[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

Illicit money flow, rampant corruption plagued economy

The country lost $16 billion annually on an average between 2009 and 2023 because of the illicit fund flow amid systemic tax evasion, misuse of exemptions, and poorly managed public finances under...

www.newagebd.net

Illicit money flow, rampant corruption plagued economy
Staff Correspondent 01 December, 2024, 17:05

Bangladesh interim government chief adviser Professor Muhammad Yunus speaks at the programme organised to hand over a white paper on the country's economy at the chief adviser office in Dhaka on Sunday. | CA press wing

The country lost $16 billion annually on an average between 2009 and 2023 because of the illicit fund flow amid systemic tax evasion, misuse of exemptions, and poorly managed public finances under the authoritarian Awami League regime ousted amid a mass uprising on August 5.

The illicit financial outflows are more than double the combined value of net foreign aid and Foreign Direct Invest, according to the White Paper on the State of Bangladesh Economy, submitted to chief adviser Muhammad Yunus on Sunday by a 12-member committee headed by economist Debapriya Bhattacharya.

The white paper, underscoring the significant fiscal opportunities lost to corruption, stated that halving tax exemptions could double education funding and triple health allocations.

Income tax exemptions were granted to selected large conglomerates, including Summit Group for its Liquefied Natural Gas terminal and 15 power plants, S Alam Group for its coal-based power plants and BEXIMCO Group for its Sukuk Bond, according to the white paper.

The white paper also highlighted that $14–24 billion was lost to political extortion, bribery, and inflated budgets with the annual development programme projects worth $60 billion in the past 15 years.

Chief adviser’s press secretary Shafiqul Alam in a briefing on the day said that the chief adviser was stunned by the plundering of public money during the AL regime.

Calling the white paper an autopsy of misappropriation of public funds by the authoritarian regime, he said that the interim government would start meetings with international agencies including the Federal Bureau of Investigation of the United States from December 10 to bring back the stolen assets.

On August 29, the white paper committee was appointed after the interim government assumed power on August 8, three days after deposed prime minister Shekh Hasina fled to India on August 5.

Exploring the overall economy left behind by the AL regime in 23 chapters, the 385-page white paper revealed that protracted periods of deceptive data, lax financial management, reckless macroeconomic management, public finance pilferage, and external sector imbalances had created deep wounds in the economy.

The deceptive economic outcome indicators, coupled with serious institutional flaws in sectors like banking, non-banking financial institutions, capital market and the energy sector are linked to the launch of overpriced mega projects and the huge outflow of illicit finance, said the white paper.

The white paper showed that the lack of democratic accountability from the fraudulent national elections of 2014, 2018 and 2024 shaped the authoritarian government that promoted collusion between the ruling politicians, a section of the bureaucrats and certain business elites for its sustainability.

It also said that the unholy alliance eroded institutional integrity of legislature, executive and the judiciary and paralyzed the non-state actors like media, civil society and private sectors, through intimidation, self-censorship and cooption leading to the rise of the oligarchs who ruled the political governance and economic management.

‘Consequently, the government lost its policy sovereignty. These oligarchs influenced and manipulated key facets of the economy to serve their vested interests, concealed by an illusory development narrative sustained by inflated and misleading data,’ said the paper.

Identifying two dozen channels of corruption, the paper puts the banking sector on top of the most corruption-ravaged sector, followed by physical infrastructure and energy and power while information and communication technology was also identified as one of the most corruption-affected sectors by its operational and technological novelty.

The banking sector crises have deepened due to politically influenced lending practices overburdened with distressed assets of Tk 6.75 lakh crore as of June 2024, equivalent to the cost of constructing 14 Dhaka metro rail systems or 24 Padma Bridges, according to the paper.

‘The S Alam Group alone took about Tk 2 lakh crore from the banks,’ said the white paper.

The paper also said that manipulated domestic production figures and understated demand for key commodities, such as rice, edible oil, and wheat, had destabilised markets while erratic and politically influenced procurement policies benefited powerful business groups and exacerbated consumer hardships due to almost double-digit inflation over the past two years.

The paper identified that Tk 13.4 lakh crore had been funnelled through hundi transactions in the past decade by recruiting agencies for visa purchases — an amount four times the cost of constructing Dhaka metro rail between Uttara and Motijheel.

