Experts warn of the repercussions from the severe economic challenges facing the country following the ousted Awami League (AL) government's extensive borrowing to cover a deficit budget. The inability to meet revenue targets, manage government spending, and implement a robust Annual Development Plan (ADP) has left the economy paralysed.
The interim government, they urged, must take short, medium and long term actions to address issues like the reserve crisis, import dependency, currency devaluation, and energy sector problems.
Speakers, at a dialogue organised by the Centre for Policy Dialogue (CPD) in Dhaka's Gulshan area on Wednesday, also suggested that constitutional reforms might be necessary to steer the country towards economic stability. The discussion was moderated by CPD Executive Director Fahmida Khatun.
Focused efforts
During her welcome speech at the dialogue titled ‘Challenges and tasks of the interim government,’Fahmida Khatun stated, “The interim government should take immediate action to address issues such as inflation, rising commodity prices, increasing non-performing loans (NPLs), banking sector liquidity crunch, sluggish export earnings, slowdown in remittance inflow, and stagnation in private sector investment.
Fahmida emphasised the urgent need to restore and improve the education sector, calling for “focused efforts to normalise the functioning of educational institutions, improving education quality, reform teacher training system, and address the mismatch between labour market demands and available skills.” These actions, she noted, are crucial for aligning education with employment opportunities.
According to the Bangladesh Bank (BB), the ousted AL government borrowed Tk 1.74 trillion from commercial banks from July 2023 to June 2024, which was Tk 218.19 billion at the end of the previous fiscal year.
Next 3 months
“Corruption, bribery, unreasonable experience requirements, long waits for government jobs, and financial barriers have severely restricted employment opportunities for the youth,” stated the CPD executive director. “For economic recovery and to improve the law and order situation, urgent initiatives must be taken within the next three months.”
CPD Distinguished Fellow Mustafizur Rahman added, “The priority should be to ensure justice and make these reforms irreversible. A student platform should be formed to monitor the process. The financial sector also faces significant challenges which must be addressed and purified.”
Experts stressed the need for legal and constitutional reforms to prevent the resurgence of injustice, corruption, and authoritarianism in the country. They also called for the release of a white paper documenting how human rights have been curtailed through technology over the past 15 years.
AKM Fahim Mashroor questioned, “In an independent country, why am I not able to use technology freely?” as he alleged that technology has been misused in the disbursement of funds and stressed the importance of disclosing all software used to violate human and civil rights. “A white paper is necessary to detail how these rights have been curtailed,” he added.
Shams Mahmud, managing director of Shasha Denims Limited and Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), demanded accountability for those involved in looting within the banking sector.
"Those responsible must be held accountable and prevented from fleeing the country," Mahmud stated.
He accused the chairman of the National Board of Revenue (NBR) of leading corrupt activities, alleging that the NBR has become a marketplace for bribes. "These individuals must be brought to justice," he insisted.
Selim R F Hussain, managing director of BRAC Bank and president of the Association of Bankers Bangladesh, warned, "The banking sector is in a far more fragile condition than you are aware of. Many more names involved in corruption have yet to be revealed."
Hussain also revealed, "They tell me to sign and do as they say, claiming they know better than I do" as he expressed grave concerns, stating that the information provided about non-performing loans and capital shortfalls in the banking sector is false.
"The situation is much worse than reported, and it will be extremely difficult to revive this sector," he said.
BRAC Bank managing director also criticised the system, noting that it is designed to support corporate entities while leaving small and medium enterprises deprived.
SHUJAN Secretary Badiul Alam Majumdar called for both legal and constitutional reforms to prevent the return of injustice, corruption, and authoritarianism. He recommended that some political settlement or compromise is necessary to implement these reforms.
Convenor of Bangladesh Health Watch and former vice chairperson of BRAC Mushtaque Raza Chowdhury along with Nusrat Tabassum, a coordinator of the Student Against Discrimination platform, were present as panellists at the dialogue.
