Adversity throws up opportunity, not necessarily the negative kind. Unfortunately, those grab the headlines. Pfizer and Moderna have the right to raise product prices but the timing is wrong. Having satiated the requirement demand of wealthy nations, both are increasing prices. Last year alone Pfizer's profits were up US$15 billion just from vaccine production. Obviously, their 'responsible' shareholders want more.
This will hit desperate developing and third world countries, home to much of the world's poor, scrambling for vaccines. It puts more pressure on the United Nations and World Health Organisation's (WHO) COVAX programme that sought to bring some discipline in the riot of vaccine procurement. Not a single world leader has, as yet condemned such profiteering in the middle of global chaos. Throughout history there are examples strewn of such abominable practices. It doesn't quite fall in the true category but where is Corporate Social Responsibility (CSR)? COVAX itself has had mixed impact with dodgy health infrastructures in African countries failing to use vaccines, storing them beyond expiry dates and dumping them. There's little the WHO can do about that.
As of now, nothing along those lines have been reported in Bangladesh barring the inevitable. Stray reports of vaccines going missing and pushing injections without vaccines in them are but two such incidents. They are shocking but matters would have been worse had the Prime Minister not made vaccines available free of cost. On the contrary even the developed world has been confronted with a new factor. A large proportion of the population just don't want to be vaccinated because their belief in science has been shaken. While that is understandable, while scientists have moved from a sure-shot prevention theory to 'you still might be infected', not being vaccinated isn't a choice. Immunologists frown on vaccine therapy when possible side-effects aren't evaluated. The greatest worry is whether such vaccines compromise the body's natural immune systems. That takes years and governments were forced to bite the bullet and err, if you like, on the side of caution.
As the world muddles through shut-downs to opening up and then closing down again, some have to look ahead to economic concerns during and after the pandemic. The heart-wrenching pleas for assistance by those sorely in need has hit an eerie silence. Perhaps they realised that little help would be forthcoming and if so, only address immediate needs. Maybe, this time round they were better prepared for the current lock-whatever it is with scraps of savings. Without question their faith has begun to flag. They have been forced to put livelihood ahead of the risk to lives. This runs contrary to what scientists say putting lives before livelihood. What's an economy for if there are no people? People create economies, not any other way.
The self-conflicting dilemma has flummoxed most governments including ours. The imported theory of balancing the lives vs livelihood equation has so far created more confusion than clarity. Knee-jerk reactions, prompted unabashedly by business interests have bordered on the incredulous. In a developing country such as Bangladesh the spanner in the works has been the short-term economic brunt that people haven't been able to take on the chin. The strong dependence on exports both in terms of foreign reserves and jobs cannot be ignored. Last year $3.0 billion worth of garments exports went up in smoke. This has largely been made up and opportunity knocks as buyers move away from India and Myanmar as sourcing venues. This may have protected the four million jobs generated by the industry. The worry lies elsewhere. Jobs in the informal economy, legal and illegal has gone for a loss. The estimated 2.5 million jobs lost, pushing these people into the poverty cycle is a hard nut to crack. Nor is it productive when school teachers have to sell vegetables to survive.
The massiveness of the informal economy is a wobbly bubble. On its own there are no realistic quantification of its size, except that it exists. Shop owners estimate their losses in the last eighteen months as being close to Tk 2.0 trillion. Restaurants and hotel owners have put theirs at Tk 900 billion. The transport sector figures are not known. And to think the government budget is a little over Tk 6.0 trillion. Even greater a headache is the unstable smaller bubbles that the bigger sectors produce. That the big bubble burst wasn't a surprise. The fragility of the smaller ones has been both underestimated and overlooked.
Outside of the social safety nets and largely uncomplaining, they were seen but unknown quantity. Whatever they earned went in to spending largely influenced by the glitzy advertising or bundles of 'offers'. There are pressure cookers, fridges and LPGs in small village homes. Few slums are without TV. For years there have been no sustained efforts to encourage them to save. Then again where would these savings be invested. Repeated pleas for policies to allow for wealth creation and savings thereof have been ignored. On the contrary, the government of the poor has found innovative and hidden means of immediate funding sources for the national budget through cutting into savings. Bank deposit interest barely covers inflation after tax.
Liquidity isn't an issue for private banks anymore. Deposits of government funds, diverted from the traditional state-run ones have left them flush. That served as a cushion against the unholy levels of debt that state-run banks have raked up through politically influenced and badly scrutinised loans. On the contrary there's so much liquidity that Bangladesh Bank is buying it off to prevent major inflation. Some private banks are also guilty. So much so that mergers and possible acquisitions are probably a matter of time. Promised bank reforms through formation of a commission hasn't materialised. Economists and former bankers hem and haw at any commission without teeth. Their expectations are real as are their frustrations. Outdated laws that prevent proper security against loans have been left untouched. Women, the best borrowers with timely payback records are still crying out for finances to fund small and tiny business not frequented by sprucely turned out bankers. Help-desks to assist them in preparing outdated forms of processes leave them further in the lurch far from being of help.
The government can help with subsistence of the poor, not the revival of the economy. Instead, the time has come to learn from the private sector, especially the multinationals on how they continued to be profitable. They too, have supporting sectors through which products are distributed nationwide. E-commerce is booming, suggesting that there's still spending going on. Distribution of these spendings could well spur the economy. Most banks are also making profits and their expertise may be just as much a learning experience. Practical and not theoretical inputs from economists, agriculturists and health specialists can add to a pool, outcomes of which can be facilitated rather than managed by the government.
mahmudrahman@gmail.com