Mir Abdul Alim

Bangladesh's economic and social framework is currently facing a deep crisis. The soaring prices of essential commodities, lack of employment opportunities, and global economic instability are pushing the lives of the country's lower- and middle-income populations toward severe hardship. According to a report in a national daily, 90% of people in the country are struggling financially to purchase essential goods. Workers complain that it is impossible to meet expenses with their current earnings. Effective measures to overcome this stagnation in living standards are now imperative.

The prices of staples like rice, sugar, oil, fish, meat, lentils, and onions are skyrocketing. According to government statistics, the inflation rate reached 9.47% in December 2024. However, private observers believe the actual rate is even higher. Currency devaluation, declining foreign currency reserves, and over-reliance on imports have further complicated this crisis.

Workers’ grievances are even deeper. A rickshaw puller, in a national daily report, said, “With the way rice and oil prices are rising, it’s impossible to cover expenses with my income.” Similarly, Ariful, a tea vendor, noted, “At the end of the day, the earnings are not enough to run the household.”

For the past few years, the global economy has faced successive challenges. The COVID-19 pandemic, the Russia-Ukraine war, the Middle East crisis, the effects of climate change, and inflation have collectively destabilized the global economy. Although various countries are trying to tackle the crisis through their own measures, overall positive news remains scarce.

The Russia-Ukraine war has disrupted global supply chains, increasing the prices of food grains and fuel. Import-dependent economies like Bangladesh are directly affected by these global crises.

According to Bangladesh Bank, foreign currency reserves stood at only $24.47 billion in 2023, a 45% drop compared to the previous year. In 2024, reserves began to decline further. However, as of December 2024, reserves increased significantly, reaching $26.09 billion in the last week of the month. According to the IMF’s BPM-6 standards, the net reserves amount to $21.33 billion, while the country’s usable reserves currently stand at $15 billion, sufficient for three months of imports. The key drivers behind this increase are a surge in remittances and loans and grants from donor organizations. During the first 28 days of December, remittances equivalent to $2.42 billion flowed in through formal channels, boosting reserves.

While the economic outlook for Bangladesh is not entirely grim, overcoming the crisis requires integrated action. Global leaders must restore balance in the global trade system and invest in sustainable economic development. Simultaneously, technological advancements should be utilized to create employment and focus on environmental protection.

To overcome the economic crisis, international cooperation, effective policies, and long-term planning are crucial. Otherwise, the current situation may deteriorate further.

The impact of global recession will be more pronounced in countries like Bangladesh. To address this situation, the development of the agricultural sector could be a primary solution. About 20% of the country’s land is still uncultivated and needs to be brought under cultivation. According to a report published by the Bangladesh Bureau of Statistics (BBS) in 2024, employment in agriculture has decreased by 4% compared to 10 years ago. Yet, there are numerous opportunities to create new entrepreneurs in this sector. Initiatives like poultry farming, fish farming, dairy production, and vegetable farming can rejuvenate the rural economy. Agricultural economists believe that increasing investment in proper preservation and processing of crops could create opportunities to export agricultural products and earn foreign currency.

The industrial sector is currently in dire straits, especially the ready-made garment industry. According to the Export Promotion Bureau (EPB), the growth rate of garment exports fell to 7% in 2024. Consequently, many small and medium-sized factories shut down. Rising production costs due to electricity and gas shortages have made it difficult for factories to remain competitive, resulting in job losses for workers. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported that around 30,000 garment workers lost their jobs in 2024.

According to government statistics, over 2 million new job seekers enter the workforce annually. However, it has not been possible to create enough job opportunities for them. In 2024, a government department received 1.2 million applications for only 400 positions, highlighting the extent of unemployment.

In areas like Badda, Gulistan, and Shyamoli in Dhaka, hundreds of daily laborers sit in search of work every day. Most of them return empty-handed.

What Needs to Be Done to Address Unemployment and Foster Economic Development?

1. Increase Agricultural Production: Bring uncultivated land under cultivation, provide soft loans to small farmers, and introduce advanced technology and irrigation systems.

2. Revitalize the Industrial Sector: Ensure uninterrupted supply of gas and electricity, increase investment in small and medium-sized enterprises, and explore new markets for the garment industry.

3. Create Employment: Provide skill development training in both public and private sectors, increase opportunities for overseas employment, and reduce reliance on remittances by ensuring domestic employment.

4. Control Prices: Ensure the supply of goods in the market through strict monitoring, reduce unnecessary imports, and emphasize domestic production.

5. Enhance Social Protection: Introduce subsidies and rationing systems for the poor, and expand the coverage of social safety nets.

Pathways Out of the Economic Crisis

The lower- and middle-income population of Bangladesh is currently enduring a severe crisis. To overcome this, effective initiatives in agriculture and industry are essential. Employment generation must ensure stable income for the people. Both the government and the private sector need to work collaboratively.

Economists believe that adopting and implementing the right policies can effectively tackle this crisis. Otherwise, the wheel of life for low-income people may eventually come to a complete halt. Regardless of how deep the crisis is, united efforts can help find a path to recovery.

The writer is a, Secretary General – Columnist Forum of Bangladesh