Executive Director, Centre for Policy Dialogue (CPD) Dr Fahmida Khatun on Sunday provided an idea regarding the current picture of Bangladesh’s economy by stressing on the challenges at first. She divided the obstacles that are currently being faced by the country’s economy into two types- short term or immediate term problems and medium or structural problems. Dr Fahmida particularly mentioned the high inflation rate and low rate of foreign exchanges. Bangladesh Institute of Peace and Security Studies (BIPSS) organized the policy circle titled “Bangladesh: The Economy Under Stress” in Dhaka. The discussion focused on examining the present condition of Bangladesh’s economy and other associated factors. Assistant Professor, Department of Economics, East West University Parvez Karim Abbasi also spoke at the event. Major General ANM Muniruzzaman (Retd), President of BIPSS, moderated the event. Foreign exchange reserve is declining in the country. In a question from the moderator if the declining foreign reserve might have an impact on the food security, Dr Fahmida said, saying that a decline in foreign exchange reserve will not only affect the food security but it will also effect the sustainability of the energy security. Biman Dreamliner returns to Dhaka due to cockpit windshield crack She pointed out that due to the Russia-Ukraine war, the supply chain has been disrupted globally and the condition of Bangladesh’s economy is no exception as it is integrated with global economy. "Bangladesh has experienced and is still experiencing high inflation,” she said. Dr Fahmida also highlighted that Bangladesh’s reliance on imports is exacerbating the current economic challenges. She mentioned that in the last year the country has witnessed very little FDI which is not sufficient. She cited that according to a research study conducted by CPD, 67% people surveyed in the private sector felt that corruption is the number one hindrance to doing good business in Bangladesh. She even conveyed a sense of concern as both exports and flow of remittance in the country have been decreasing. Again, she voiced apprehension about how the dominance of businessmen is being prevalent in the politics of the country and how good politics has ended overtime due to this. Parvez Karim Abbasi focused on the issue of rising income inequality among the citizens of Bangladesh. He brought up the point that the poverty rate affects 1 out of every 7 individuals of the country. This clearly shows a great disparity in terms of income level and wealth concentration. Gas supply to improve in Dhaka, adjacent areas in a day or two : Nasrul He also mentioned that the rising level of unemployment among youth is constraining the possibilities of upgrading the current economic condition of the country as substantial portion of the labor force of Bangladesh is made up of youth. “Roughly 36% of our labor force comprises people between 18 to 30 years of age”, he said. Parvez also underscored the significance of various other factors such as rising public debt, non-performing loans, systematic weaknesses in the banking sector etc. which are contributing to the decline of economic growth of the country. In his opinion, focus should be on the RMG sector and increasing the flow of remittance as these two important sectors are in threatening condition. The interactive session covered some critical assumptions and exchange of conversations among the honorable guests and the panelists including redefining poverty, ways to solve the economic stress, inflation and mega-projects. Questions were raised about banking sector governance and how important it is to bring back discipline in this sector. Concerns were also raised about the high volume of non-performing loans. Bangladesh now has over 12.17 crore voters: EC's latest draft update The panelists felt that this should be curbed with proper regulatory mechanisms and controlled by the central bank. They also felt that one of the reasons for a lower flow of remittances is the fluctuations in the rate of foreign currency. Muniruzzaman wrapped up the session by articulating that the current economic challenges can be overcome by ensuring accountability, transparency and establishing democratic governance. Ambassadors and Diplomats based in Dhaka, former Bangladeshi Ambassadors, representatives from international and business organizations, academicians and journalists attended the event.

