1. How do you see the impact of this pandemic on the global economy and politics since things are not going to be the same after this?
I think about a hundred researches are currently underway to come up with different vaccines in different countries and I believe an effective one or more could be coming soon this year or early next year. And, when the vaccines will be available, I hope it would be easier to address the challenges of COVID-19. Also, some therapeutic medicines are already available online. One or two of them have been approved and I think that by the end of this year, more will be available to treat patients suffering from COVID-19 symptoms.
By any standard, this is a very difficult challenge. We have never come across a pandemic that is so devastating, but I am hopeful about the human ingenuity and capacity to address this type of challenge, as we have done it before. I am sure human beings as a community, not as a country alone but as an international community, will able to tackle the ongoing crisis. But the question is: will the world go back to how it looked before the current pandemic?
It is difficult to answer such questions right now. The fact, however, is that every major calamity, either natural or man-made, has changed the way we live and interact with others. And, since this is a worldwide problem faced by everyone from the most developed and powerful countries in the world to the relatively smaller and developing ones, we may have to adjust ourselves to a new reality.
One lesson that COVID-19 has taught us is that we have to rebuild the community with a new vision and take care of the interest of the society as a whole by investing more time, energy and resources on strengthening the social defenses, with primary focus on health, social safety network, food security and well being of all community members with a preventive outlook. It may not happen immediately, but major changes are already being widely discussed such as the structural, and perhaps the philosophical, inadequacies of the current economic model moored in the new liberal economic policy. Obviously, drastic or significant transformation in our thought and policy process is urgently called for, not to only overcome the current criticism but also to build a more inclusive, resilient and sustainable economic and social order with an eye on the future.
How will that work out? We don’t know for sure yet, but we can see some indications emerging around us. For example, in the USA, which is the leader of the capitalist world, the government was compelled to come up with a stimulus package of US 3 trillion dollars to support the industries, small businesses as well as individuals to cope with the impact of pandemic for a specific period of time. In the same vein, regular income support for certain groups of people is also being discussed, and indeed Spain has already adopted such a universal income policy. In my mind, this is an indication of some degree of awakening in the US society to take care of the disadvantaged groups in a systematic way, which may demand a redesign of the existing economic model. More robust attention to this genre of issues could be expected in the US in the coming months as the electioneering heats up. Same thing is happening in the UK, the birthplace of capitalism. And, all around the world, the governments are now getting more involved in addressing the health issues, social issues, the environmental issues and so on. All these clearly indicate that perhaps a major shift in current economic model is underway, which has clearly been triggered by the brutal and tragic onslaught of COVID-19.
In order to cure the patients and to prevent the disease from spreading, governments of many countries have also deployed a digital tracking system, a trend which will intensify in the coming weeks and months. In order to optimize benefits from such deployment of technologies, a new social contract has to be worked out. Collection of information and their effective utilization will only be possible if people trust their governments, otherwise they may not want to share information and may even lie. So, I believe, trust between the government and citizens has to be rebuilt before successfully implementing any such technological models. Demand for transparency as well as accountability will also grow in the process. In recent weeks, we have seen such an experiment has worked out in places like South Korea, Taiwan, and Germany, given the fact that the level of trust, transparency and accountability remain high in all of these countries. Parallel to that, we have also seen a different picture in many other countries, which are struggling to manage the impact of COVID-19 crisis. Therefore, governance will also emerge as another important element in the management of any such crisis in the future, with consequences moving in either direction, as one can see even today!
2. People are now hesitant to trust each other. Every time there is a crisis, we are advised to stay united, strong and fight the obstacles together. But the current pandemic is so unique that we have to stay away from others to save ourselves because we don’t know who the host might be. How do you think this situation will have an impact on the society and the economy?
Well, this is definitely a challenge, and indeed a strong wind of divisiveness, hatred, stigmatization and targeting is currently blowing across many countries and societies. Some argue that COVID-19 has brought the existing divisions to the forefront with an ugly face. Unfortunately, many leaders are deliberately fuelling such a negative process for their short-term partisan gains, while others pursue a policy which promotes class interests at the cost of precious human lives, which live at the bottom of economic pyramid. At the same time, one also notices heroic efforts undertaken by others to help the people in need and stand by them at this time of crisis. Going by this, one can say that staying apart should not mean that we stay separately. Although, we may not be physically together, we can still remain in touch and create a sense of bond, unity and togetherness.
