Global meltdown
Photo: Samsul Said / Driknews
The world's financial system is very complicated and is interlinked with a large number of economic and non-economic variables, which tend to affect the global economy from time to time. The financial meltdown of 2008 was the worst of its kind since the Great Depression in the 1930's. It became prominently visible in the last quarter of the year 2008. The US sub-prime mortgage market collapse and the downturn of the housing boom in other industrially developed economies have had a ripple effect around the world. The gravity of the problems has been so severe that some of the world's biggest financial institutions have collapsed and subsequently gone for restructuring. The governments of the rich countries have come out with extensive bail-out policies and rescue packages, pouring billions of dollars into the banking system. Now, the question is- how much isolated we are, from this meltdown. Our policymakers might already have identified the various aspects of this crisis along with its likely impact on us. But the most important question is- how shall will address those forces which will have negative impact on our economy? First of all, we should focus on those sectors, which are relatively more sensitive to the global economic activities. Remittance is one of them along with export, import and foreign aid. Globally, jobs have been cut significantly by the industrialized nations. As a result, our manpower export is declining which has been magnified due to unscrupulous middlemen problem. Foreign aid may also be shrunken, as the donor countries are busy with their own economy and stimuli packages whereas it is easier to cut foreign aid budget since we are not their voters. From the media, we are hearing the news of employment decline and retrenchment of migrant workers across the globe. This will continue until the crisis takes a new look. FBCCI has already sought a Tk 6,000 crore bailout package to deal with the situation. The impact of global meltdown is perhaps much greater than the one, perceived earlier. It is like a shockwave, which is yet to be realized in most of the developing countries around the world. The new budget is going to be announced very soon. So, we expect our policy makers will take necessary steps to address these issues in line with our economy.
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