Hungry times

For most people, macroeconomic indicators are gobbledegook — what does the difference between 5% and 8% GDP growth mean?  For most people, economic indicators that matter are the ones that animate dinner table conversations — jobs and incomes, and the cost of living.  In the advanced economies with higher quality data, it is jobs numbers that resonate most — one might not understand what GDP stands for, but it is very clear what a rise in the unemployment rate means if one’s neighbour has been laid off.

In developing economies with large informal sectors, however, quality employment numbers are hard to come by in real time.  Data on the prices of essentials — proverbial chaal, daal, tel, noon — are much more readily available, as are wage rates of different types of workers.  Mix those essentials and voila, there is a plate of khichuri.  Using the data on prices and wages, we can calculate the number of plates of khichuri an average worker could afford a day.

Diagnosing a crisis

As the COVID-19 pandemic fanned out of China, emerging and developing countries around the world were hit by a pandemic of capital flight.  Since January, about $100 billion left these countries ­ — an unprecedented sum, three times in magnitude than was the case in the equivalent period in late 2008.  Stock prices stumbled, while the yield on emerging market bonds rose sharply.  Investors fled the emerging markets seeking the safe haven of US dollar denominated assets, without discriminating between the countries they were fleeing.

In more recent weeks, a sense of calm seems to have returned to the markets.  Capital outflows have subsided, and bond yields have stabilised.  Bangladesh was spared the worst in March-April.  As markets start differentiating risks again, the question arises: how vulnerable is Bangladesh to a currency crisis?

A debilitating currency crisis is to an economy what a cardiac arrest is to the human body.  Just as there is a sudden stop of the flow of blood in the latter, in the former there is a sudden stop in capital flow into an economy (or sudden withdrawal of capital).  In both cases, the sudden stop could lead to disastrous consequences.  Neither is precisely predictable — if enough of the symptoms are visible, then a sudden stop is likely being experienced.  But in both cases, we can look at the underlying fundamentals and judge how much at risk the patient is.

The good news is that with luck, Bangladesh may well avoid the worst should there be another outbreak of capital flight.  For example, a recent analysis by the Economist judged that Bangladesh is not at risk of an imminent currency crisis.  The bad news is that we failed to tackle a range of issues during the good times, leaving us more vulnerable than might be recognised.  There isn’t any cause for panic, but there is much to worry about.

Pakistani flood and our casual bigotry

Unless you’ve spent the past weeks in Mars, you’d have heard about the flood in Pakistan.  I’ve heard it described as worse than the Southeast Asian tsunami of 2004 in terms of the number of people affected, worse than Haiti’s earthquake in terms of intensity, and more crucial than Iraq in terms of geopolitical implications.

Make no mistake, this is bad.

And yet, when I look around in Bangladeshi discourse — mainstream media or blogs and facebook, government or NGOs, or even in private conversations — barring a few exceptions, I see nothing about this massive calamity.

Sidr Victims’ Compensation Fund

As most of the readers would know, Bangladesh was struck by a massive cyclone in mid-November.  The death toll stands in thousands, communities have been shattered, damage to crops, livestock and property is expected to run into billions of US dollars, and over 7 million Bangladeshis are suffering from the immediate aftermath of Sidr.  Most ominously, the country faces a grave shortage of food, and a real possibility of famine.  This post continues from some recent on what we can do.

Of frustration, hope, and resolve

Fellow blogger Asif said this the other day:

In the last 8 days of fund relief via TV channels in the UK, I couldn’t find a single not faith based organization that were getting relief via TV. These people from various faith based organizations, were out there on the field collecting money, volunteering etc that wins hearts and minds of common people. While, we folks, the so called liberals, are analyzing things ad nauseum.

My observations accord with his.  I don’t know about him, but I feel frustrated.  A lot.  

Sidr – what you can do

If you’re in Bangladesh, you may remit cash directly to the following account: 

Chief Adviser’s Relief and Welfare Fund, Current Account No. 33004093, Sonali Bank, Prime Minister’s Office Branch, Tejgaon, Dhaka, Bangladesh. SWIFT Code : BSONBDDH  

Ref: Chief Advisor’s Office Website (http://www.cao.gov.bd/rwfund07/rw_fund.html)

We shall overcome

A very powerful cyclone, named Sidr, hit Bangladesh Thursday night. 

I could write about how this compares in terms of death and destruction with previous storms that ravaged the country.  But I won’t.  The official death toll stands at 1,200 or so when I write this.  But almost certainly this will rise.  

The country’s utilities infrastructure has been severely disrupted.  I could collate the news of the damage as it comes through. But I’ll direct the reader to the excellent efforts of Rezwan and Zafa. 

I won’t even try to write about what I, and many others like me who are cut off from home, are feeling.  Instead, I’ll direct the reader to this Dhaka-bashi.

The cyclone is likely to have severely damaged the country’s autumn crop.  Beyond the immediate relief and rehabilitation, this means an aggravation of an already spiralling food price inflation.  But on that, perhaps some other time. 

And beyond that, perhaps this is a sign of the future.  Perhaps global warming means we have to brace for more of these happening at a greater frequency.  Perhaps. 

But I won’t despair.  I won’t despair because this is not the first time that this has happened to Bangladesh.  And, global warming or not, this won’t be the last.  We did overcome this, in 1991, and before that in 1970, and countless times before that.  And we shall overcome, this time, and the next one, and the one after that.

As the old leader said, ‘amader dabaye rakhte parba na’.