No country can develop only by building infrastructures. If infrastructure does not match human resources, it seems to be like skeleton, said eminent economist Prof Wahiduddin Mahmud on Saturday.
He made the observation at a discussion meeting titled ‘Conversation with Professor Dr Wahiduddin Mahmud’ organised by the Economic Reporters Forum (ERF).
Stressing the need for quality education he said, “It is not enough to just build universities. They’re being built in almost every district but there has been a debate over their ranking. China and Vietnam have made progress through the development of their human resources.”
Pointing out that inequality increases due to inflation he said, “This is not time for mega projects. We should currently adopt policies taking low and middle-income people into account. They need more support. It should be prioritised in all spheres.”
“Our economy is very weak in terms of human resources. The country is facing a brain drain. India was facing the same situation but later they brought their skilled workforce back and put them to use. That is not the case for Bangladesh. We have not done much regarding human resource development but rather provide cost-effective solutions to the issues. Hence, our economy is going backwards.”
The former Dhaka University professor said, “The interest rate is kept at a certain point to provide benefits to businessmen. This has created a big problem in the country due to its capital flight, resulting in Begumpara and Bangladeshi people are investing in hotel chains of Singapore.”
“Dummy companies are created to launder money out of the country. Insecurity also increases money laundering as there is no trust in the country’s economy even if income is legitimate. The country is suffering due to this and non-arrival of remittances,” he added.
The eminent economist said, “Thousands of crores of taka have vanished from the banks. No one actually took the money away in a bag. Although everything is digital, the banking system itself has been compromised.”
“Due to the introduction of offshore banking, expatriates are sending remittances to the country through banks while the bank owners are laundering money. Now offshore banking is handling more remittance than hundi. This smuggled money was not carried away in a bag. But the intelligence agencies are better aware of this.”
Wahiduddin Mahmud suggested that reserves should not be spent on domestic expenses. Foreign reserves should be kept safely. “We can bring foreign investments.”
He said that reserves increased tremendously at one point but “we failed to follow integrated economic plan then. We felt complacent; big projects were undertaken abruptly as there were plenty of dollars in reserves. There was no concern that any sudden pressure may occur in future. But now alarm is rising as the amount of dollars is dwindling from reserves.”
According to him, reserves are kept to increase confidence and foreign investment. It is never meant for domestic use, so it can be useful during a time of crisis.
Through foreign reserves, the whole world gets to know that Bangladesh’s economy is stable which contributes to increased foreign investment, he added. “Besides, we did not adjust the exchange rates in due time as we were doing well.”
“Currently, we are initiating one after another large infrastructure projects through loans while most of them are essential but at the same time, many of them were not necessary presently.”
In the last three years, “our foreign debt has reached $100 billion from $50 billion, he said, adding that, “in the next 2-3 years, we have to repay $5 billion annually. If we continue to borrow more in the upcoming days, the repayment amount will increase simultaneously. For this, we have to take big infrastructural projects considering profit and loss.”
Regarding the current context of the country, he said, people will raise doubt if the economic indicators including monetary policy, reserves and inflation are not clarified in a clear and integrated manner.
“I don’t know the detailed condition of these issues. In these cases, all strategies should be taken co-ordinately in a clear process. Otherwise, instability and uncertainty will emerge in inflation, monetary policy and budget spending. Currently, alternatives are neither pleasant nor satisfactory. However, the least bad one among the alternatives should be chosen. This process won’t be clear unless it is transparent.”
Wahiduddin Mahmud said that decisions on political issues should be taken neutrally. There should be no conflict between the interests of the party and the country.
In this case, it is necessary to form a committee with representatives from all the political parties in the national interest, he suggested. Such cases should not be made into political issues. Not being allowed to join BRICS does not matter to Bangladesh.
“We have to move forward keeping good relations with other countries because Bangladesh has to depend on China and India for import of raw materials and on the western world for exports.”
