In its election manifesto, the BNP presented a range of proposals and plans on the economy and economic reforms. These included specific targets for GDP (gross domestic product) growth, the tax-to-GDP ratio, increased investment, social safety net programmes, a family card scheme, loan waivers for farmers, and investment in small and medium enterprises.
Soon after assuming power, the BNP government took initiatives to implement these plans and began work swiftly. Notably, one of its key promised programmes—the “family card”—has already begun to be distributed. This suggests that the government had prior preparation in this regard.
It must be remembered that in programmes like the family card, there should be no corruption or nepotism in selecting beneficiaries. These initiatives will require substantial funding, and it remains unclear where that will come from. If the government finances such programmes through bank borrowing, it could fuel inflation and crowd out private sector credit.
Strong reform measures in the economic sector are not yet visible. There can be no delay in this regard. In particular, an immediate decision is needed on reforming the National Board of Revenue (NBR).
The global situation has newly emerged as a major challenge for the government. In particular, instability in the international oil market due to conflict in the Middle East has forced Bangladesh to import fuel at higher prices, creating additional pressure on the economy.
On the one hand, the government is trying to control inflation; on the other, higher fuel import costs are increasing public expenditure and putting pressure on foreign exchange reserves. Bangladesh’s reserves are not at a level where such additional costs can be absorbed smoothly. Therefore, energy conservation, limited use, and expenditure control have become crucial. Reducing energy consumption would lower import costs and ease fiscal pressure.
The government has also taken another important step: delaying Bangladesh’s graduation from the Least Developed Country (LDC) category. It has formally applied to the United Nations in this regard. Experts have long argued that the country was not sufficiently prepared for LDC graduation. The current government has taken a relatively swift decision to move this process forward, which is a notable step.
Overall, the government has taken office at a time when the economy was already under pressure. On top of that, global geopolitical instability has made the situation more complex. In this context, the government must both implement its electoral commitments and manage newly emerging economic challenges.
In my view, the government needs to proceed with a two-pronged strategy—maintaining “fire-fighting” measures to address immediate crises, while also implementing medium- and long-term economic reforms, policy planning, and sustainable development strategies.
*Fahmida Khatun is Executive Director at the Centre for Policy Dialogue (CPD)
**The views expressed are the author’s own.