Economy trapped in corruption, unaccountability, inefficiency

The economy has been grappling with a lack of accountability, a shortage in skills, and institutionalised corruption.

It has led to an inefficiency trap, and the authorities have resorted to imposition of additional taxes to make it up. 

Moreover, infrastructures are being constructed in an unplanned way, while initiatives are being taken carelessly. There are two golden geese – dedicated entrepreneurs and economic workers – that are being forced to end up in death.

Experts presented the scenario while addressing a dialogue on the proposed budget for the fiscal year 2024-25 at a hotel in Dhaka on Wednesday, hosted by the Centre for Policy Dialogue (CPD). 

CPD executive director Fahmida Khatun presented a keynote speech  on the proposed national budget for the fiscal year 2024-25, while former caretaker government advisor and noted industrialist Syed Manzur Elahi moderated the programme. 

In his speech, the former advisor said there is a leakage in our expenses like that in our income. But around 90 per cent of prevailing economic woes would be resolved had good governance in place.   

According to the keynote speech, the proposed budget has a deficit of Tk 2.56 trillion, which is 4.6 per cent of the gross domestic product (GDP). The government has planned to borrow an amount of Tk 1.37 trillion to bridge the gap, but it is a disproportionate estimate.  

Addressing the dialogue, former planning minister MA Mannan said he had to facilitate approval of some projects in the executive committee of the national economic council (ECNEC) that he did not agree with. 

“We live on the surface, but invest underground. There are many projects with similar characteristics,” he noted. 

Regarding inflation, the former minister, who is now the president of the parliamentary standing committee on the planning ministry, said, “Inflation inflicts hardship on us. Our inflation is creeping. Its impact would have been unimaginable had it been faster.” 

He went on saying, “Inflation is a byproduct of growth. One cannot happen without the other. Living standards would come down if growth is not facilitated. So, the risk needs to be taken. Nations with large economies went through a similar phase.” 

The deputy opposition leader in the parliament, Anisul Islam Mahmud, believes that inflation can be brought down with proper handling of unscrupulous syndicates, rather than raising interest rates. 

“Interest rates have risen from 9 to 15 per cent. Some people believe that raising interest rates would drag down inflation, but it is not right. Loans in our country are mainly taken by traders, while the US loans are mainly sanctioned for purchasing cars and properties. So, the policy of high interest rate does not suit here,” he said. 

Blaming the authorities' inefficiency for the high power tariff, Anisul Islam Mahmud asked, “Why do consumers have to pay extra due to your inefficiency? Why will the public funds be wasted in the guise of capacity charge?” 

Rasheda K Chowdhury, a former caretaker government advisor, laid emphasis on investment in education, quoting Bangabandhu's 1974 statement that investment in education is the best. “This sector does not have adequate allocations. It is being said that the allocation has increased in figure, but the number of students has also surged.” 

She raised questions regarding the unchanged figure of  stipend for students, saying, “Inflation has been considered in all cases, then why will the amount of stipend remain the same?  Did we notice any investment in this sector to promote good policy, good governance, and citizens?” 

Hossain Zillur Rahman, another former caretaker government advisor, underscored the need for tact, honesty, and prudence in policy formulation during the transition from the group of least developed countries (LDC). He did not find these characteristics in the proposed budget. 

“The youth are disappointed with the country. Around 50 per cent of them see no future here,” he mentioned. 

The economist also noted that investments in education are trapped in inefficiency. The allocations for education are mostly spent on infrastructural development. Large infrastructures are being erected, though the quality of education sees no improvement. 

Expressing disappointment, he said the education ministry should be renamed as the ministry of education infrastructure development. 

Hossain Zillur Rahman observed that a promising Bangladesh is trapped under an iron triangle. Its three sides are an unaccountable economy, inefficiency and inactivity in strategic thinking, and institutionalised inefficiency and corruption.