Staff Reporter :
The country’s overall economy is under pressure, not in crisis. But if the situation is not dealt with on time properly and there is an attitude of denial, it will turn into a structural problem. It is inevitable.
“At the same time, we have to bring forward those force, who believe in Bangladesh’s future to maintain the progress of the country,” said Debapriya Bhattacharya, a distinguished fellow of the Centre for Policy Dialogue (CPD), while addressing a dialogue organised by the Economic Reporters’ Forum (ERF) at its auditorium in Dhaka Tuesday.
The economist compared that the state investment was higher than private investment, to an airplane running on one engine.
“When public investment is high, private investment (including FDI) does not come in, which creates a crowding out effect and a single engine plane cannot go very far,” he said
He said inequality has increased in last one and half decade, despite economic development in the country.
“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,” the CPD’s fellow alleged.
He further said, “There is no coordination among the three economic wheels, inflation, exchange rate and interest rate. No combined efforts have been seen so far. Rather the government is taking some cheapest steps to face the pressure.”
Referring the decision of hiking and reduction of fuel oil price is the best example of economic mismanagement, he said, “The fuel price has been reduced by Tk 5 after increasing 40 per cent. The decision of fuel price hike was given through only one ministry without calculation of overall situation.”
“It is not clear that these decisions are being made from where and who is making. Maybe bureaucrats are making these decisions. Because, people’s representatives do not seem to be involved in these decision-making processes,” he said.
“For these reasons, these decisions have to be changed frequently and it means there is no coordination between the institutions and their works. Thus, the problems, in Bangladesh, are being worsening further for the lack of coordination and expertise,” he added.
Suggesting moving forward by acknowledging the current economic instability in the country, he said, “The policy makers, who are saying that the problem will be solved in the next two to three months, are not making any useful comments. Rather, it may create a more negative situation in the market. As much as they will remain in denial, the expected economic stability will be delayed.”
He further said, “Development projects of the government have now turned into a way of looting money in Bangladesh.”
“Usually, when capitalism evolves in a country, some people loot money in various ways. In the initial stage of capitalism, this looting is common,” he said, adding that looting was done in the 1990s by the development of financial institutions like Shilpa Bank.
With the political help, a vested group took the loans and they loot the funds and thus launching the default loan culture in the country, the economist said.
In 1996, the stock market was the way of looting funds and then it continued by allowing low-performing companies to raise funds, he said.
At present, several individuals, groups and enterprises looting funds through the government’s development projects by taking political support, Debapriya said.
After such type of looting, a society becomes civilised with the help of accountability, proper rule of law, and non-biased administration, he said.
However, accountability becomes weak due to the absence of the proper democracy, the economist said.
As a result, the young generation is seeking opportunities to migrate and richer people also do not trust to keep their investment in the country rather they flight funds, he added.
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.
He also quoted four deviations– inadequate 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– in the country’s economy.
