Distinguished Fellow of the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya on Saturday highlighted two types of reforms - those left unfinished by the previous government and those essential to advancing Bangladesh beyond an LDC status. Speaking at a dialogue, he said prioritisation and a clear roadmap for reform, alongside prompt, accountable and consensus-driven implementation, are essential. Reform discussions, he said, should not be restricted to state superstructures but should also address grassroots economic issues. The Centre for Governance Studies (CGS) hosted the informative dialogue session to discuss the reform related to economic policies, including the banking sector and external loans at the Bangladesh Institute of International and Strategic Studies (BIISS) Auditorium. CGS Executive Director Zillur Rahman moderated the event. The speakers included Munira Khan (Chair, CGS), D. Rashed Al Mahmud Titumir (economist), Parvez Karim Abbasi (East West University), Prof Sayema Haque Bidisha (DU Pro-VC), Shahidul Islam Zahid (Professor, DU), Abdul Awal Mintoo (former FBCCI President), Anwar-ul Alam Chowdhury (BCI President), Muhammad Abdul Mazid (Chairman, Social Development Foundation), Md Jashim Uddin (former FBCCI President), Shahedul Islam Helal (former BCI President), Asif Ibrahim (FBCCI Committee Chair), Abdul Haque (Barvida President), Sabur Khan (DIU Chairman), Prasenjit Chakma (Chief Consultant, Padeco Co Ltd), Mir Nasir Hossain (former FBCCI President), MS Shekil Chowdhury (Centre for Non-Resident Bangladeshis), Dr M Abu Eusuf (DU), Suprova Suvha Zaman (DU student), Sadik Mahbub Islam (DU alumnus), and Saleh Ahmed (political analyst). NGOs want recognition of their contribution to Bangladesh’s development: Debapriya Zillur Rahman observed that the term ‘reform’ has long been part of Bangladesh’s national vocabulary, and once a disparaged concept, it has resurfaced with prominence after the mass uprising. People are now seeking change, as many institutions are not functioning as intended, he added. Chief Adviser Prof Yunus outlined several areas of reform, which have served as a foundation for these dialogue events. Dr Debapriya said the current government is unique, emerging from a mass uprising only months ago. While many are criticising the government and offering recommendations, few question why these suggestions were not implemented by those previously in power. A crucial question, he argued, is why those responsible for employment creation and job growth over the last 15 years have fallen short. ‘Country’s labour force deprived of fair wages over last decade’: Dr Debapriya “The state’s institutional dysfunction, distorted statistics and legal system manipulation for political gain all require scrutiny. Although the government has attempted to control commodity prices, results remain limited, though action is ongoing,” he said. Munira Khan talked about corruption, noting that it would be less problematic if illicit funds remained within Bangladesh. However, a significant amount of these funds is laundered abroad, a trend that must be halted. Dr Rashed Titumir addressed rising prices, noting that Bangladesh is a substantial importer of food. Although past narratives blamed external factors for price hikes, particularly oil affecting fertiliser costs, he questioned why importers have not engaged in dialogue with the government. He also asked why a comprehensive social welfare system, using the National ID system, has not yet been implemented. Dr Titumir questioned why the previous government’s budget framework is still being followed, despite insufficient industrialisation. Bangladesh could leverage Professor Yunus’s international reputation to attract industry but has yet to take full advantage of this. Parvez Karim Abbasi stated that Bangladesh’s economic recovery prospects for the next few years remain slim. He argued that the prior government mismanaged rather than misgoverned the economy, leaving Bangladesh to bear the cost. While US imports of Bangladesh RMG have increased, exports to the US have declined, partly due to Indian competition and lobbying efforts portraying Bangladesh as unstable. With international debt continuing to rise, Abbasi stressed that addressing corruption and retrieving laundered money, though popular topics, require political will and unity, especially as significant reforms are nearly impossible under an unelected government. Abdul Awal Mintoo explained that only 5% of the workforce enters government jobs, leaving the private sector as the primary employer. ‘Committee preparing White Paper will highlight corruption issues, not catch culprits’: Dr. Debapriya He pointed out that investment, crucial for job creation, depends on a stable socio-political environment. But, he said, Bangladesh’s low savings rate hampers investment. Mintoo argued that political and economic issues are intertwined, and without political stability, economic recovery will remain out of reach. Asif Ibrahim highlighted that Bangladeshi youths often feel excluded from the political process, as many have never voted. Survey data indicates that young people view a lack of transparency, accountability and vested interests as detrimental to the economy. Ibrahim proposed a job registration system and a youth credit card programme to facilitate access to loans and employment, and called for a commission to monitor essential commodity prices, as well as long-term private-sector financing mechanisms. Prasenjit Chakma suggested that digital platforms could disrupt market syndicates by linking producers directly with consumers, and called for affirmative action and tax incentives to support Aboriginal communities and SMEs. Mir Nasir argued that development must include the masses to have lasting benefits, and pointed out that Bangladesh has not yet capitalised on its demographic dividend, and education policy should encourage productivity beyond Dhaka. He also said the country’s reliance on banks as the sole finance mechanism and the resulting trust deficit in business.    

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.  

