Economists and businesses feared that Bangladesh’s export income and remittance, two life lines of the country’s economy, would be hit hard if a global economic recession occurred in the near future. They said that the US-China trade war, Brexit issue, Iran crisis and many other developments were leading to a lot of uncertainty in the global economy. Economists attributed the recent slowdown in the US economy, dismal German economic performances, lowest ever industrial production growth in China in recent times, contraction in the economies of Argentina, South Africa and Iran as warning signs of a possible global economic meltdown. ‘Bangladesh’s economy can be hurt in two areas – exports and remittance – if there is a global recession,’ World Bank lead economist Zahid Hussain told New Age a few days ago. ‘If there is a low-scale recession it will not have an impact on our economy but any deep recession would hit it hard,’ he said. Zahid apprehended that a wide recession might hurt Bangladeshi’s export diversification as nearly 16 per cent of the country’s exports consisted of non-readymade garment products. If there was a deep recession in the world economy the prices of oil would fall and Bangladeshi workers working in the Middle East would lose their jobs, having an adverse impact on the country’s remittance, he said. ‘The ongoing US-China trade war poses a risk of recession … though we are getting short-term benefits from this trade war and it is very insignificant. We need to diversify our trade in a large way,’ Zahid observed. To face the challenges of a possible global recession Bangladesh should also go for economic diversification, he said. ‘Times are challenging. Messages are mixed,’ Bangladesh Garment Manufacturers and Exporters Association president Rubana Huq told this daily on Monday. ‘With the US-China trade war going on we would gain, with Brexit we would lose, [but]with a downward trend in the global economic performance we would be in between,’ she said. ‘It is, however, difficult to predict anything [for sure] except that only value addition will make sense and only the best that is sustainable will survive,’ she viewed. Policy Research Institute executive director Ahsan H Mansur told New Age on Sunday that the US-China trade war, Brexit issue, Iran crisis, economic slowdown in the US and many European countries were giving a signal for a strong economic slowdown worldwide. ‘Although we export low-end [garment] products, it is difficult to say whether Bangladeshi RMG exports would be adversely affected if there is a recession,’ he added. He further said that if there were a recession many companies in the Middle East would be out of business in which a good number of Bangladeshi workers were employed. ‘Workers may lose jobs if it happens, which will cause a negative impact on the country’s remittance inflow,’ he went on. Mansur opined that Bangladesh needed to go for economic diversification in order to face the impact of possible economic recession, adding, ‘But that (economic diversification) might not be possible due to lack of required investments.’ `We have to take initiatives to capture more [low end] apparel manufacturing relocation from China. We are getting some benefits from the US-China trade war… but we have to emphasise gaining large-scale relocation benefits [from this opportunity],’ he said.