Distinguished fellow of the Centre for Policy Dialogue (CPD) Professor Dr. Mustafizur Rahman has said that the government and Anti-Corruption Commission (ACC) should investigate how the assets of MPs have increased manifold. He said this at a view exchange meeting on the contemporary economic situation of Bangladesh organized by the Economic Reporters Forum (ERF) at Paltan in the capital today (Tuesday). The CPD fellow said, “I was surprised to see the rate of increase in wealth in the affidavits of the candidates in the 12th parliament elections. Where a plot of land costs Tk 1.0 crore; shown taka one lakh.” Even then, wealth increases hundreds of times, then what is the real picture? “Seeing this, it is not clear how much wealth has actually increased,” Prof Mustafiz raised question. Hasan Mahmud tears into CPD: 'Not genuine research' He said that in the affidavit of the candidates, the properties of many have increased hundreds of times. It is interesting to see how such a huge amount of wealth has grown in such a short time. “Those properties have increased so much, the government and their party should ask to know the source of these properties. At the same time, the Anti-Corruption Commission (ACC) and the Bangladesh Financial Intelligence Unit (BFIU) should find the source of their assets,” said Prof Mustfiz. He said that mismanagement of the banking sector, corruption, money laundering, everything is created by a 'dishonest cycle’. He said that defaulted loans are increasing, and some banks have also fallen into disaster due to providing aggressive loans. “It is Bangladesh Bank’s main responsibility to control this. They should be allowed to work independently either state or anyone can't interfere here, this must be ensured by the state,” he said. Over Tk 92,000 crore siphoned from banking sector via scams since 2008: CPD “Now the issue of merger of financially weak banks has been mentioned many times before. For this, legal weaknesses and regulations need to be fixed. Because the banking sector is the blood of the economy. The problem of this sector falls on the whole economy,” he pointed out. He said that a large amount of money has to be provisioned by the bank against default. This means that the money is not able to participate in the economy, it is lying in the bank. “By this, the bank's ability to give loans is decreasing and the income is decreasing,” he added. Dr. Mustafiz said that suppose banks are paying interest against a deposit of Tk100, but the bank is able to give a loan of Tk80 out of Tk100. That means the loan interest rate has to increase, this again affects investment. Regarding US sanctions, he said, America imposes trade restrictions (sanctions) for their own benefit. “If necessary, contracts with countries like Venezuela. Therefore, it should be emphasized that they do not get the opportunity to sanction without paying attention to whether they will sanction or not. We must ensure the wages and rights of our workers,” he suggested. Govt acting against clean energy transition, increasing dependency on coal and LNG: CPD “The government has brought the garment industry to this level by providing various facilities. The world market of clothing is $700 billion. We have export potential. There is no other sector as big as this. Exports need to be diversified, go to new markets.” There is still an opportunity to occupy a large part of this market, for that Bangladesh needs to modernize more. He suggested emphasizing the export of the leather sector and pharmaceuticals. The global markets have a potential future for those products. ERF’s general secretary Abul Kashem moderated the program while President Mohammad Refayet Ullah Mirdha presided over it.

The Centre for Policy Dialogue (CPD) on Sunday (October 8, 2023), based on research of living expenses, recommended minimum wage of Tk 17,568, at the entry level, for export-oriented apparel industries. Currently, the minimum wage for garment workers, set by the wage board on December 1, 2018, stands at Tk 8,000 – a sum frequently scrutinised, particularly given the prevailing economic crisis. Read: Lack of awareness a serious risk on pollution: CPD CPD said, if the foreign buyers pay an additional 7 cents per apparel product, factory owners will not be under pressure to pay this wage. The CPD made this proposal at the minimum wage revision, monitoring, and recommendation dialogue for the garment sector. The event was held at a hotel in Dhaka’s Gulshan. CPD Research Director Khondokar Golam Moazzem unveiled the proposal. He explained that the proposed increase in minimum wage has been made through findings from a comprehensive survey on the garment sector, conducted by CPD. The research institute said that they are making the proposal after surveying 228 workers in 76 factories. The CPD research director and senior research assistant Tamim Ahmed presented the keynote paper at the event. Read: Bangladesh will need $10 billion annually to import primary fuel for power generation: CPD BGMEA President Faruque Hassan, BKMEA Executive President Mohammad Hatim, Owners’ Representative in Minimum Wage Board and former president of BGMEA Siddikur Rahman, Minimum Wage Board Workers’ Representative Sirajul Islam, among others, were present at the event. The government set a new minimum wage board on April 10, 2023, tasked with determining the new minimum wage for the RMG industry through discussions at the tripartite level. The board has already met several times, and the new minimum wage is likely to be finalised within the next month. Read: It is the ‘profession’ of TIB and CPD to find loopholes in budget, Hasan Mahmud says The issue of minimum wage is immensely important, particularly given that it has a substantial impact on the RMG industry’s overall competitiveness and the livelihood of workers. Hence, it is crucial to examine the current structure of wages and to determine a new wage in a way that allows workers to have a fair minimum wage.  

