Bangladesh economy is still reeling from the “lockdown” measures. Nobody knows when the situation will be normal. Yet, our policymakers have set a target of 8.2 percent economic growth for the next fiscal year
From fighting the dreaded Covid-19 virus to embark on the path to economic recovery from the pandemic fallout, China has taken the lead.
It started to respond to the pandemic in January in an all out way. Its forceful lockdown, strict quarantines and massive testing capacity swiftly brought the contagion under control within its borders.
As it started reopening economies some new cases were detected in Wuhan province, the first epicenter of coronavirus, last month. China responded immediately to fight it. It tested all 11 million people there in only two weeks by pouring massive resources to prevent a resurgence of the deadly virus infections. Its policymakers know it well that the reappearance of the virus will damage China's economic recovery efforts.
Many countries affected by the virus have followed the Chinese recipe to fight the virus and succeeded in containing the spread of the virus.
China's success in stemming the contagion helped most provinces to begin reopening for business in March. Its economy has started recovering fast from the pandemic fallout.
China's recovery strategy is unique.
This time around China has done something unprecedented in three decades by not setting a numerical target for economic growth this year.
Since 1990, China's Communist Party had always set a growth target to achieve as a way of signaling how well the country was doing.
But the pandemic has made everything uncertain. In such a situation, they think setting a growth target is meaningless. But that does not mean the world'S second largest economy has given up hope for recovery.
It has made significant stimulus efforts. It unveiled a $500 billion stimulus for the economy as part of a bid to create nine million jobs and absorb the fallout from the Covid-19 pandemic.
It has also taken various fiscal efforts such as tax cuts and rent reductions which are aimed at generating employment and helping the poor.
Beijing has vowed to work on what it calls its "six priorities": employment, basic livelihood, companies, food and energy security, stable supply chains and smooth operation of government, said a recent Financial Times report.
For example, saving jobs and small and medium-sized businesses would call for something similar to the US's Paycheck Protection Program. A more resilient supply chain suggests increased infrastructure spending, says the report.
The country's economy has not looked so bad since Chairman Mao Zedong died in 1976. Yet even amid the gloom of the coronavirus pandemic, there are already some signs of momentum returning, said experts.
"The economic recovery in China," where the coronavirus first emerged, is "going to look very impressive with a growth of 5%-6% quarter on quarter in April-June, following a contraction in the previous three months," said Michael Spencer, Deutsche Bank's chief economist and head of research for Asia Pacific.
"The domestic demand part of the Chinese economy has recovered well," he told CNBC.
The Chinese recipe shows if an economy wants to reopen it must tame the virus first. If you follow it or not, this has been proven right.
Bangladesh, however, is taking a different path.
We have moved to reopen the economy after ending the two-month long "lockdown" that has failed to flatten the virus curve.
During the last 10 days after ending the "lockdown" enforced half-heartedly in the form of general holidays, the deaths and infections are spiking. We could not ramp up testing to understand the real spread of the pandemic. The move to reopen the economy did not work well as the virus still remains uncontrolled.
The economy is still reeling from the "lockdown" measures. Nobody knows when the situation will be normal. Yet, our policymakers have set a target of 8.2 percent economic growth for the next fiscal year. It seems they have not taken into consideration the magnitude of the uncertainty in the coming days.
The finance minister is placing the new budget in the Parliament on Thursday with an optimistic expectation of quick recovery.
But, reports published so far on the proposed budget indicate that the new budget may not be an extraordinary one required for a quick recovery.
An extraordinary budget is the need of the time considering the unprecedented crisis that shuttered the country's economy, threw millions of people out of work and doubled the poverty rate.
Economists at home and abroad have unequivocally been urging countries to make extraordinary efforts to recover their economies from the pandemic fallout.
Initially, many countries made efforts to rescue their economies from the shutdown effect. Now, they are making efforts to recover the economies.
We will know on Thursday whether our finance minister focuses on rescue or recovery of our economy. We will know what his plans are to achieve the ambitious target of 8.2 percent economic growth in a world of uncertainty caused by the pandemic.
But one thing can be said with certainty, if his measures fail to stimulate the economy it may derail the recovery.