Bangabandhu Sheikh Mujibur Rahman Science and

Technology University

Assignment On
Impact of Covid-19 on International Business
Course Title: International Business
Course Code:

Submitted To:
Ujjal Mondal
Lecturer
Department of Accounting and Information Systems

Submitted By:
Bushra Chowdhury
ID No: 20180099039
EMBA 7TH Batch

Date of Submission: 30/09/2020

 Impact of Covid-19 on International Business

Introduction
Novel corona virus first identified in Wuhan, China, has spread to almost every country and region in the

world. Economists and businessmen believe that the corona situation will cause great damage to the

countries economy. According to them, the effect of corona virus have begun to have a negative impact

on about one lakh crore less than the target of revenue collection in this financial year.[ CITATION

Dav20 \l 1033 ]

Production in the transport, travel, tourism and hotel restaurants, clothing, fashion, export products, rod-

cement and steel sectors, which were most affected by the epidemic, has declined by 30% - 35%.

[ CITATION Els20 \l 1033 ]

Ecomists say the corona virus will cause financial losses of more than 10 percent of their GDP in many

parts of the world. Even if we have half of it, there will be more than 1 lakh crore rupees financial loss.

The amount is nearly 2.52 percent of the country’s GDP. The government could take both fiscal and

monetary measures to combat the novel coronavirus. [ CITATION Raa20 \l 1033 ]

Corona’s impact on export earning, along with remittances, one of the mainstays of our economy, will

hurt many other sectors. Expatriate income will also decrease a lot. Our workers, working in different

countries will lose their jobs due to reduced wages. As a result, if they return to the country, there will be

extensive pressure on the economy.[ CITATION Moh20 \l 1033 ] .Besides, factory inside the country may

be closed, workers may be laid off, and recruitment may be stopped. The macro-economy will face big

challenges in all aspects.[ CITATION Ami20 \l 1033 ]

Economic growth may slow down

Various organizations are warning that the global economy is now facing a major catastrophe due to the

widespread of corona virus. This effect will be most severe in populous countries like Bangladesh.
According to a report by the World Bank, Bangladesh’s economic growth could fall from 8% to 2% or

3% in the event of the coronavirus. [ CITATION Dha20 \l 1033 ]

We know that the three major sectors of Bangladesh’s economy are agriculture, industry and services.

Each sector has several sub-sectors. The main sub-sectors of agriculture are grain production, animal

resources and fisheries resources. Although production in this sub-sectors has not declined in the short

run, domestic and foreign economies have begun to have a downward effect on the prices of

manufactured goods in these sub-sectors. As a result, the economy is losing around TK 200 crore every

day.

Job layoffs have started

According to the International Labor Organization (ILO), the economic crisis caused by the new corona

virus, about two and a half crore of people may lose their jobs. According to the ILO, at least 6 million

people could lose their jobs if the effect of the new coronavirus are minimal. And if the level is too high,

then the number of unemployed people will be 2 crore 47 lakh. It is worth mentioning here that during the

global financial crisis of 2008-09, 22 million people were unemployed.[ CITATION Saj20 \l 1033 ]

However, the ILO added that the potential unemployment rate could be much lower if concerted action

was taken around the world, such as during the global recession of 2008.[ CITATION Bhu20 \l 1033 ]

At the moment, about one-third of the world’s population, or about 2.3 billion people, are sitting at home

in a kind of lazy time. There is no precedent in the history of human civilization for so many people being

imprisoned in their homes at the same time, one after the other, for so long.[ CITATION Ere20 \l 1033 ]

Foreign direct investment has declined

Economic crisis includes, besides loss of domestic productivity and employment, loss of foreign income

(for example, income in the ready-made garments sector and international remittances). Foreign direct

investments (FDI) have declined drastically worldwide, which has also negatively impacted Bangladesh.
The epidemic will have a major impact on foreign investment in Bangladesh. According to the updated

report of Bangladesh Bank, in the 11 months of the fiscal year 2019-20, net FDI in various sectors came

to 197 crore 50 lakh dollars. At the same time last year, 242 crore 80 million dollars came. As a result, net

FDI has decreased by 19% in 11 months.[ CITATION Sat20 \l 1033 ]

Incidentally, China’s influence in Bangladesh’s economy is now the greatest. Since 2016, the country has

increased investment in various sectors of Bangladesh. As a result, China is currently the largest investor

in Bangladesh.

The speed of remittance flow may decrease

In countries where the corona virus is infected, economic activity has already declined. Bangladeshi

workers or businessmen living there will not be able to send money to their families in the country if they

do not earn the required income. So naturally remittances will continue to decrease. This will have an

effect on the foreign exchange reserves. The World Bank says remittances to South Asian countries can

be reduced up to 22%. This is because many people in the west will lose their jobs and wages will go

down.[ CITATION Muh20 \l 1033 ]

There is drought in import & export

The import and export-oriented companies are also at risk. The foreign remittance will come down and

thus it will hit the foreign reserves of the country.

According to the sources, the outbreak of the coronavirus in mid-January caused a stalemate in China,

one of the world’s largest economies. As a result, not only China, but the world’s export and import trade

came to a standstill. It also has a detrimental effect on the economy of Bangladesh.

China is one of the trading partner partners of Bangladesh. About 35% of Bangladesh’s total imports

come from China every year. Almost all the raw materials used in the garment industry of Bangladesh are

imported from China. Apart from this, hundreds of items including clothes, ginger, garlic, various food
items, machinery, spare parts, toys, mobiles, electrical items are imported from China. [ CITATION

Beg20 \l 1033 ]

On the other hand, the products that Bangladesh exports to China are: leather, jute and jute products, tea,

readymade garments and fish products. Meanwhile, the largest export sector of Bangladesh is crab and

kunchia business. About 90% of crab and kunchia exports go to China[ CITATION Taf20 \l 1033 ]. But as a

result of corona virus, China has stopped importing crabs and kunchia from Bangladesh. So the price of

these has come down. As a result, Bangladesh is counting a loss of TK 4 crore every day. Due to the

corona virus, Bangladesh’s exports decreased by about 61 crore US dollars in March, which is 5 thousand

crore rupees in local currency. According to the Export Promotion Bureau (EPB), Bangladesh’s exports

fell by 17.28% in March compared to the same period of the previous fiscal. 85% of Bangladesh’s exports

come from garments products. Due to the corona’s push, the export order of this sector has already been

canceled and suspended, about 320 crore dollars or about 26 thousand crore TK. Traders lost in the

overall situation. They fear that if the coronavirus crisis does not end suddenly, the country’s import-

export sector may have to pay higher prices. [ CITATION Shi20 \l 1033 ].

Conclusion
The result of the change in the pace of the world economy due to global recession, war, epidemic etc. also

affects Bangladesh. Sometimes there are negative effects on imports, exports, trade and investment.

The coronavirus will teach us many new things that the world may never have expected. So maybe some

people think that Covid-19 epidemic is the last nail in the coffin of globalization.

The worthy Prime Minister of our country Sheikh Hasina has already taken various necessary steps to

address the economic crisis, starting from the incentive package of TK 92000 crore. Under the leadership

of Prime Minister Sheikh Hasina, the worthy daughter of Father of the Nation Bangabandhu Sheikh

Mujibur Rahman, Bangladesh will be to cope with the next economic disaster.
The government should act promptly to allocate further resources to healthcare infrastructure
development to tackle this pandemic. Till now, there is no vaccination for this virus. Thus
isolation and lockdown are the only means to stop the spread of this deadly virus.

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