The Centre for Policy Dialogue (CPD), a think tank, on Wednesday suggested taking immediate step to bring 856 hazardous garment factories under monitoring to avoid tragedies. Khondaker Golam Moazzem, research director of CPD, made the suggestion at a briefing on 'Workplace safety in the garment industry: Challenges to sustain achievement' at the CPD office in Dhanmondi. Read: Bangladesh keen to increase its readymade garments exports to Canada: BGMEA chief Executive director of CPD Dr Fahmida Khatun moderated the event. Other researchers of the organization were present at the briefing. Moazzem said, “There are still many risky garment factories in the country. 1887 factories are under the monitoring of the RMG Sustainability Council (RSC) and 350 factories have been identified as safe.” He said that 659 factories are under the monitoring of the Remediation Coordination Cell (RCC) and a total of 2,896 factories are under the monitoring of RSC and RCC. However, 856 factories, which is around 23 percent of the total factories, are currently not under any inspection. Read: Garments workers burn 3 police bikes at protest demanding pay rise An eye should be kept on how these factories can be brought under security, he said. Moazzem said  856 factories are doing business and exports are also going on but  there is no monitoring of them. This number of factories without monitoring is likely to increase and it may go up to 30 percent of the total factories in the near future, he added. Read: Tk 6.62cr worth garments seized at Ctg port “If there is an accident in these factories who will take responsibility? BGMEA and BKMEA will not take responsibility. We want all factories to be made accountable to some organization,” Moazzem said. According to the CPD, 2023 marks the 10th anniversary of the Rana Plaza collapse. In the decade following this disaster, significant initiatives have been taken to improve workplace safety in the garment industry in Bangladesh. In particular, the formation of Accords and Alliances and the activities they operate have provided strong guidance for workplace safety oversights, it said.

The Centre for Policy Dialogue (CPD), a think tank, in its traditional post-budget review on Friday (June 2, 2023) said the proposed national budget of Bangladesh for FY 2023-24 projected ambitious targets for both GDP growth and inflation, without putting forth any realistic measures to achieve them in light of global and domestic crises. The CPD said budget focused on increasing tax-GDP ratio, but the revenue growth target is not realistic, so the volume of deficit financing will ultimately widen. CPD Executive Director Dr Fahmida Khatun led the post-budget review, held at a hotel in Gulshan, and televised live on some tv channels. She said the budget has been placed at a time when the macroeconomic stability of Bangladesh has weakened significantly. REad: Proposed budget targets are challenging: FICCI “The macroeconomic stress is visible on lowering growth of revenue mobilisation and shrinking of fiscal space of current fiscal year (FY 2022-23), soaring borrowing from banks, higher price of daily essentials and decreasing foreign exchange reserve,” she added. The private credit growth projected to 15 percent in FY 2023-24 that was 14.1 percent in 2022-23. As of April 2023, private sector credit growth was 11.3 percent, she said. Replying to a query, CPD’s distinguished fellow professor Dr Mustafizur Rahman said the revenue growth projection in 2023-24, compared with actual revenue achievement of FY2022-23, wpi;d be a massive 39 percent, which is "absolutely ambitious" - perhaps even overambitious. The budget’s growth projection occurred based on a wrong concept, so multi sectoral problems would arrive in the implementing stage of the proposed budget. Read more: Budget 2023-24: Govt allocates Tk88,162 crore in education sector, up 8.2% Mustafiz expected a monetary policy reflecting fiscal policy in light of the budget and controlling measures of higher inflation. Khondaker Golam Moazzem, research director of CPD said the budget technically avoided the capital market development policy, which is very essential for such a developing economy. “Without establishing a realistic and sustainable capital market, investment financing cannot grow, the government incentive based capital market cannot play a role in new investment in the capital market,” he added. Towfiqul Islam Khan, Senior Research Fellow in CPD said curiously, no mention was found regarding the accumulation of external payments arrears or new forex reserve. REad: Finance minister unveils the country’s largest ever budget in Parliament Details about critical reforms, including shifting towards market-based dollar exchange rate and interest rate and adoption of periodic formula-based petroleum product prices, have not been explained in the budget speech, he said. The CPD projection said Bangladesh's proposed national budget of FY 2023-24 targets 15.5 percent growth will be around 39.7 percent growth target compared to the current budget achievement and Tk1.42 lakh crore is needed to be mobilized.

