Reluctant to carry out economic reforms, frustration in the committee

Two reports on economic reforms sit idle since there are no strong initiatives from the government to implement the recommendations, thus, confusion arises whether the expectation on the structural reform to the economy would be fulfilled.

The interim government prepared two reports on the corruption and irregularities in the economy during the autocrat Awami League governments, as well as on determining future economic strategies. One of the two reports is the whitepaper formulated by the committee led by Debapriya Bhattacharya, Distinguished Fellow at Centre for Policy Dialogue (CPD) and Convener of the Citizen's Platform for SDGs, while another is the report of the taskforce led by former director general of Bangladesh Institute of Development Studies (BIDS) KAS Murshid.

The whitepaper was submitted to Chief Adviser Professor Muhammad Yunus on 1 December 2024 and the taskforce report on 30 January. Since no significant steps have yet been taken to implement the recommendations of the two reports, frustration grew among the committee members, with several members opining the government is not paying attention to economic reforms.

When asked, Debapriya Bhattacharya, head of the Committee on the preparation for White Paper on the State of Bangladesh Economy, told Prothom Alo, Chief Adviser Professor Muhammad Yunus owns the whitepaper but those who are relevant from his advisory council did not own it. Perhaps, there is a lack of capacity to carry out reforms as per the report, or the atmosphere that the interim government is passing through is not favourable for reforms.

There had been much discussion on corruption, irregularities, money laundering, and whimsical economic management that occurred during the 15-year rule of Awami League governments, which was overthrown by the July mass uprising on 5 August last year.

The interim government took office on 8 August. The new government formed various commissions, committees and taskforces aimed at carrying out reforms in different sectors. So far, 11 commissions have filed full reports so far and another submitted a summary.

A National Conesus Commission led by the chief adviser was formed to review and adopt the recommendations submitted by the six reform commissions. The Conesus Commission held a phase of discussion with the political parties. Discussion will start with the political parties soon to take the latter’s opinions. However, no definite action was seen on the whitepaper and the taskforce report.

A top official of the finance ministry told Prothom Alo, “The budget of the next fiscal year will reflect the recommendations of the whitepaper and the taskforce report and work has begun accordingly. However, all recommendations of the two reports cannot be implemented overnight, it has to be done in phases. This government will start several recommendations and the next governments will do the remaining ones.”

Led by Debapriya Bhattacharya, the committee to formulate the whitepaper was formed on 29 August. The 12-member committee included

Professor AK Enamul Haque, Dean of Faculty of Business and Economics, East West University, Ferdaus Ara Begum,Chief Executive Officer, Business Initiative Leading Development (BUILD), Imran Matin, Executive Director 0f BRAC Institute of Governance and Development (BIGD), BRAC University, Dr Kazi Iqbal, Senior Research Fellow of Bangladesh Institute of Development Studies (BIDS), Dr M Tamim, Professor of Bangladesh University of Engineering and Technology (BUET) and former Special Assistant to the Chief Advisor (2008), Dr Mohammad Abu Eusuf, Professor of Department of Development Studies, University of Dhaka, Professor Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD), Dr Selim Raihan, Professor of Department of Economics, University of Dhaka, and Executive Director, South Asian Network on Economic Modeling (SANEM), Dr Sharmind Neelormi, Professor, Department of Economics, Jahangirnagar University, Dr Zahid Hossain, former lead economist, World Bank and eminent columnist attended the meeting while Dr Tasneem Arefa Siddiqui, former professor, Department of Political Science, University of Dhaka, and founding chair, Refugee and Migratory Movements Research Unit (RMMRU).

The whitepaper committee submitted a 397-page report after three months highlighting various irregularities that include lootings, money laundering, irregularities in banking sectors and power sector corruption, as well as placing various recommendations for economic reforms.

According to the White Paper, a total of USD 234 billion or approximately Tk 28 trillion was siphoned off abroad during the tenures of the Awami League governments between 2009 and 2023.

It is estimated that between Tk 1.61 trillion and Tk 2.80 trillion have been used as bribes and extortion at various levels, solely derived from public expenditure on development projects.

Between Tk 770 billion and Tk 980 billion of these were simply bribes paid to government officials while between Tk 700 billion and Tk 1.40 trillion were extortions by politicians and their accomplices and the rest are spent on collusive payments. Most of them live aboard.

About USD 60 billion or Tk 7.20 trillion has been spent through the annual development programme (ADP) over the past 15 years, but USD 14 billion (23 per cent) or approximately Tk 1.61 trillion to USD 24 billion (40 per cent) or approximately Tk 2.80 trillion of it was wasted and looted in the name of development projects during this period.

