a fund may be created with

contributions from the RMG factory owners/workers/government and relevant

international organizations; (vi) Ensure effective management and operation of emigrant

workers resource and welfare centers to enhance their skills and ensure their health

needs and well-being. Give priority to emigrant women and men under the SME

development program.

CONCLUDING REMARKS

The government is well aware of the ongoing global economic recession impacts, and is

trying to overcome the problem successfully. The global recession could not weaken the



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country's economic base because of the government's efficient economic management.

The government should proper adjustment within the medium-term macroeconomic

framework (MTMF) so that the present realities and recent macroeconomic and sectoral

developments are reflected.

The government should also be given special attention in two issues, order to ensure its

proper implementation. First, revitalization of the institutional framework to ensure that

(i) ministries and agencies work together effectively and efficiently; (ii) various agencies

and ministries adopt effective ways of communicating and coordinating on strategic

issues relating to budget implementation; and (iii) effective donor coordination is

forthcoming to support the budget priorities. Second, effective and regular monitoring of

budget implementation, at both ministry/agency and national levels, needs to be carried

out using both input and output indicators to overcome the economic recession from

Bangladesh.

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