The economic crisis that has the whole world, including Bangladesh, in its grip, will not ease before the year 2024, Dr Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD) said on Tuesday.
"The situation prevailing in foreign trade, investment, exchange rate and inflation will not end soon," he said while speaking at the 'ERF Dialogue' event organised by the Economic Reporters Forum (ERF) at the ERF office in Purana Paltan of the capital.
While the country's economy is not in crisis, it is nonetheless under pressure, Debapriya said, adding that the current instability in the macro economy will not go away just yet and may persist till FY 2023-24.
"Those who say that the crisis will end soon, are doing so through quick political thinking. This creates instability and lack of confidence in the market,” he said.
Regarding the decision to increase the price of fuel oil by 47 per cent and reduce it by 4 per cent, the economist called it-- "an excellent example of unethical mismanagement."
Regarding the government not increasing the interest rate to control inflation, he said, the government is somewhat hesitant about meeting the GDP ambition. That is why interest rates are not increasing yet. However, he suggested increasing interest rates to control inflation.
While talking about the growing corruption, Debapriya said that the development of capitalism leads to looting everywhere. In Bangladesh, there was looting in the financial sector first and in the capital market later. Now individuals, groups and institutions looting by means of overpriced schemes with government incentives.
In the developed world, after these loots, some reforms are usually made and the judicial system and institutions are established. However, that is not seen in Bangladesh. Here connection is given more importance than competition. As a result, accountability has weakened. The main political power will face the biggest loss in this situation.
With reference to the weakness of accountability, he said, the absence of an acceptable and participatory election has led to a situation where public representation is not ensured.
Regarding the economic progress of Bangladesh in the last decade, he said, "during this time we have increased from low income to lower middle income, selected for a transition from LDC, successfully implemented the MDGs, and proceeded to implement the SDGs."
However, this progress will not be sustainable in the coming days if the government cannot remove four deviations. According to him, the four deviations are– failure to increase private investment and tax collection in proportion to GDP, lack of necessary investment in the education and health sector and inequality in social protection programmes.
"If these deviations are not dealt with properly, it will not be possible to reach the next stage of transition. At the same time, there are doubts about whether the achievements will be sustainable." the eminent economist said.