Interestingly, technology could be our friend at this hour of need. Question, of course, remains as to how technology could be utilized to build a bridge across communities and demographic groups. I will keep my eyes and ears open and will not come to any conclusion yet but will watch the evolution of technology and social behavior very closely. I am hopeful about the human ingenuity and believe that we shall adapt to the emerging changes as human beings have done throughout the history. It may take some time, but the new reality will eventually be accepted. We must admit that we are all on a steep learning curve.
3. A blame game has started among the superpower countries like China, USA and recently France. How do you think this is going to have an impact on the global trade?
There are two elements here, one is the global trade and the other is the blame game. If we put aside the blame game and look at the global trade, we might see a serious trend of downturn. Already the IMF has declared that the global trade will contract by 3%. They have a reason to predict that way. Major global economic engines are slowing down and this will have serious consequences. Three major economic centers, US, China and EU are all on a down turn amid the lockdown and with resultant high unemployment. This might have a spillover effect for an unknown period of time.
If we look at the economic depression of 2007 and 2008, we can learn that it took about 10 years for the US economy to go back to pre-depression period and stabilize itself, and that was possible in the US, which is the most dynamic economy in the world. We are in a bigger problem than that of 2007/08 due to the COVID-19 pandemic, which has devastated all major economies of the world, and some of the fallouts are already visible. While the US had recorded the lowest unemployment rate in March 2020 at 3.5%, which was the lowest in the last fifty years, it has now leaped to 14.7%. Some analysts are arguing that the actual rate could be as high as 20%, with more people filing for unemployment support every day. So, the largest economy of the world may be nearing a situation of great depression like the one experienced in the 1930s where the unemployment rate was as high as 25%.
European Union, another large player in the global economy, has also faced similar nature of devastating impact of the COVID-19 pandemic, where millions of people have fallen into the trap of unemployment. The same goes for China although full information is not readily available. India, which is a growing economy, is also sliding back into negative economic growth territory. All these will have corresponding impact on the global economic landscape and many countries, including Bangladesh, may suffer from primary and secondary consequences, including growth, trade, aid, remittance and employment. Serious, sustained and creative efforts will have to be undertaken individually and collectively to overcome these sobering challenges.
Now let’s come to the blame game where China and US are accusing each other of their faults. I think this is more driven by domestic politics than anything else. Raised issues are ploys to score points with domestic audience and objectives. President Donald Trump is readying himself for re-election in November 2020, his presidency is clearly beset by a number of difficult challenges, including huge loss of lives due the ongoing pandemic, increasing unemployment, struggling economy and the widespread protests unleashed after the killing of George Floyd, an African American in Minneapolis in the late May 2020.
President Trump’s primary tool for reelection campaign was the booming US economy. Indeed, up until two months ago, he thought that he could win the election on the strength of strong economic growth. But now that economy has run into a crisis, his calculations must also change. His accusations against China could be seen from that perspective, which unfortunately has helped to cloud the bilateral relations in a significant way. China clearly feels besieged and is likely to take counter measures, which may look unpleasant, such as its recent move on Hong Kong. Rhetorical duals are likely to continue during the run up to the US elections in November 2020.
I think what is more important is to address the far deeper economic challenges, which have negatively affected all economies, including the two large ones of US and China. Indeed, regardless of who comes to power in the USA in November, steadying the economy will be the first and urgent priority. The ongoing pandemic has already changed many facets and practices of our life, and it is very much possible that major socio-economic recalibration will have to be initiated involving the government, private sector and other social stakeholders. Since issues of safety, wellbeing, equity and justice will be prominent in the post-pandemic situation, increased role of the government will also become necessary.
Other countries will have to change their policies as well, including China. Because the way China is doing business and running its economy may not be sustainable in the long run. Since the US and EU economies have plummeted, China will face huge challenges in terms of marketing its products. In such a situation, some unintended consequences may befall it, including the slowing down of its economy and potential rise in unemployment with possible repercussions on the legitimacy of governance.
We are in a circular process, and everyone will have to bear this economic pain. Everyone will have to come forward with their creativity and solve this problem through a more dynamic nature of co-operation and collaboration, be it bilateral, be it regional or be it global. Regardless of what we say now, tomorrow the economy will start pinching us, and we’ll have to think and act differently!
4. If these developed and influential countries are in such a devastating state, where do you think Bangladesh is headed being a developing country?
