With the government’s implementation of some Tk 1,28,000 crore of stimulus packages to save businesses from Covid-19-induced losses, complaints began to surface over bribes demanded by employees banks and various public bodies responsible for disbursing funds.
A latest survey by the South Asian Economic Modeling Network (Sanem) of 501 companies in the manufacturing and service sectors recorded an increase in complaints of corruption related to the use of low-cost stimulus loans.
Sanem said his April 2021 study found that 6% of companies that had obtained stimulus fund loans complained of being asked to pay bribes. The latest study conducted in July by the same organization showed that 12% of companies that were able to get stimulus support said they had been asked for bribes.
Allegations of bribes even came from companies that failed to take advantage of the stimulus.
Some seven percent of companies surveyed in April 2021 said the bribes were linked to the process of obtaining funds from the stimulus packages. The allegation more than quadrupled to 29% in Sanem’s latest investigation.
As there is a culture of corruption in society, it appears that some are trying to take unfair advantage of the huge demand for loans from the stimulus funds, said Sanem’s executive director Selim Raihan.
In its latest survey released yesterday, Sanem said 79% of companies surveyed had not yet received any funds from the stimulus packages. Entrepreneurs who used loans continued to complain about lengthy procedures and difficulties in banking services.
There is a lack of monitoring and transparency in the process of disbursing stimulus packages, he said while sharing the results of the survey on “Covid-19 and business confidence in Bangladesh” during a press conference.
Sanem said the effective implementation of the stimulus packages was essential.
“An assessment is urgently needed on the stimulus packages implemented so far. Stimulus plans need to be rethought and expanded amid the current wave of Covid-19, ”Raihan said.
Sanem said companies were more confident about the recovery during the current period from July to September 2021 than they felt in the previous quarter due to the loosening of the nationwide lockdown.
He reported that the Business Confidence Index (ICC), measured on a scale of 0 to 100, improved to 49.74 during the July-September period of this year, from 41.39 during the July-September period of this year. from April to June.
“The improvement is visible for all the sub-components. This improvement in business confidence gives hope for the revival of the private sector, ”said Raihan.
Sanem said confidence levels regarding the recovery were higher in the food, catering, clothing, textiles, leather and pharmaceuticals sectors than in the transportation, retail and retail sectors. light engineering, wholesale, retail, real estate and ICT.
This was the fifth round of the survey, conducted by the research organization since July 2020 to monitor the state of the economy and business sentiment.
Sanem said the fourth round of the investigation in April this year revealed a deterioration in business confidence followed by the second wave of Covid-19.
“This series of surveys provides information on the pulse of the economy as the economy goes through the second wave of the pandemic,” he said.
Despite improvements from the previous quarter, overall business confidence is still lower than in the July-September 2020 period, when the BCI was 51.06, indicating that the process of economic recovery was slow .
“The recovery process has been disrupted and there is still uncertainty,” Raihan said.
Sanem said 64% of those polled rated the economic recovery weak while 27% viewed it as moderate, and only 9% felt the economy was on the path to a strong recovery.
Remittances, the export of goods and services, bank credit to the private sector, and immunization programs, among others, are the main factors contributing to the overall economic recovery, the research organization said.
Sanem said that in the past 15 months there have been visible recoveries in business activities. However, activity deteriorated during the April-June 2021 quarter compared to that of the January-March 2021 quarter.
“It is alarming,” said Sanem, adding that the situation was worse for micro, small and medium enterprises, non-exporters and companies in the service sector alongside those located outside Dhaka.
“This shows that businesses have pulled back again and it may take longer to get back to the pre-pandemic situation,” the organization said.
The research organization found that 67 percent of companies operated by spending their savings because they had not received stimulus funds, while 20 percent had laid off employees to survive.
Some of the companies have cut wages and salaries for their employees to keep their businesses afloat, Raihan said.
Regarding vaccination, the survey found that 60 percent of those surveyed had received the vaccine.
It is a concern for the economy that the remaining 40 percent have yet to be vaccinated, Raihan said.
About 50 percent of micro-business owners surveyed had been vaccinated, he said.
The survey found that only 25.5 percent of employees at the companies surveyed had been vaccinated.
Some 75 percent of employees were yet to benefit from the immunization program, which is also another major concern for the recovery of business and the economy.
Most vaccinations have taken place among Dhaka-based business owners, and export-oriented business owners account for the highest percentage of people vaccinated, according to the survey.
Random, unplanned and ineffective lockdowns are rather painful for the country. On the one hand, businesses must remain closed while on the other hand, foreclosure does not have effective results.
Thus, area-specific closures are needed in the future through the formulation of protocols, Raihan recommended.