“The issues of poverty, job market, SME sector and vaccination from COVID-19 have been underestimated in the budget, which would lead to limitations in formulating policies. If policymakers remain in their comfort zone during such a crisis, then they will not feel the need to create and implement appropriate policies” said SANEM in its post budget reaction, released on Saturday.
SANEM, opined that emphasis must not only be placed on financial recovery, but also on social recovery. Recovery of social issues such as education, health, social security, poverty, inequality, etc. needs to be addressed. In brief, the solutions presented seem to be on an ad hoc basis, rather than overall planning in regards to the COVID-19 crisis.
SANEM made the observations it a virtual press conference titled “SANEM’s Budget Reaction”.
The panel,attended the press conference, include Dr Selim Raihan, Professor, Department of Economics, University of Dhaka and Executive Director of SANEM, and Dr Sayema Haque Bidisha, Professor, Department of Economics, University of Dhaka and Research Director of SANEM.
In his speech, Dr Selim Raihan firstlystates that there is a disconnect between the title of the budget and its content. This disconnect is due to the improper and inappropriate assessment of the COVID-19 situation.
There has also not been enough data collection related to the pandemic situation from government organizations – this data is very important to understand the ground reality and is very useful for policymakers.
The consensus from all the research conducted is that poverty rate has increased;there has been a big crisis in the labour market – including urban to rural migration and increased pressure in the rural job market; MSMEs have suffered the most and have received the least amount of support during the pandemic - facing difficulties in receiving stimulus packages, they have relied on informal sources of finance.
Dr Raihan further states that budget implementation is a major issue. Although the budget has three stages, there is always little discussion about the revised and actual budgetslater in the year.
From SANEM’s research it has been found that for the past 10-12 years, the proportion of the proposed budget that is actual spending is around 75-78%. Moreover, the difference between implementation and spending is crucial, as increased spending does not imply that policies are being properly implemented.
Therefore, the size of the budget should be further increased, but in terms of priority. For example, public health expenditure, education and social protection are currently very small portions of GDP, which does not align with international SDG norms.
Dr Selim Raihan thanked the Finance Minister for prioritizing the priority sectors in the budget announcement, saying that the "roadmap" for how the budget will be implemented in these priority sectors is missing in the budget announcement.
