Political uncertainty causes economic slowdown: Planning adviser

Planning adviser Wahiduddin Mahmud said that the country’s economy is experiencing a slowdown due to political uncertainty.

“Desired investment is not taking place. If investment had occurred, employment would have been created. However, remittance inflows are higher than before,” he said.

He made these remarks while speaking to journalists after the meeting of the National Economic Council (NEC) on Monday.

The meeting was held at the NEC Conference Centre of the Planning Ministry and was chaired by chief adviser professor Muhammad Yunus.

A revised Annual Development Programme (ADP) worth Tk 2 trillion (200,000 crore) was approved at the meeting.

Wahiduddin Mahmud further said that the ADP was not reduced because of the economic slowdown.

Explaining why the pace of ADP implementation has been slow this time, he said many former project directors could not be traced due to corruption. Appointing new project directors took time. In addition, revising many projects also took time. New tendering rules have been introduced. For these reasons, ADP implementation is lower this year compared to other years.

He also shared some decisions taken at the NEC meeting. These include forming a pool of project directors; allowing the planning minister or adviser to approve projects of autonomous institutions costing up to Tk 500 million (50 crore), while projects costing more than Tk 500 million (50 crore) will have to be sent to ECNEC for approval.

The planning adviser said there is a shortage of projects for the ADP. He noted that during political governments, there used to be a rush of projects, which has not happened during the interim government’s tenure. Projects are being taken after proper scrutiny. Many ministries are not sending project proposals.

Wahiduddin Mahmud further said, “There is no example of any country progressing by taking foreign loans in sectors such as education and health. Previously, loans from development partners were accepted whenever offered, without examining whether they aligned with our development strategy.”

The next government will take the final decision on how funds will be spent and how projects such as the Payra Port and the metro rail will be implemented, he added.

Speaking about the Bus Rapid Transit (BRT) project from the Dhaka airport to Gazipur, the planning adviser said multiple options are being explored regarding what should be done with the project.

He added that demolishing the project’s infrastructure alone would cost Tk 20 billion.

Nearly Tk 300 billion (30,000 crore) has been cut from the Annual Development Programme (ADP) of the current fiscal year. As in previous years, this reduction has been made due to slow project implementation.

The revised ADP was approved at the NEC meeting on Monday. The size of the revised ADP for the current fiscal year now stands at Tk 2 trillion (200,000 crore). Originally, an ADP of Tk 2.3 trillion (230,000 crore) had been adopted for the fiscal year, meaning a reduction of Tk 300 billion (30,000 crore).

The total ADP size stands at Tk 2.09 trillion (208,953 crore), including development projects of autonomous institutions.

Of the funds in the original ADP for the current fiscal year, Tk 1.44 trillion (144,000 crore) was to be financed from domestic sources. This has been reduced to Tk 1.28 trillion (128,000 crore).

Project assistance in the original ADP was at Tk 860 billion (86,000 crore), which has been reduced to Tk 720 billion (72,000 crore). The revised ADP includes 1,330 projects.

More than Tk 120 billon (12,000 crore) has been cut from the allocations of the top 10 priority and major projects combined. Among these top 10 projects, there is no reduction in allocation for the Rooppur Nuclear Power Plant, while the allocation for the Dhaka–Ashulia Elevated Expressway has been increased. Allocations for the remaining eight projects have been reduced.

Major projects facing reduced allocations include Metro Rail (MRT-6); Metro Rail (MRT-1); MRT-5 (North); construction of a four-lane road from Hatikumrul to Rangpur in Sirajganj; construction of the Dhaka–Sylhet four-lane highway; Matarbari Port development; expansion of Hazrat Shahjalal International Airport; and the BRT project from the airport to Gazipur.