Preparations for Bangladesh's national budget for the 2023-24 fiscal must balance expectations in an election year with the conditions of the International Monetary Fund (IMF), and tackle inflation, foreign exchange crisis and revenue shortfall. Balancing public satisfaction and protecting the economy is a major issue. Economists say it has been seen in the past that election year budgets often prioritise public satisfaction over the improvement of the economy. As such, the opportunity to deliver a budget that is satisfactory is very limited, said macroeconomist and public policy analyst Dr Debapriya Bhattacharya, who is also a Distinguished Fellow at the Centre for Policy Dialogue (CPD). Read more: Safeguards are needed to protect vulnerable people under IMF-backed reforms: Debapriya He told UNB, "Before the election, all governments want to give a budget that satisfies the people. But due to the financial situation, fiscal deficit, and trade deficit, the opportunity is very limited for the government. If such a big effort is made, it will have a negative impact on the overall economy." "It is important to remember that this budget will be implemented by two governments. In this budget, flexibility must also be preserved. Because, if the government makes any big promises, there is doubt as to how much they can implement," he pointed out. Dr Debapriya said that the budget is coming at a time of political uncertainty in the country. Plus exit from LDC, and the Covid-19 response revival are issues hanging over the budget. Also read: 11pc of Bangladesh budget allocated for disaster risk reduction: State Minister “Compared to any other year, this year's budget has to be prepared in a very complicated situation. Because earlier, there would be a deficit in terms of income and expenditure in the country, but there would be comparative relief in terms of foreign transactions. But this time it is not,” he opined. Dr Debapriya said, "There has been a major disruption in the growth rate. It is going down further because there is no money, no dollar. There is a huge deficit in both areas to be dealt with together.” So the government has to control imports and limit its investment program. As a result, next year's growth target should also be moderated. Read more: Despite many challenges, Bangladesh remains one of the fastest growing economies in Asia-Pacific: Visiting IMF team "The financial structure has actually weakened," he said. Executive Director of the South Asian Network on Economic Modeling (SANEM) Salim Raihan, also a professor of economics at Dhaka University (DU), said that in the previous election years, the economy was not in such a crisis as this time. "As a result, no new major pressure was created in the economy despite budgeting for public satisfaction at that time. But this time, if the budget is made considering only public satisfaction in view of the election, it will create new pressure on the economy," Professor Raihan said. Read more: Bangladesh’s GDP growth rate will overtake China’s in current fiscal year, IMF predicts

Debapriya Bhattacharya, public policy analyst and distinguished fellow of  Centre for Policy Dialogue (CPD), said on Monday that when the IMF takes a reform programme for a country, sometimes inequality increases, because of the conditions they attach. So, safeguards are needed when the IMF is involved in any major reform agenda, said the prominent economist.   He made the statement in a dialogue of the CPD-Citizen Platform titled 'How the concern of disadvantaged people can be reflected in the upcoming national budget during the IMF reform period’, held at Bangabandhu International Conference Centre (BICC) in the capital on Monday. Presenting a keynote paper on the topic Debapriya said, when the IMF programme is taking place in a country, it tries to impose an authority on the economy of that country. Similarly, in Bangladesh the global lender imposed conditions of cutting subsidies on energy, electricity, advocated for market-based foreign exchange and interest rates, which could trigger sufferings of the disadvantaged groups. In addition, the IMF has spoken of additional tax-revenue collection. Debapriya said. He said there is no room to disagree with this, but from whom the tax will be collected, that is a big question. He also complained that there is no standard system of tax collection in the country so far. Planning minister MA Mannan was present in the function as the chief guest while Rana Mohammad Sohail MP, member of parliamentary standing committee on finance ministry and barrister Rumeen Farhana, an ex-MP of the current parliament from BNP,  were present as the special guests. Advocate Sultana Kamal chaired the discussion while former NBR Chairman Dr Muhammad Abdu Mazid, economist professor Mustafizur Rahman, CPD’s executive director Dr Fahmida Khatun, among others, spoke in the function. Representatives of different disadvantaged groups including old aged, youth leaders, students, physically challenged people, farmers,  tribal groups,  fishermen, women and cleaners’ community were present.  Planning minister MA Mannan said despite efforts made by members of the parliament, the government's allocation often fails to reach the country's underprivileged people. The minister emphasised on how the underprivileged were deprived in different sectors. But Prime Minister Sheikh Hasina understands the sufferings of the disadvantaged groups and she is trying to allocate more in the budget to save them, he said.  "Bangladesh is not dependent on the International Monetary Fund [IMF]. The budget is entirely the government's own plan. The IMF is merely a side-actor," he said. The minister also highlighted inflation as the biggest challenge at the moment, though he noted that it had slightly decreased last month. Debapriya said, according to the data of the Bureau of Statistics, poverty has decreased but inequality has increased. The disparity has also increased, alongside consumption inequality, he said. He, however, noted that data on wealth inequality was not available. He also expressed doubts about how much reform could be done depending on indirect taxes. Debapriya recommended the government should maintain a balance between sectors in terms of reforms and sectoral disparity.  He also emphasised on the need to raise direct taxes to minimise the tax burden on the lower income group of people.  