According to the White Paper, trillions of takas were embezzled from the stock market through fraud, manipulation, placement shares, and deceit in the IPO process. Banks were taken over in collusion with the state agencies over the course of one and a half decades. The default loans of the banking sector amounted to Tk 6.75 trillion in the country, which is equivalent to the cost of constructing 14 metro rails or 24 Padma bridges.

The committee to formulate the whitepaper recommended structural reforms to remove these irregularities and corruption from the economy, and drew immediate focus on seven aspects. These are; (1) rolling out an economic stabilisation programme, (2) delineating a framework for the national budget for 2025-26 fiscal, (3) proposing a mid-term planning format, (4) identifying priority reform domains, (5) operationalising a robust transition strategy for LDC graduation, (6) accelerating substantive delivery of the SDGs and (7) hosting a forum for inclusive and sustainable development.

There is no visible progress on the seven recommendations, although several initiatives have been taken to control inflation and prevent the foreign currency reserve fall to bring economic stability.

The white paper committee held a discussion on the white paper in a hotel in the capital on 18 January. It was attended by adviser Sheikh Bashiruddin Ahmed. Sources say the committee wanted finance adviser Salehuddin Ahmed and Bangladesh Bank governor Ahsan H Mansur to attend the event. But they did not attend the programme.

Debapriya Bhattacharya explained the interim government’s activities over the economy of the country from three perspectives.

He said first the white paper has revealed the economic characteristics of the previous government. Second, the government has taken several initiatives to strengthen the economy, including controlling inflation rate. The interim government deserves half the marks for that. Third, the government has failed to achieve any notable progress in terms of infrastructural reform of the economy.

In his opinion, the discussion of the election has come to the fore now. The countdown of the interim government has started. The time to make the most of the opportunity to reform the nation is flying fast. He stressed on prioritising economic reform in the election manifesto of the political parties for the upcoming elections, he said.

The other members of the taskforce, named “Re-strategising the economy and mobilising resources for equitable and sustainable development” apart from KAS Murshid are - former World Bank official Akhtar Mahmood, Dhaka University’s economics department professor Selim Raihan, former head of the research department of Commonwealth secretariat Abdur Razzak, Yale University’s economics department professor Mushfiq Mobarak, BUET professor Shamsul Haque, Dhaka University’s economics department professor Rumana Huque, former president of MCCI Nasim Manzoor, BIDS research director Monzur Ahmed, CPD executive director of Fahmida Khatun, BDjobs chief executive officer AKM Fahim Mashroor and GED member Md. Kawser Ahmed.

The taskforce was formed on 11 September. On 30 January, they submitted their 526-page report to the chief adviser which contained several recommendations regarding a number of socioeconomic issues. One of the most notable recommendations was – introduction of a progressive revenue system which will allow collecting more revenue from the rich. The taskforce also asked to stress on increasing allocation for education and health and making relevant services more available and affordable. The taskforce also has specific proposals.

The advisory council discussed the report during a meeting held in February. A decision was taken that the council will scrutinise those recommendations and all ministries will implement those during the tenure of this government. Council also asked to submit a list of the recommendations that should be implemented in the next advisory council meeting. However, there has not been much progress in this regard since then.

For instance, there was a recommendation of dividing the Bangladesh Biman to two sections to privatise it. It has been learnt that there has been no discussion in the Civil Aviation Authority or in the Ministry of Tourism as yet. Apart from this, it has been recommended to increase exports by serving 1500 companies that export more than 1 million dollars a year. However, the ministry of commerce is yet to take any action regarding this.

SANEM (South Asian Network on Economic Modelling) executive director Selim Raihan was a member of both white paper committee and the taskforce. He expressed frustration for not taking any initiative to implement the recommendations made by these two bodies.

Speaking to Prothom Alo, Selim Raihan said, “A partisan government is never interested in reforms. People inside and outside the party obstruct in case the party takes any reform initiatives. However, the interim government has no such obstruction. Despite that, there has been no initiative so far.”

Asked why the government is not being able to implement the recommendations, Selim Raihan said, “This government does not have the support of the bureaucrats. The time for these reforms is flying fast. People now are talking more about the elections rather than the reform.”

The commerce adviser said while addressing a CPD event on 24 February that he did not get the taskforce report. Taskforce chief KAS Murshid was surprised to hear that. However, the report was published on the website of the planning ministry right after it was handed over to the chief adviser.

The taskforce has prepared the report under the planning ministry. However, the planning adviser was not present in the two-day conference that started 24 February.

Dhaka chamber former president Abul Kashem Khan told Prothom Alo, “The country adopts good policies. But they have never been implemented. We expect a lot from the interim government. So the government must implement the recommendations made by the white paper committee and the taskforce. The entire process would be easier if the businesspersons could be involved. The businesspersons will find some confidence in the government, if it can implement at least two to four of these recommendations.”

This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Hasanul Banna and Ashis Basu