The growth figures presented by the past Awami League regime were incorrect, said Debapriya Bhattacharya, head of the white paper preparation committee on economy.

"One of the major problems was that the growth figure was a false figure," he said at a plenary session titled 'Actionable Financial and Economic Policies for an Inclusive, Equitable, and Prosperous Bangladesh' during a policy dialogue on financial and economic reforms in Bangladesh.

There were grave problems in the data on growth, and there was politicisation of data and information, he said, adding that if the growth narrative presented for a long time cannot be dissected, it will be difficult to move forward with reform.

The committee was trying to make it clear what type of economy the interim government inherited, he said at the event organised by BRAC University at its campus in Dhaka yesterday.

Bhattacharya provided detailed insights into why the GDP growth, reported as 6-7 percent over the years, was not accurate.

"The private sector investment was only 23 percent of GDP for over 10 years. GDP was growing without private investment. Public investment was only 6 to 8 percent."

On the other hand, GDP was high, but there was no increase in the tax-to-GDP ratio, which remained stuck at 8-9 percent.

"So, where has the money gone? Either it has not been properly collected, or it was totally outside the net, or it was taken out of the country through illicit financial flows."

Whatever money was left was allocated to visible development indicators, creating inter-sectoral imbalance.

Because of this, health, social development, social protection, and human development were neglected.

"Despite being a low-middle-income country, only 1 percent of GDP was allocated to health and 2 percent to education. Even this couldn't be fully utilised. Can you imagine how scandalous this is?"

If the growth figures are not right, it creates problems for total development transformation -- whether it is in the implementation of sustainable development goals, preparations for LDC graduation or moving toward higher middle-income status.

"We are already in the middle-income trap," said Bhattacharya, also a distinguished fellow at the Centre for Policy Dialogue.

He also explained why all of this happened.

"All the structures of the state which are supposed to promote, protect and provide services to the citizens of the country have become corrupted," he said, citing the financial sector as a prime example.

In the country, a strange anti-reform collusion and pro-corruption alliance were built with the participation of certain sections of politicians and bureaucrats.

The so-called narrative of development will be known in the economic history of Bangladesh as the rise of the oligarchs, he said.

The influence of the oligarchs spans banking, energy, the capital market and illicit financial flows.

"If you can't break these oligarchs and their basic power base, no reforms will happen in the country in the near future."

Terming the financial and energy sectors as the lungs of the country, he said both have been looted.

Those who manipulated the financial sector also worked as contractors for mega projects. "They are all part of the same group,"

Both oversight and corporate governance functions failed in the banking sector.

The oversight function, which should have been performed by the Bangladesh Bank, was itself compromised: the oligarchs placed their people in the central bank with monthly allowances.

So, economic reforms should start with the central bank.

A nexus of the legislative, executive and judiciary branches has brought the country to this level.

"If you can't repair the country, you can't implement any reforms."

Moving with reforms will be difficult if the interim government can't protect economic stability, Bhattacharya added.

Financial stability is essential as without it, foreign investment will not come, said Finance Adviser Salehuddin Ahmed.

However, the economy has stabilised much after the interim government took charge.

"Many predicted the exchange rate would rise to Tk 180-200 or even Tk 400, as in Sri Lanka. However, it has stabilised at Tk 120. This stability must be maintained."

He expressed concern about the profound damage to the financial sector.

"No one from outside could imagine the extent of the wounds inflicted on the sector."

He went to share a remark from BB Governor Ahsan H Mansur, a former economist of the International Monetary Fund. "He said, in all the countries I've visited, I've never seen irregularities, anarchy and corruption like this."

Ahmed, also a former BB governor, said when he left the central bank in 2009, defaulted loans amounted to Tk 18,000 crore.

"Now, they have risen to Tk 150,000 crore, and according to the IMF, the figure is Tk 250,000 crore. We must overcome these challenges," he said, while adding that there is no need for frustration as the Bangladeshi people possess creativity and resilience.

The government provided Tk 18,000 crore in a single month to honour many cheques, he said, adding that some banks are still struggling to meet depositors' demands.

"Imagine how the banks were looted. We have taken responsibility for safeguarding depositors' money," he said.

There is no reason to be pessimistic about the financial sector as it is gradually being repaired.

About the elevated inflation, he pinned the blame on the intermediaries in the supply chain.

"Yes, middlemen are needed, but some act as extortionists. While it is difficult to reach a consensus in politics, finding common ground for extortion seems surprisingly easy," he said, while stressing that political solutions are necessary here.

He acknowledged that the interim government has restored some order, including in the capital market. "Some pain will have to be endured while making corrections."

He also announced plans to separate the tax policymaking and tax collection wings of the National Board of Revenue.

The government is securing loans totalling $6-7 billion from international partners, including the World Bank and the IMF.

He criticised the governance of state-owned enterprises, many of which are on the brink of collapse due to mismanagement and a lack of accountability.

"Projects were taken up without feasibility studies and with loans at high-interest rates," he said, highlighting the tax holiday granted to Adani as an example.

Referring to Bangladesh's power purchase agreement with Adani, he said: "Is this even a proper deal?"

He criticised the previous BB governor for selling $12 billion out of $42 billion in reserves to artificially maintain a low exchange rate.

"It will take time to correct the wrong policy legacies inherited from the previous government," he added.