The International Monetary Fund (IMF) has approved a $732 million disbursement to Bangladesh to relieve some of its financial duress amid the COVID-19 pandemic.
The move greenlights the 60th such request for emergency financial assistance by member countries lurching to navigate the health crisis, and the South Asian nation will receive funds under the IMF”s Rapid Credit Facility and the Rapid Financing Instrument.
Bangladesh’s economy has been especially battered by the pandemic, IMF officials note, with “weaker domestic demand and a sharp decline in exports and remittances.” Its $30 billion clothing sector accounts for 80 percent of its export earnings and 16 percent of the country’s gross domestic product. Panicked brands and retailers have canceled more than $3 billion in production orders—the equivalent of more than 982 million garments—according to the Bangladesh Garment Manufacturers and Exporters Association, the largest domestic trade group of factory owners. The number could swell to $10 billion by the end of the fiscal year, leaving millions of already embattled garment workers struggling for survival. Thousands have taken to the streets to protest the imminent threat of starvation.
“The outbreak of COVID-19 is severely affecting the two main sources of Bangladesh’s external earnings, exports of ready-made garments and remittances,” Antoinette Sayeh, deputy managing director and acting chair of the IMF, said in a statement. “Together with the measures to contain the spread of the virus in the country, the outbreak is expected to result in a significant slowdown of economic growth and the emergence of fiscal and balance of payments needs.”
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The emergency financial assistance, Sayeh said, will help cover the “financing gap and support the authorities’ effort to contain the adverse impact of the outbreak and catalyze additional support from the international community.”
While labor-rights groups have questioned if garment factories are coming back online too quickly, Sayeh praised Bangladesh authorities for “responding quickly” to the COVID-19 outbreak with a “comprehensive set of measures aimed at containing the spread of the pandemic, providing immediate relief to the most vulnerable households and affected businesses, and preserving the country’s macroeconomic prospects.”
Health Minister Zahid Maleque said Monday that the government is planning to divide the country into three zones—red, yellow and green—depending on the density of coronavirus cases in a bid to curb the spread.
“We have decided to divide the whole country into three zones as COVID-19 cases are increasing in the country,” Maleque told The Daily Star.
Bangladesh, a nation of 161 million, has reported 49,534 confirmed cases of COVID-19 and 672 deaths to date. Forty people died from the disease Sunday, the country’s highest number of fatalities in a single day. Offices, businesses and some transportation services have reopened on “a limited scale,” however.