Coronavirus Could Wipe Out $3 Billion From Bangladesh Economy

The financial fallout from the ongoing coronavirus epidemic could potentially shrink Bangladesh's gross domestic product by as much as 1.1% -- or $3.02 billion – in a worst-case scenario, said the Asian Development Bank.

In tandem, Bangladesh would see almost 895,000 job cuts.

China, the source of the virus, is Bangladesh’s biggest trading partner and largest source of raw materials. China also accounted for more than 20% of Bangladesh's imports of $56 billion in fiscal 2018-19.

In addition, Bangladesh also receives about 500,000 to 600,000 tourists every year, with a majority coming from China.

Bangladesh’s finance ministry said: "there is no doubt that there will be at least short-term impact [from the virus]. And if the outbreak persists for a long time, this will have [a] far-reaching impact not only on Bangladesh but also on the global economy."

Bangladesh’s Commerce Minister Tipu Munshi said he worried exports will plunge if the virus becomes worse in countries where its products are sold.

“Our [imports] from China [are] being hindered, but there is [also] an apprehension [that] if the economic activities of the countries, who buy our products, become slow due to the widespread outbreak of coronavirus, Bangladesh’s sales will [plunge],” he said on Sunday. “It is an apprehension, but the situation is not such that buyers [have yet] decreased their orders from Bangladesh.”

Munshi further cautioned it is still too early to properly assess what damage the virus will have on the economy and how the government may address such problems.

“But it is good news that the rate of coronavirus infection has started decreasing in China and [Chinese] workers have started [working] in factories. Hopefully the situation will improve within a short time,” he added.

Bangladesh officials are also fretting over the ramifications of the virus’ spread in western Europe.

“It’s a matter of concern for Bangladesh as 63% of [the] country’s total export earnings come from European countries,” said Selim Raihan, executive director of South Asian Network on Economic Modeling, a non-profit research organization based in Dhaka.

Selim said that Bangladesh’s export earnings fell by 4.8% in the first eight months of the current fiscal year -- to $26.24 billion from $27.56 billion in the same period of the prior fiscal year -- and that such income could decrease more in the coming months due to the outbreak.

However, some in Bangladesh think the virus outbreak may force the country to further diversify its export portfolio – which would ultimately benefit its economy. As a result, Bangladesh should seek to trade more with the U.S.

Minister of Industries Nurul Majid Mahmud Humayun noted that Bangladesh is currently only the 52nd largest trade partner of U.S., and that bilateral trade between the two countries amounted to $9 billion in the last fiscal year. That suggests there is great scope and motivation to increase that trade volume.

However, U.S. is the number one source of foreign investment in Bangladesh, he added.

Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh, said Dhaka needs to identify products it can sell to compete in global markets.

"Countries around the world have got the message that sourcing products from a single country [like China] is risky. That realization can benefit Bangladesh if it takes proper preparation," he said.

Bangladesh is currently the third largest exporter of garments to the U.S. (a market valued at $6 billion), behind only Vietnam ($13 billion) and China ($24 billion).

Meanwhile, Bangladesh has confirmed its first three cases of coronavirus as of Sunday.

The country’s Institute of Epidemiology Disease Control and Research, or IEDCR, also said three other people, who were in contact with the infected cases, have been quarantined.

IEDCR Director Dr. Meerjady Sabrina Flora said that two of the three infected people recently returned recently from Italy, where the virus has spread significantly.

“The trio are now undergoing treatment at a hospital, and for security reasons, we are not disclosing their identities and addresses at the moment. But they are in stable condition now,” Meerjady stated. “It is not the time to say that the virus will spread across the country, and so, there is no need to shut down schools and colleges at the moment.”

Bangladesh has requested that citizens and others arriving from China, Italy, South Korea, Singapore, Iran and Thailand, place themselves in self-quarantine for 14 days.

“Bangladeshis coming from these six countries have been urged to remain in self-isolation at their respective homes if they have no symptom of fever,” said Mohammad Shahriar Sazzad, health officer at Hazrat Shahjalal International Airport in Dhaka. “But if anyone is found to have 100 degrees Fahrenheit [temperature] during [a] health check-up at [the] airport, he or she will be kept at the quarantine center at the Kuwait Maitree Hospital.”

Since January 21, 511,660 incoming passengers have been tested for the virus at land, sea, and airports across Bangladesh.

Fears of the spreading virus has also led to the cancellation of a visit to Bangladesh by Indian Prime Minister Narendra Modi.

Modi was to have attended a ceremony on March 17 celebrating the 100^th birthday of Sheikh Mujibur Rahman, the founder of Bangladesh.

Modi’s anticipated arrival had sparked waves of protest in Bangladesh.