Think tank Centre for Policy Dialogue (CPD) on Thursday advised the government to prioritise loans from global lending agencies that offer long-term and low-interest funding to keep the country’s economy afloat.
The suggestion came at a press conference organised by the CPD where the independent think tank highlighted its observations on ‘Slowdown in Global Economy and Challenges for Bangladesh--How to Tackle’ in the capital.
CPD said in the wake of a looming food crisis and higher prices of fuel and high inflation, Bangladesh needs to be extra cautious in seeking foreign funding.
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For such funding for the country’s infrastructure development or budgetary support, CPD said that the government should prefer agencies like the World Bank, the International Monetary Fund (IMF), the Islamic Development Bank (IDB) and the Japan International Cooperation Agency (JICA).
The CPD says it sees seven obstacles for Bangladesh considering the economic challenges the country has been dealing with amid falling foreign reserves and a serious energy crisis.
It says dollar shortage, energy supply crisis, higher inflation, food deficit, supply chain disruption stemming from the Russia- Ukraine war, the adverse impact of the Covid-19 pandemic and climate change have posed real challenges before the country.
CPD added that the government should form a committee with representatives of the Prime Minister's Office, Ministry of Finance, Ministry of Planning, Ministry of Commerce, Ministry of Power, Energy and Mineral Resources, Ministry of Food, Ministry of Agriculture, the Bangladesh Bank and National Board of Revenue to tackle the growing economic crisis.
CPD’s Executive Director Dr Fahmida Khatun told journalists that the government should focus on energy supply from domestic sources by strengthening the production capacity of the gas fields and enhancing renewable energy supply to reduce the burden on foreign reserves.
She said the NBR should immediately consider removing the advance income tax (AIT), advance tax (AT) and regulatory duty (RD) on all imported essential food items to give some relief to the people amid higher inflation.
She suggested that at the same time the Bangladesh Competition Commission should take a strong stand against any business cartels by showing zero tolerance toward manipulative practices.
The inflationary pressure will hamper a sustainable and inclusive pandemic recovery since the real purchasing power of many people has declined, causing further inequality, she observed.
To keep the domestic economy vibrant, the CPD suggested following ‘a new consumption basket. for calculating inflation based on research on consumers’ behaviour and purchasing pattern.
The minimum wages should be enhanced in all industries so that workers can afford basic food, it said.
Private sector companies should also consider at least a 5 per cent increment this year to help them cope with higher inflation.
The distribution of essential commodities must be managed effectively and without any corruption so that eligible people have access to these items at a low price, it said.
Dr Fahmida also urged action against money laundering and following a national strategy for the prevention of money laundering and combating the financing of terrorism.
“Import-related recent restrictive measures should be continued to reduce pressure on forex and put focus on the implementation of foreign aid projects,” she said.