It may sound disquieting, but the reality is that we can also suffer collateral damages from the unfolding global economic down turn. Our remittance and trade are likely to be affected deeply and badly. Take the case of manpower export, which brings in huge remittance for us. All Middle Eastern countries are facing a slump in their economies due to the fall in the oil prices. Their income has hit rock bottom and so they’ll stop their construction and developmental work. As a result, the migrant workers, who went there for work mainly in the service sector, including the construction sector, say from India, Pakistan, Bangladesh, Nepal, etc. have lost and continue to lose their jobs and may have to eventually return home. The process has already begun. Consequently, one can expect two sets of impact.
First, if a significant number of migrant workers are laid off for any reason, our remittance will fall. Second, in such a scenario, we may have to support those who return and make arrangement either to put them to work domestically or arrange for their return abroad. Needless to say, both could be problematic, at least in the short term. Therefore, we may have to deal with a double layered problem with the migrant workers in the coming months.
Same goes for our exports. 95% of our exports go to US and EU markets. Both of these markets are now in great difficulty. If the demand for our products goes down, our exports could be affected. In addition to impact on business, investors and entrepreneurs, it will affect 4.5 million people of our country, who are working in the garments sector. So, this is yet another area where we can expect considerable degree of volatility.
For a country like Bangladesh, there are essentially 3 major sectors which contribute to our economy. They include agriculture, manufacturing/export and service sector/remittance. Two of them will be affected in the ongoing economic turmoil. Our agriculture remains as our best hope in the short term. It can feed us, but its strength to carry the economic load is limited. It is still driven by subsistence approach and has not been adequately mechanized and diversified. It is also unlikely, we can reach such a goal in the short term, and so some degree of pain we may have to endure if the current global economic down turn prolongs. We must acknowledge that we all have difficult times ahead of us and we must utilize this difficult period to actively think about restructuring our economy on a futuristic and sustainable basis.
In the meantime, the government will have to come up with some contingency planning. Indeed, there are discussions about a 3-year recovery plan and so on. The government will have to take into account the nature of possible hiccups and get ready to manage the economy within a very tight space.
One good thing about Bangladesh is that we are a nation strongly moored to our society. Our social strength is our real strength. For the past 50 years we’ve overcome many obstacles by working together. If we can face the upcoming challenges together and solve them, we’ll surely see better days ahead.
5. Recently, there’s been news that USA is shifting their factories from China to South Asia and some other countries. So, do you think Bangladesh will be able to take advantage of such a large labor force and resources?
I wish we could. In fact, we are building Special Economic Zones and earmarked some of them for certain countries, including India, China and Japan to attract investment from those countries. We have a liberal FDI policy and have seen some growth in FDI in recent years, although relatively modest compared to other neighbouring countries. So, we are creating some incentives for any foreign investors, including those who could think of relocating their factoring from China. I have seen some press reports recently on this subject. That is all about aspirations.
What about the reality? Let us accept the fact we have to overcome some structural handicaps. One of them is the labor force, which is still at the low end of productivity vis a vis other neighbouring countries. Many factors contribute to this process, including education, skills and management. True, we have a huge labor force, but the new economy will be driven more by expertise and technology, not only on physical labour alone. If we can learn and train our work force in light of those needs, we can surely make the most of the available opportunity, but if we can’t, the opportunities will be missed, as we have seen in the past. For example, healthcare is a major area where a lot of openings will be coming in the post COVID-19 period, but they will obviously need skilled people. Look at Japan, they’re slowly re-opening their economy to outside workers. How could Bangladeshis take advantage of that opportunity and benefit from such an opening in Japan?
Interestingly, Vietnam is doing much better. They are more knowledgeable, are technologically advanced, have better education, and hereby are generating more productivity. If we really want to transform our people into human resources, we’ll have to drastically reform our education system and manage skills in a more scientific and relevant way. We have to also improve our value system to align it with global work culture and integrate technology into our system to make it more productivity oriented. Indeed, if we want to capitalize on the growing potential, we’ll have to review the situation objectively and professionally and possibly equip ourselves to make the most of that emerging potential. Otherwise, having a huge population may not translate itself into an opportunity.
6. It is being said that leadership should be expertise-oriented. If you talk about health minister, then he should be from the health-sector related background. Same goes for agriculture minister and others. Around the world everybody is talking about that. What’s your opinion regarding this matter?
Expertise is important, but leadership is different. A leader has to have a vision and inspire people to work towards that vision. Expertise could be an added value. Generally, those with expertise tend to be more evidence-oriented, like Chancellor Angela Merkel of Germany, but she is a unique case. Leadership in South Korea, Taiwan, and Thailand has been quite impressive in recent months. Their way of handling COVID-19 pandemic has been effective! Leadership is beyond expertise but yes, having expertise could help to understand and deal with complex issues better.