One of the country's leading think-tanks, the Center for Policy Dialogue (CPD), is working with a political motive to bring a particular party to power, Agriculture Minister Abdur Razzaque said on Monday. “CPD conducts many polls with political motives in mind. They want to bring a particular political party to power and are affiliates of that party,” he said. The AL leader made the remarks while speaking to reporters in the conference room of the Ministry of Agriculture at the secretariat. He questioned the results of CPD's recent survey, 'Corruption Still the Biggest Barrier to Business in Bangladesh,' saying, "People need to know their survey method. Their survey method and objectivity are highly questionable. They are neither sinless nor unbiased." Also read: Business environment in Bangladesh deteriorated in 2022, says CPD He stated that countries such as the United States, Japan, and India experienced negative growth as a result of the Covid pandemic and the Russia-Ukraine war, and asked, "How does the CPD perceive Bangladesh's positive growth despite this situation?" Abdur Razzak also stated that corruption exists in countries such as the United States and Germany, as well as in Bangladesh. "Khaleda Zia was imprisoned on corruption charges. Corruption has not yet been completely eradicated," he said.  During the meeting, the minister discussed increasing agricultural exports and the progress of implementing export roadmaps. He said that two roadmaps were implemented in order to increase agricultural goods and potato exports. He also mentioned that the ministry is working to reduce some barriers, such as banking complications and the allocation of export incentives.  

Centre for Policy Dialogue (CPD), a think-tank, has raised questions about the necessity of power tariff enhancement against the backdrop of the concerned ministry’s reported proposal for an allocation of Tk 56,860 crore as subsidy. “We don’t understand why the Ministry of Power, Energy and Mineral Resources wants to raise power tariff at the retail level when it seeks such a huge amount as subsidy,” said CPD research director Dr Khondaker Golam Moazzem while making a presentation on the interim report on the proposed “Integrated Power and Energy Master Plan (IEPMP) on Thursday at CPD office. Referring to the report, he said that of the total proposed amount, Tk 32,500 crore was sought for state-owned Bangladesh Power Development Board (BPDB) for power sector, Tk 19,360 crore for Bangladesh Petroleum Corporation(BPC) for petroleum import and Tk 5,000 crore for Petrobangla for LNG import. Read more: BERC now to consult with govt before any move on retail power tariff hike proposals “We don’t agree with a proposal of reducing subsidy by raising power tariff,” he said adding, Rather, the government should go for a phase out plan to retire the costly rental and quick rental power plants to reduce the cost of power generation. The CPD research director said state-owned BPC is now making huge profit instead of incurring loss in its petroleum business after enhancement in fuel prices as the global fuel price is showing a declining trend. He claimed that the BPC is now making a profit of over Tk 30 per litre in selling the diesel. Responding to a question, he said the ministry sought such a huge amount as subsidy might be due to an inflated calculation. CPD executive director Dr Fahmida Khatun also spoke on the occasion. Appreciating the government’s initiative for adopting the Integrated Power and Energy Master Plan (IEPMP) , Dr Golam Moazzem said this has some positive and negative aspects. Read more: Raising retail power tariff: 3 more distribution companies submit proposals "But despite that we appreciate the move as it has much more focus on renewable energy promotion than before,” he said. He, however, said that the government is now shifting from its original target of generating 40 percent of electricity from renewable energy by 2041. “We see a major change in the statements as they now say the target is “up to 40 percent” by inclusion of word “Clean Energy” instead of renewable energy,” he added. He also observed the government was trying to shift from the coal-fired power’s phase out plan by introducing “Carbon Capture Technology”. The developed world is now coming away from this technology because it is not environment-friendly as such technology is used to capture carbon from the coal-fired power plants. He said the cost of solar and other renewable energy (RE) options is coming down globally and generation of 16,000 MW of electricity, which is the targeted 40 percent of total planned power generation, is very much possible. Many local and foreign investors are ready to invest in the RE sector. “The RE technologies are getting cheaper day by day. The government should go for proven technology in this regard instead of unproven ones,” he said. He also observed that the government ultimately wants to promote import of  LNG (liquefied natural gas) through the proposed master plan while the RE did not get proper attention in it. “RE has not been avoided in the proposed master plan, but it was ignored,” he said.

