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26 July, 2020 05:51:16 PM

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Having more rural entrepreneurs can ease Covid-19 crisis

Dhaka is the perfect instance of unsustainable urbanization. The inhabitants are experiencing a number of problems such as the lowest air quality, longer commuting time, lack of pure drinking water.
Tanvir Hossain
Having more rural entrepreneurs can ease Covid-19 crisis

Covid-19 has made considerable shock in the world economy. Although it has emerged as a crisis, it provides us a remarkable insight to learn numerous important issues of our economic system.

It helps to understand the weaknesses of recent economic development. Therefore, policymakers around the world are putting step forward to reshape the economy.

Especially when we are talking about an area that is economically sound, we normally look for an urban area. Almost everywhere in the world this is the reality, urbanized areas are more developed than rural areas. However, urbanization is the effect of economic development not the cause. People shift to the area which has higher economic prospects such as better earnings, health and education.

When almost everyone is urban centric, rural areas lags behind. Very few investments are made in rural parts which results very limited employment and income generating opportunities and the consequence is lower standard of living. Thus, the gap between rural and urban areas widens. Hence, more and more people leave the village and move to cities and the outcome is the vicious circle of urbanization. Moreover, if the number of inhabitants exceeds the capacity of an area emerges as improper urbanization that also yields a serious environmental cost.

Dhaka is the perfect instance of unsustainable urbanization. The inhabitants are experiencing a number of problems such as the lowest air quality, longer commuting time, lack of pure drinking water. On the other hand, cost of living in Dhaka is so expensive relative to income. Excess demand for housing has made the rents so high. Thus, inhabitants need to spend a greater share of income as rents and less money available for other expenses such as health and nutrition, education and so on. Even most of the people are residing in house with lack of water, sanitation and energy facilities, especially in slums. If they could be able to manage a standard earning in villages, they would not need to concentrate in capital.

If any unexpected shock hits the economy, a vast number of people living in cities with lower income cannot be able to maintain their livelihood. Therefore, we are observing now the tenants of Dhaka city are leaving as they are unable to afford expenses.

Besides, most of the expats are returning back from Middle-East as they lose jobs there. It is also expected that more will return in coming days as the government faces pressure from foreign countries to bring undocumented expats. Usually these expat labours are able to do hard work. A proper planning should have in place to make them employable in our country.

Since the people are moving back to the villages, it is a proper time to enable them involving in rural economic sector. We need to emphasize the effective utilization of available rural resources and the potential for them. An entrepreneur can start a small business or an agricultural farm in the local areas, comparatively with lower investment.

However, the concern is how these huge numbers of people can be engaged in productive economic activity. Firstly, we can make a diversified and export oriented agricultural sector. Not only focusing on traditional crops but also other fruits and vegetables need to be cultivated which can be exported to foreign countries after fulfilling local demand. That could be a direct way of generating employment.

Secondly, agricultural products processing industries such as food processing factories should be placed in rural areas so that farmer can have an easily deliver their cultivated products. It will reduce the transportation cost and save the products from being damaged. Usually, we witness every year a significant amount of agricultural products damage due to lack access to storage facilities. This will also ensure better price of agricultural commodities to farmers. These forward linkage product processing factories adds value to agricultural commodities and makes commercial brand of those products. Thus, it will facilitate to create a huge number of jobs.

Thirdly, we can utilize e-commerce in rural economic activity. Although e-commerce has gained popularity in urban areas during this crisis, the rural areas are still far behind. Especially, the young, educated entrepreneurs are participating in online platforms. These entrepreneurs can facilitate to bring locally produced goods under e-commerce.

Nevertheless, the supportive economic policy is essential for increasing the number of rural entrepreneurs. These entrepreneurs should have easy access to credits with lower interest rate. Bangladesh government has already announced 3000 crore TK and 5000 crore TK for rural SMEs and agricultural sector respectively. Transparent and speedy distribution of this stimulus package is essential.

Loan disbursing responsibility can be executed by specialized banks such as Bangladesh Karmasangsthan Bank, Bangladesh Krishi Bank and MFIs such as PKSF, BRAC since they are experienced in dealing with SMEs in rural areas. Besides, the administrative procedure should be made easier for starting and operating industries and businesses in rural areas. Additionally, training and workshop facilities have to expand for the new entrepreneurs and labours.

Therefore, it should be a priority to create entrepreneur friendly rural areas to generate employment for returned workers from cities and foreign countries which will aid to recover from the recent crisis and post pandemic economic challenges.

The writer is a postgraduate student of economics, Ghent University, Belgium

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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