Eminent economist Dr Ahsan H. Mansur has said that political instability or uncertainty always affects the economy adversely.
Dr Mansur, executive director of the Policy Research Institute (PRI), a Dhaka-based think tank, was talking to UNB on the ongoing political situation centred on the 12th national election and the opposition's hartal-blockade programs.
“Bangladesh's macroeconomy is facing challenges not seen in the last 25/30 years, so tackling the grave situation politically is very important,” he said.
The political unrest alongside the macroeconomic instability is a double blow for the domestic economy, so the current domestic situation is different from any other election period in the history of Bangladesh, Dr Mansur pointed out.
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He said, “If the national election is not credible to the international and domestic people, the concern will grow over what steps and reaction come from western countries, which is the export destination of most Bangladeshi products.”
Meanwhile, the foreign countries have expressed concern over a decent working environment for labour, security of labour organisations' leaders, and desired wages in the export-oriented garment industries, he said.
Bangladesh's human rights record was reviewed for the fourth time under the Universal Periodic Review (UPR), an important UN human rights mechanism. Bangladesh's human rights record is under the scrutiny of the UN, EU, and USA, in this case, the steps for a political resolution and securing labour rights are very crucial, he opined.
Regarding releasing the second instalment of the IMF’s USD $4.70 billion loan, Dr. Mansur, who is also a former senior economist of the IMF, said that there is no reason to delay the second instalment of the loan as Bangladesh met most of the conditions set by the global lender.
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He said double-digit inflation has been prevailing in Bangladesh for a long time, while the South Asian countries including Sri Lank had succeeded in controlling inflation. In this area, Bangladesh has to do more to reduce the inflation rate to 4-5 percent.
He focused on a market-based foreign exchange rate to make the exchange rate sustainable instead of being controlled by the Bangladesh Bank or Bangladesh Foreign Exchange Dealers Association (BAFEDA).
Dr. Masur suggested policy reform and effective measures to stop money laundering or capital flight for a sustainable domestic foreign exchange market, in that the central banks have to apply their regulatory authority without bias or influence.
“Despite a huge workforce and advantage of geographical location, Bangladesh cannot attract big volume foreign direct investment (FDI) due to lack of policy reforms and weak regulatory authority. Political unrest will work as another barrier for FDI,” he pointed out.
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Regarding political resolution, he said that there is no alternative to dialogue amongst major political parties, and tolerance of opposition for those who are in strong positions or in power is very important.
Dr Mansur said all parties' participation in the upcoming election is the best option for Bangladesh in consideration of the overall current situation, while dialogue and level playing field for political parties are important issues.
He thinks that the situation is not normal, as what is happening in Bangladesh is being keenly watched around the world, so the authorities must proceed with reason.