Economists, during a discussion today, said the country’s banking sector is under threat due to lack of trust and good governance in banks. Certain groups are influencing Bangladesh Bank’s regulatory decision-making, which is alarming for the economy, the economists added. They made the observations at a discussion on ‘Managing the Economic Crisis’, organised by the Centre for Policy Dialogue (CPD), at a Dhaka hotel on Saturday. Minister Abdul Mannan attended the event as chief guest while Professor Dr Rehman Sobhan presided over the function. Former governor of Bangladesh Bank Dr Salahuddin Ahmed; economist Dr Ahsan H. Manur; former Chief Economist of World Bank’s Dhaka Office Dr. Zahid Hossain; Professor Abu Ahmed; Barrister Shamim Haider Patwari, Member of Standing Committee on Ministry of Law, Justice and Parliamentary Affairs; Rupali Haque Chowdhury, Managing Director, Berger Paints; Kamrul Islam, secretary of Bangladesh Garment Workers Solidarity, also spoke at the function. Dr Salehuddin said, “If Bangladesh Bank can handle policy implementation rigorously, including defaulted loan collection, I believe the situation will improve.” “But the central bank has to take the right policy independently, not look at anyone's face, as the current economic situation demands it,” he added. Read more: Stick to global lending sources for long-term, low-interest loan, CPD tells govt Any delayed decision of Bangladesh Bank, and the situation will worsen, he said. Citing an example, he said the total volume of non-performing loans (NPLs) has increased by more than three times in the last 10 years since 2012. The NPLs increased over Tk 1.34 lakh crore in the first quarter of the fiscal year 2023 from Tk 42725 crore in the fourth quarter of FY2012, as per a report of the central bank, he said. He said the economy is standing at a point where it has to have proper reforms or be ready to see its collapse. Executive Director of Policy Research Institute, Dr Ahsan H. Mansur, said deposits in the Brac Bank grew 27 percent in the last month as people are looking for good banks for the safety of their money. “So, trust and good governance can save a bank.” He said that rigorous and exemplary punishment for loan scams is needed to gain people’s trust, appointing an observer is not enough. Dr Zahid said the inflation is not created by external effects, domestic demand and GDP is growing, it does not match with the economy. CPD Executive Director Dr Fahmida Khatun placed a report titled "Managing the Economic Crisis: CPD's Policy Recommendation" at the event. "Actual NPLs will be much higher if loans in special mention accounts, loans with court injunctions, and rescheduled loans are included," the report said. Read more: No need to hike fuel price if BPC’s corruption and mismanagement end: CPD  The CPD mentioned that appointments of bank directors based on political connections, loans sanctioned on political grounds, rescheduling of loans despite poor record of repayment, and writing off loans to reduce the tax burden and clean balance sheets of banks are among the reasons behind the high volume of NPLs in the country. Besides, the weak internal control and compliance risk management of banks, lack of independence of Bangladesh Bank, dual regulation by the Financial Institutions Division and the central bank, and flexibilities given to defaulters by the central bank are also responsible for the high volume of the NPLs, it said.