Economic crisis to persist until 2024: Debapriya

The current economic crisis crippling the whole world, including Bangladesh, will not ease before 2024, Dr Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue (CPD), wanrned on Tuesday.

“The troubling situations prevailing in foreign trade, investment, exchange rate and inflation will not end soon,” he said while speaking at the ‘ERF Dialogue’ organised by the Economic Reporters’ Forum (ERF) at its office in 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 soon and may persist till FY2023-24.

“Those who say that the crisis will end soon, are making such statements on political thinking. This creates instability and lack of confidence in the market,” he said.

Regarding the decision to increase the price of fuel by 47 per cent and reduce it by 4 per cent, the economist dubbed it “an excellent example of unethical mismanagement.”

ERF President Sharmin Rinvi presided over the programme while General Secretary SM Rashidul Islam conducted the event.

On lifting interest rate cap to ease rocketing inflation, he said, the government is somewhat hesitant in this regard due to its higher GDP ambition. He suggested increasing the bank lending rate to control inflation.

While talking about the growing corruption, Debapriya said 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 are looting by means of overpriced schemes with government incentives.

In the developed world, after such looting reforms are usually undertaken. 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 under this situation, the economist warned.

With reference to the pervasive lack 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 graduated from low-income status 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 addressed 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 in the long term.” the economist added.