Taskforce readies strategies to fix economic fault lines
The planning ministry's taskforce for sustainable development has drafted a report with proposals to fix the economic fault lines identified by the white paper on the economic state of the country and achieve moderate economic growth.
The 12-member body, formed to help reshape the economic landscape by stabilising the macroeconomic turbulence, has identified 16 key sectors, including macroeconomic strategy.
For all latest news, follow The Daily Star's Google News channel. The team is set to present short and mid-term recommendations to the interim government this month, according to its members.
The taskforce will also emphasise how the government can curb the existing elevated inflation to alleviate the excessive inflationary pressure on low and fixed-income households.
Led by KAS Murshid, former director general of the Bangladesh Institute of Development Studies (BIDS), the team was announced on September 11 to devise strategies for "re-strategizing the economy and mobilising resources for equitable and sustainable development".
The taskforce was given a three-month deadline to produce its report.
Recently, its members said they have completed their sectoral analysis.
These measures are seen as crucial in light of recent economic downturns complicated by political instability, industrial unrest and natural calamities following the August 5 political changeover.
Besides, the recommendations will come at a critical time for the country as the interim government has suspended the completion of the Eighth Five-Year Plan, scheduled to conclude in June 2025, and halted the preparation of the Ninth Five-Year Plan.
"We won't form any five-year plan. We will just propose a strategic plan for the future economy," said one of the taskforce members, who preferred to remain anonymous.
"The recently published white paper was backward-looking, mainly elaborating on economic mismanagement by the previous government. We, however, are focused on future strategies," the member added.
While the white paper assessed the previous government's actions, the taskforce's mandate is to lay out an economic roadmap for the short and mid-term future.
CHAPTERS IN THE DRAFT
The taskforce's first sector, titled "Rebuilding Economic Foundations: A Strategy for Macroeconomic Stability", outlines how the interim government can restore economic growth and stabilise the economy, which has been struggling with slow growth in recent years.
This chapter addresses pressing macroeconomic challenges, including the country's rising debt burden, which has put additional strain on the national economy.
In October, the World Bank (WB) slashed its forecast for Bangladesh's economic growth by 1.7 percentage points to 4 percent for fiscal year 2024-25 due to "significant uncertainties following recent political turmoil" and "data unavailability".
Similarly, the International Monetary Fund (IMF) also lowered Bangladesh's growth forecast to 4.5 percent by slashing it by 2.1 percentage points.
The multilateral lenders linked the lower growth forecast to political uncertainty, industrial unrest and floods, which have weighed heavily on economic activities.
This figure is the lowest since fiscal 2019-20, when the coronavirus pandemic began. In fiscal 2019-20, GDP growth was 3.4 percent.
The white paper, which was submitted to Chief Adviser Prof Muhammad Yunus on December 1, suggested that Bangladesh's growth figures have been inflated over the years.
The rebuilding economic foundations chapter analyses the debt burden as the country is reeling under pressure from debt servicing.
According to the finance ministry, Bangladesh's foreign debt servicing surged by nearly 31 percent year-on-year during the first four months of fiscal year 2024-25, reaching $1.44 billion in repayments.
The white paper predicted that debt servicing costs will double in the next three years.
Another chapter of the draft report, titled "Infrastructure and Connectivity: A Pathway to Economic Prosperity", evaluates the progress and future viability of mega infrastructure projects that have been central to the previous government's development narrative over the past 15 years.
With the interim government now reviewing whether to continue these projects, the taskforce is expected to recommend policies that can ensure that infrastructure investments contribute effectively to long-term economic prosperity.
The taskforce will also emphasise targeted policy reforms in the health and education sectors, areas identified as key to harnessing the country's demographic dividend.
"Recommendations will be made for both public and private sector improvements to these critical services," the taskforce member said.
The team will also address other issues sector-by-sector, such as trade potential, agriculture, industrial strategy, the potential of state-owned enterprises, climate policy and mitigation, energy policy, financial sector, structural inequality, poverty, vulnerability, social protection, youth, economic governance and digital economy.
The team comprises prominent economists and experts, including Akhtar Mahmood, a former WB official; Prof Selim Raihan of the University of Dhaka; Abdur Razzak, former head of research at the Commonwealth Secretariat; Prof Mushfiq Mobarak of Yale University; and Prof Shamsul Haque of the Bangladesh University of Engineering and Technology.
The other members are Prof Rumana Huque of the University of Dhaka; Nasim Manzoor, former president of the Metropolitan Chamber of Commerce and Industry; Monzur Hossain, research director at BIDS; Fahmida Khatun, executive director of the Centre for Policy Dialogue; AKM Fahim Mashrur, CEO of BDjobs; and Md Kawser Ahmed, member secretary of the General Economics Division of the Planning Commission.
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