'Administrative reforms must to properly implement budget'

Akbar Ali Khan

Writer and thinker Akbar Ali Khan had been involved in the formulation of nine budgets. He was a cabinet secretary. He even wrote a book on budgets, after 14 years of research. He spoke on the different aspects of the new fiscal's budget in an interview with Prothom Alo.

Q :

So how is the new budget?

A budget is never entirely good or entirely bad. A budget is a document of compromise with various vested interest groups. A budget can never please everyone. The problem with this new budget is that not only are the interests of various vested groups to be upheld, but the entire country is in a crisis, the corona crisis. So, one of the main targets is to overcome this crisis. All other targets come after this. Basically this budget has made an effort to somehow ensure that public life is not devastated, that the crisis can be overcome. In that sense, the target of this budget seems correct to me.

Q :

Budget deficit is always a topic of discussion. In your book too you wrote that it is not a problem if the budget deficit is within 8 to 12 per cent. The finance minister kept the deficit in this budget at 6.1 per cent. Could this have been increased?

The general economic concept about budget deficit is that it can be high as long that deficit is used for development work. In other words, the investment made in infrastructure cannot really be called deficit. Secondly, the deficit calculated from foreign aid is a special arrangement of IMF. IMF feels that if any country becomes habituated to foreign aid, then they fall into difficulty if that aid is halted. That is why they consider foreign aid as deficit. In this light, Bangladesh can have a 6 per cent or even higher budget deficit. But the budget deficit of the present financial year is not just for investment. It is also to be for current expenditure. That is why one needs to be cautious about budget deficit.

Q :

The finance minister has termed this budget as business-friendly. But many people point out that the budget has nothing for the new poor, for those who had to leave the cities and go back to the villages due to coronavirus. What is your assessment?

Both sides are correct. The finance minister has given the big businesses a lot of opportunities. But this budget does not have adequate stimulus for those who have become poor anew, for those who have become poor and gone to the villages, for the middle class. Also, there is no clear idea about how to deliver whatever stimulus that there is, to them.

Q :

You have a book, 'Bangladesh Budget: Orthoniti O Rajniti' (Bangladesh Budget: Economics and Politics). In your view, what are the politics and economics of the new budget?

The politics of this budget mainly is the efforts to retrieve the country from the present crisis. But only politics has been given emphasis in this effort, the economic aspects have not been looked into properly. It is not enough just to spend. The government needs to be extremely cautious in its expenditure. The present budget has mention of many mega projects. These projects cannot be implemented now as they could have been before the outbreak of coronavirus. The costs of the projects have gone up too. These projects have various environment-related problems too. So rather than implementing these all in one go, it should be determined which should be taken up first and which later. But there is no sign of this in the budget.

Another serious problem is implementation. We cannot implement the budget entirely. The administration needs to be reformed in order to implement the budget. This reform can't be done overnight. This should have been done long ago, but it wasn't even started. It still hasn't started. That is why the allocations in the budget will not be used properly everywhere and there will be wastage of resources. This wastage will create problems in taking our economy ahead on the correct path in the future.

The third problem is, a lot has been imposed on the banking sector. As it is, Bangladesh's banking sector is beset with problems. The banking sector should have been strengthened. The budget that has been drawn up will make the banking sector even weaker and in future it will be difficult to restore discipline in the sector.

Q :

You have mentioned reforms. Which sectors do you think need reforms?

Actually, all sectors need reforms. Reforms are needed in education, health, public administration, all sectors. Over here our reforms have been digitalisation, that is, computers have been used. This can help in increasing the efficiency of our administration, but it is not enough. The government's authority needs to be decentralised for digitalisation. Our administration is a centralised administration. It takes long for a centralised administration to take decisions. This centralised administration is now becoming even more centralised. But the government is not paying attention to this.

Secondly, government officials need to be evaluated properly. They must be properly recruited and trained. We have failed to start any reforms in this regard too. So digitalisation will not take us very far because we need to take up many more measures. We need overall structural reforms. The government structure and various institutions needed to be built up well. That hasn't been done. And most of the government-owned corporations are making huge losses. The losses of this year have still not been calculated. These losses must be stopped because these losing concerns are discouraging investment in the private sector and are misusing public money.

Q :

You have written a lot about economic issues. You had been the head of a reforms committee too. What are the obstacles to reforms, actually?

The first obstacle to reforms is that the vested interest groups are benefitting from the areas where there is corruption in the government, where there is pilferage. These groups are always active in protecting their own interests. On the other hand, reforms will benefit the general people. The general people do not and cannot get together to fight for reforms. That is why the anti-reform groups gain an upper hand. These vested groups, in turn, lend patronage to certain political parties. They support the government and so remain in the good books of the government. That is why the government takes up no initiatives for reforms.

Q :

You have detailed research on post-budget discussions. The budget has been presented. How can the budget discussion be meaningful during these critical times?

The budget has been presented this time after much trimming and cutting. Not all papers and documents have been made available as yet. This time only one-fifth of the normal amount of documents has been prepared. That is why the budget discussion will be very limited this time. And the opposition in parliament is hardly functional. In these circumstances, it is not enough for the government just to listen to the deliberations of the parliamentarians. They should take into consideration the discussions outside of the parliament, the discussions in the newspapers, the statements of the civil society, the business community and so on. Rather than taking an inflexible stance, the government needs to work with an open mind. It must advance forward after observing the implementation of the budget in the Covid circumstances.

Q :

You complain that Bangladesh's budget speeches are not reader-friendly. How reader-friendly is the budget this time?

We all know that Bangladesh had made economic advancements. There was no need for a 10-page statement of what president of which country has said about this. If this was a real budget speech, then one third of the words used in the present speech would have sufficed. This has become a trend in our country. All the finance ministers present long-winded speeches. They do these in order to hide their deeds in the profusion of words. It would be better if they refrained from doing this.

Q :

In your book you said that there was no mention in the budget of defence sector expenditure or allocations, but this needs to be discussed. This budget too does not include defence sector allocations or expenditure.

Just some numbers are presented in the defence sector budget. Nothing is given in detail. The logic given behind this is that it will be a security threat if we make public what kind of military weapons we are procuring. There is some justification to this, but if there is absolute secrecy, there is also more wastage. It is possible to procure items at the international market rates, lower than what is actually being spent. Even if this matter cannot be discussed openly in the parliament session, it can be discussed confidentially in parliament. That will yield good results. But there is no discussion on these matters now.

The health sector is another important issue. The manner in which there is pilferage in this sector, calls for more discussion in parliament.

Q :

What are your views about whitening black money?

Under no circumstances should black money be allowed to be whitened. We have taken up a culture of whitening black money and this scope is on a steady increase. This is not leading to any decline in black money. The government needs to take a stern decision to end black money.

Q :

The budget has been proposed. What issues should be paid attention before it is passed?

We must keep in mind this is a provisional budget. The figures in this budget will depend on the real circumstances. So it is not possible now to give a final budget for the coming fiscal. That is why I want to say the government must keep an open mind, observe the situation and the implementation of the budget, and take speedy decisions accordingly.

* This interview appeared in the print and online editions of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir