Crisis not financial, but challenges in economy, politics still exist
Staff Reporter :
Finance Adviser to the interim government, Professor Salehuddin Ahmed, stated yesterday that while the country is not in a financial crisis, it faces significant political and economic challenges influenced by both internal and external factors.
Speaking at a policy dialogue on “Financial and Economic Reforms in Bangladesh 2024” organised by BRAC Business School at BRAC University in Dhaka, Professor Ahmed emphasised the dire state of governance in certain state-owned enterprises.
“Most of these institutions, particularly state-owned companies, are on the brink of collapse due to a lack of governance and accountability,” he noted.
Professor Ahmed acknowledged the challenges of establishing good governance but expressed optimism about the resilience and ingenuity of Bangladeshis.
“We are working towards creating good governance, which remains a significant challenge. However, I am not too disappointed as Bangladeshis are highly efficient and creative,” he remarked.
To combat inflation and stabilise markets, the government has introduced various measures, such as waiving import duties. However, the Adviser pointed out the complexity of inflationary pressures, saying, “Factors across the supply chain, including traders having to pay extortion at multiple points, contribute to price hikes.”
Addressing reforms in the revenue sector, Professor Ahmed proposed separating policy formulation from implementation. He also criticised the initiation of numerous projects without proper feasibility studies, which has strained financial governance.
“Many institutions are near collapse, but our multilateral and bilateral partners have expressed their willingness to support reforms,” he said, while cautioning that prolonged economic instability could jeopardise foreign assistance.
On money laundering, the Adviser assured strict actions against offenders, irrespective of their affiliations. “Efforts are underway to recover laundered funds, and anyone involved-whether from the public or private sector – will face consequences,” he warned.
At the same event, Dr Debapriya Bhattacharya, head of the National White Paper Committee, criticised the Awami League government for allegedly manipulating economic data.
“The GDP figures presented did not reflect actual conditions. The growth figures were misleading. There was no private investment growth, the Tax-to-GDP ratio stagnated, and the government prioritised visible development at the cost of economic fundamentals,” he argued.
Dr Bhattacharya, also a distinguished fellow at the Centre for Policy Dialogue (CPD), accused the previous government of exploiting the financial and energy sectors. “These sectors were deliberately targeted for wealth extraction, which has left the country grappling with weakened institutions,” he stated.
He further alleged that the central bank failed in its regulatory duties, enabling misappropriation within the banking sector.
Moderated by Professor Mohammad Mujibul Haque, Associate Dean of BRAC Business School, the dialogue concluded with multiple sessions exploring proposed reforms in key sectors, including banking, the stock market, and revenue collection.
Participants called for immediate action to stabilise the economy and restore confidence in financial governance.