Upcoming Industrial Policy in the Post COVID Bangladesh

Abstract

The COVID-19 pandemic had a considerable adverse impact on the global, regional and national economy. For the first time in several decades, Bangladesh's economy grew by less than 7.5 percent (e.g., 5.2 percent) in terms of GDP during FY 2019-20.

Under such dire circumstances, the Government of Bangladesh came up with a "Trillion Taka Package" to keep the economy stable and to compensate for the losses faced by the private sector. The stimulus package would supposedly keep the entrepreneurs competitive in the local and international markets as well.

To be specific, low-cost credit facilities were offered to export-oriented garments. Other recipients of the stimulus package included the agricultural sector, cottage, micro, small and medium enterprise (CMSME), low-income groups as well as vulnerable professionals within the limited income group.

The first round of the stimulus packages was focused on supplying low-cost credit facilities to make up for the deficit of working capital.

However, most health experts are warning about a potential second wave of the pandemic with no mass-produced vaccine in sight for at least the next few months. Given that, the government may have to think of offering a second round of stimulus packages.

The second round of stimulus packages should focus on working capital as well as on offering credit for young entrepreneurs, jobless youths, and professionals who had been laid off during the pandemic.

The current National Industrial Policy of Bangladesh was enacted in 2016. Hopefully, the next version of the policy will be introduced in 2021.

The nation experienced few limitations of the National Industrial Policy 2016 including definitional, classification wise as well as focus relevant shortfalls. Then the COVID-19 crisis gave rise to some new issues and made some aspects of the policy obsolete. Therefore, the next industrial policy should come up with some new dimensions.

Keywords: Industrial Policy; Post COVID Economy; Stimulus Package

JEL Classification: E61; F13