Noted economist Dr. Debapriya Bhattacharya said that the recent abnormal hike in fuel prices and then cutting it by only Tk. 5/litre is a classic example of economic mismanagement. He said that the sudden increase of fuel price by Tk 44/litre at midnight, and then reduce it by Tk5/litre, is a fraud. Such decisions are being made due to lack of expertise, he added. Debapriya, distinguished fellow of think tank Centre for Policy Dialogue (CPD) was speaking at the 'ERF Dialogue' organized by Economic Reporters Forum (ERF) on Tuesday. He said Bangladesh's main problem is not in the foreign transactions, rather it is the weakness of the domestic financial sector. He said the global recession may extend up to 2024, and its adverse impact can be reduced by strengthening the domestic economy. He also identified four deviations in the domestic economy, which may create a turmoil in Bangladesh. Read: Economy needs transitional policy to overcome the crisis: Debapriya These deviations are: not getting adequate investment in the private sector, weakness in revenue generation, lack of necessary investment in education and health sectors, and discrimination in the social safety net programmes. He said the growth is now being propelled by public investment as the private investment ratio to GDP has not increased over the years and still hovering around 23 to 24 per cent of GDP. On the other hand, the ratio of public investment to GDP has been increased to 7 to 8 per cent from 5 to 6 per cent. “There has been no such foreign direct investment as the FDI is still below the one per cent of GDP which is not enough for a dynamic economy,” he said. Referring to the attaining of GDP growth at 5 to 7 per cent on average over the last 10 years, the eminent economist said this suggests that the income is growing. “Then why the desired revenues are not being collected…is there any mismatch in the calculation?’ He opined that due to the comparatively lower level of revenue collection, the government has not been able to import food grains, side by side it has also not been possible to increase the coverage of the food assistance. “The government is being unable to reduce the duty and tariff for which it has rely heavily on the indirect tax to collect revenues which has put the commoners under pressure,” he added.  Debapriya alleged that that the health and education sectors are not enjoying the desired level of investment although hefty investments are being made in the physical infrastructure sector. He said the 20 mega projects are enjoying around 2 per cent investment of GDP whereas the investment in the health and education sectors is one percent each of GDP. He noted that the political force has been trying to make visible physical infrastructural development in a speedy manner in a bid to fulfill the political deficit. He alleged that there has been large-scale discrimination in the distribution of social safety net allowances during the COVID-19 pandemic as it was then proved that access to government services was not easy for the weak people. Citing that competitive business environment is not being created in the country, he said that certain individuals or quarters are getting preferences from the policy makers for which there has been inadequate flourish of talent-based and international standard human resource development. ERF président Sharmeen Rinvy presided over the programme, moderated by ERF general secretary SM Rashidul Islam.

Though Bangladesh remains in a suitable position on public debt, it may be pushed to yellow rate after FY 25 as spending of high value foreign debt increases at the nonproductive sector, a CPD study says. Both public and private sector debt from external sources have increased in recent past , which would create stress on forex reserves and widen the imbalance of trade, according to the study. The Centre for Policy Dialogue (CPD), a think tank, presented the study in a programme titled ‘Deconstructing Public Debt of Bangladesh: Trends, Status and Outlook’ organized virtually on Monday. Debapriya Bhattacharya, distinguished fellow of the CPD, presenting the overall scenario of Bangladesh’s debt said total national debt is increasing at a faster rate than Gross Domestic Product (GDP). Also read: Sovereign debt set to edge upwards in coming years He said the macro economy of the country will face pressure if the government does not take cautionary measures from now to spend debt money in the nonproductive sector. If the current tendency of national debt continues, the economy will witness weakening of external balance, deteriorating current account and balance of payment, fall in external financial flows including export revenue, remittance income, FDI, income on assets overseas, he said. As a result, the situation may arise as debt default, fall in economic growth, high inflation, foreign exchange reserve depletion, exchange rate depreciation, loss of economic competitiveness and lowering of credit rating, Debapriya observed. Replying to a query he said, if the GDP ratio of Bangladesh is not matching with other indicators of economy and different economic indicators are interrelated, while one of it is rising, the changes also affect others indicators. He urged the government to continue the quarterly budget review and debt situation review so that parliamentary standing committee members can discuss the matter for national interest. Also read: Bangladesh’s foreign debt far below risk limit: Economic review tells PM Bebapriya also urged the government entities to be more friendly and transparent in releasing economic data and easy access to it for the researchers. Bangladesh’s total public debt (as % of GDP), 34.7 percent, was among the lowest in South Asia in FY20, with Sri Lanka (112.2%) and Bhutan (120.7%), being the highest, source: IMF. The total outstanding debt amount in FY21 in Bangladesh was $131.14 billion, it increased by $16.45 billion on average for the past 3 years, which was about 2.5 percent of GDP. In FY21 only, total public debt increased more than $18.64 billion (additional 2.2 percent of GDP) of which more than 54 percent was domestic debt. The total debt as percentage of GDP decreased in Bangladesh between FY08 (38.8%) and FY17 (28.2%). It has since increased between FY18 (29.5%) and FY21 (36.9%). The linear decadal growth rates were 44.1% (FY02 to FY11) 66.6% (FY12 to FY21). Per capita outstanding debt – $432 (FY21), the annual increase of outstanding debt (FY20 to FY21) – $9.62 billion and annual increase in DSL – (FY20 to FY21) – $ 0.7 billion. Total outstanding external private debt amount in Bangladesh was $18.69 billion in FY21, the share of external private debt in total debt increased between FY03 (3.9%) and 2021 (14.5%)