7. What knowledge or skill should the young generation have or develop in order to perform well in the current situation or in the future?
For the new generation, the future will be different. There is a quote stating, “Think globally, and act locally”. Just because we live in Bangladesh, it doesn’t mean that we shouldn’t think globally. Think about Sejuti Saha, the young Bangladeshi doctor, who had researched on the genome of COVID-19, contributing to the global understanding and knowledge about the way the coronavirus works. So, we should all find ways to reach and connect the global community and global knowledge hubs to think big and act big.
The first skill would be to acquire knowledge – which doesn’t mean only a degree, but a good understanding about our existence and environment in a fast-evolving context and try to shape it in an inclusive and sustainable manner based on scientific model rather than on emotion and stereotyped ideas. What is important in the fast-changing global environment is to develop a strong interest in acquiring deep knowledge and love for life-long learning, particularly among the youth.
The next one would be to get familiarized with the emerging technology. Within the next 5-10 years, AI, robotics, machine learning, and big data will be extensively used everywhere, including in Bangladesh. Even the manufacturing sector in Bangladesh has already been increasingly utilizing mechanized devices for better efficiency in their production units. In the process, the growth rate of employment in the RMG sector has declined over the last five years. One has to review it objectively and monitor the trend so that we could equip our youth to take advantage of the changing needs in the world of work. So, it would be better if the younger generation in Bangladesh gets involved in such processes without any further delay.
The third skill required would be the capacity to collaborate horizontally. Just because one is working on something in Bangladesh, it doesn’t mean that one should keep it a secret and confine it to oneself. One can work that out with someone else, say in South Korea, USA or Thailand, and make both the process and outcome better. I call it horizontal connectivity, and this needs to be explored more aggressively. In this context, certain kinds of values, including respect for diversity, empathy, tolerance and inclusiveness, in other words democratic values in action, have to be learned, cultivated and utilized to get the maximum benefits out of our interactions.
Another big issue with the Bangladeshi youth is that they suffer from communication skills deficits. Occasionally, a false sense of superiority of our language tends to overshadow our vision about others. We love our mother tongue, so we learn it, but that should not make us oblivious to the existence and usefulness of other languages and cultures. In Europe, every graduate learns at least 4/5 foreign languages, although they live in almost a proximate environment. When we talk about global citizenship, we have to be globally connected and language is the doorway to enter into the minds of other people. So, another mandatory skill for the younger generation is to be multilingual. The fact is that in a globalized world, the more languages we know, the better access we shall have!
The final skill is to learn to be humble. If one is humble, one can listen, learn and generate trust and friendship among others. If one is arrogant, one loses respect, connections and in the process alienates themselves. We must appreciate the fact that our future lies with other people throughout the world. If we love them, they’ll love us! In order to do that, we have to learn to be humble, proactive, creative and appreciative of the value of others in our lives. Only then we can get the world to look at and work with us. And that is the future I anticipate for Bangladesh and its youth.
8. Because of this crisis, everyone is losing their jobs regardless of their age – seniors and juniors. What would you suggest them to do during this situation?
This is a challenging time for the young generation since they’ve just entered into the real world and are experiencing economic downturn and rising unemployment.
If one has a set of skills, one can think about using those skills to create something good for oneself. By definition, jobs will become scarce in the wake of the pandemic and economy will face many challenges. What one can do is put one’s skills to good use in light of the growing social and economic demand structure.
I’m seeing that some young kids are partnering up with the departmental stores to deliver their products to the customers. They’re coming up with simple but effective solutions in such dire times. Imagine that such challenges may continue for the next 3/5 years. One should ask oneself what one can do, what one loves to do. Here one can collaborate with one’s friends, or someone who thinks alike, so that one could build something great together!
One can also learn new skills so that one can grow one’s demand in the market. Digital platforms have been giving a lot of opportunities lately. New types of entrepreneurship can also be explored. If one can build a trustworthy network, one can become an entrepreneur in a supply chain. Not only the young but also the middle-aged people can also try for such an entrepreneurship journey.
There are thousands of boys and girls in the rural area who are knowledgeable regarding various things, but don’t know how to utilize them because they don’t have access to the global community. We may help them to reach out and grow their business. One of the handicaps of older people is that they are generally afraid of technology. If someone learns about technology, one can become an entrepreneur even at the age of 70. So, I think becoming an entrepreneur is not limited by age.
M. Humayun Kabir
Acting President, Bangladesh Enterprise Institute, Dhaka