Govt must come up with two-year economic plan

The interim government must devise a two-year mid-term plan on how to steer the economy in addition to an assessment of the past months and a short-term plan for the upcoming six months, said Debapriya Bhattacharya, the chair of the white paper committee.

The plan must be presented next month to a development forum comprising development partners, foreign investors, buyers of export products and representatives from countries employing Bangladeshi workers to build confidence, he said.

A mid-term plan is necessary for investment, development financing in projects, employment, education, health and social protection.

"The current interim government is short-term in nature, but it should still have a strategic plan outlining key areas such as investment, education, and social protection -- these strategies must be clearly defined," Bhattacharya said at a press conference yesterday.

The tenure of the white paper committee has ended; however, the report, which is now a government document, will be printed after incorporating some amendments.

Bhattacharya emphasised the need to reassess the illogical decisions made during the Eighth Five-Year Plan (8FYP).

"The interim government should prepare a flexible plan for about two years so that its duration can be adjusted based on evolving circumstances."

While it is essential to have institutional reforms to ensure accountability, there is a need for stability in the country to start such reforms.

"One is economic stability, and the other is the stability of order and security. If there is no security and the unbridled prices of products remain out of control, long-term reform gets jeopardised."

The steps taken by the government for economic management must be presented to the public comprehensively and transparently.

"So, if the details of the initiatives taken by the government in the last few months are presented to the public, people will understand how the government is working."

Bhattacharya stressed the importance of evaluating the interim government's activities once it completes six months and establishing a clear roadmap for the next six months.

Many reform initiatives have already been undertaken by the government, especially in banking, energy, local government and social protection.

"In education and health, the government is moving one step forward and then taking two steps backwards," he said, adding that the upcoming six months will be a very important time for the nation.

Until the upcoming budget arrives, the government must present its economic plan for the next six months, including its aims and vision, to the public beforehand.

"If there were a parliament, they would be compelled to present it there. Since there is no parliament, they must provide it directly to the public."

There must be projections for what the inflation, exchange rate and interest rate would be as a result of the reform measures.

"The government has to handle this more responsibly."

The most interesting finding by the white paper committee was how Bangladesh transitioned from crony capitalism to kleptocracy during the past government, said Bhattacharya, also a distinguished fellow at the Centre for Policy Dialogue.

"When you give the authority of the state to certain entities -- the legislative body, executive branch, or judiciary -- and they forge a coalition of looting. This is what we call kleptocracy."

The origin of this kleptocracy was the last three elections.

"With this, the space for basic democratic rights and accountability was annihilated."

In the process, local government and social strength were weakened. In some cases, social power -- which includes the media, citizens, entrepreneurs, economists, and even foreigners -- was paralysed.

"Even foreigners unnecessarily praised various advancements, the basis of which has now come under doubt," Bhattacharya added.

The poverty situation is such that if some people can't work for two days, they will fall into poverty, said committee member Imran Matin, who is the executive director of the BRAC Institute of Governance and Development.

The indemnity provision outlined in the Quick Rental Act has opened the royal gate of corruption, said another member M Tamim, who is a professor at Bangladesh University of Engineering and Technology.

"The consequences of this money that has been siphoned off will have to be borne for many years," said another member Mustafizur Rahman, also a distinguished fellow at CPD.

If 1 crore people can be brought under the tax net, the country's tax-GDP ratio, which is one of the lowest in the world, could be increased, said Mohammad Abu Eusuf, professor of development studies at Dhaka University.

"Besides, if we can reduce the tax exemption, we could increase the budget for education and health," he added.

About Tk 1 lakh crore has been sent abroad by the recruiting agencies through hundi, said Tasneem Arefa Siddiqui, professor of political science at Dhaka University.

Bangladesh has now been a comprehensive field of study of corruption due to its extent, nature and relevance, said Selim Raihan, executive director of the South Asian Network on Economic Modelling.

"This has been reflected through our report."

The reform initiatives taken in the past have been interrupted and those who halted the reform initiatives are still prevailing and active.

"If we think about recovering the economy and hope to boost private sector investment, then it is necessary to reform the most important sectors of the economy and to take a strong stance to this end strongly," said Raihan, also a professor of economics at the University of Dhaka.

About 40 percent of the development budget has been misappropriated, said AK Enamul Haque, deputy vice-chancellor of UCSI University, Bangladesh Branch.

The committee has done an analysis of investment data of around 1,400 companies registered with the Bangladesh Investment Development Authority between 2019 and 2024 and found that a significant portion of the investments were below Tk 15 crore, said Ferdaus Ara Begum, chief executive officer of Business Initiatives Leading Development.

It raises questions as to why the investors of such a small portion of investments have to go to BIDA, she said.

"We have earlier said that Bangladesh has a risk of falling into the middle-income trap. That has happened and we have tried to explain that with data," said Zahid Hussain, former lead economist at the World Bank's Dhaka office.

Now the big question is how to come out of the trap.

"I think there are three exit ways: one is macroeconomic stability, the second is policy reforms and the third is institutional accountability. There is no other exit way."