The paper classified 73 per cent of social safety net beneficiaries as non-poor until 2022.

Receiving the white paper, the chief adviser thanked the committee for doing a landmark, saying it should be published once it is finalised and be taught in textbooks in national college and university curriculum according to the press wing of the chief adviser.

Committee member Mustafizur Rahman said that they examined seven large projects costing over Tk 10,000 crore each and found that the initial estimate of Tk 1,14,000 crore was revised to Tk 1,95,000 crore, recording 70 per cent increase by adding many components, showing an inflated land price, and manipulating the purchase.

This happened without analysing the cost benefit, he said, adding that total expenses on 29 large projects were $87 billion, or Tk 7,80,000 crore.

Committee member AK Enamul Haque said that in the past 15 years over Tk 7,00,000 crore was spent on the ADP, and 40 per cent of the money was plundered by bureaucrats.

M Tamim, another member of the committee, said that $30 billion was invested on power generation, and if the kickback was considered 10 per cent, the amount would be at least $3 billion.​

 

[Saif]

A possible game-changer for BD's sustainable growth

Amid the ongoing foreign exchange volatility, local businesses could attract substantial capital through "foreign private equity funds", offering a lifeline to the crisis while fostering sustainable growth. Launched in 2020, the foreign private equity fund BMA, supported by globally renowned

thefinancialexpress.com.bd

A possible game-changer for BD's sustainable growth
Jasim Uddin Haroon
Published :
Dec 02, 2024 00:57
Updated :
Dec 02, 2024 00:57

Amid the ongoing foreign exchange volatility, local businesses could attract substantial capital through "foreign private equity funds", offering a lifeline to the crisis while fostering sustainable growth.

Launched in 2020, the foreign private equity fund BMA, supported by globally renowned institutions, such as British International Investment (BII), Dutch development bank FMO, and Norway's Norfund, focuses on high-potential sectors, including manufacturing, agriculture, food, and financial services.

BMA distinguishes itself as the only private equity fund exclusively mandated to invest in Bangladesh.

Traditionally, local corporate entities rely on banks, the capital market, or foreign loans for financing. However, foreign loans often come with high variable interest rates, restrictive conditions, and short-term repayment schedules, posing challenges for sustainable growth.

Private equity provides a viable alternative by injecting long-term capital into businesses, helping them streamline operations, drive growth, and enhance compliance with environmental, social, and governance (ESG) standards.

"We can invest between $10 million and $25 million in a single company and are open to investing in diversified sectors," said Khalid Quadir, managing partner of BMA.

He emphasised the untapped potential in Bangladesh's agricultural sector, which boasts an annual turnover exceeding $40 billion.

Quadir identified the light engineering sector as particularly promising. "This sector has the potential to replicate China's success in manufacturing and innovation, positioning Bangladesh as a mini China," he said.

BMA has already demonstrated this strategy through its investment in ACI Motors, a market leader in agricultural mechanisation and automotive.

The fund focuses on investing in compliant and well-governed companies like ACI Motors to create jobs and drive sustainable growth.

A notable success story is Japanese conglomerate Mitsui & Co's recent acquisition of a substantial stake in ACI Motors.

"Such investments bring global confidence, as major players feel reassured when they see foreign investments have already been established," Quadir said. He also emphasised BMA had facilitated a conducive partnership within ACI Motors for new global players to join in. He believes this could be a replicable model for other aspiring businesses.

ACI Motors assembles and distributes branded agrarian machinery, including products from Japan's Yanmar, motorcycles from Yamaha, and commercial vehicles from China's Foton.

Despite its potential, the country faces multiple hurdles to attract large foreign capital infusion. Many local corporations struggle with poor governance and outdated operational frameworks.

Regulatory inefficiencies, particularly at the Bangladesh Securities and Exchange Commission (BSEC), also deter private equity investments. For instance, initial public offerings (IPOs), a common exit strategy for such private equity funds, face lengthy delays.

Private equity funds often resort to alternative exit strategies, such as selling stakes to foreign entrepreneurs or local sponsors. Typically, they aim to exit within five years. But in Bangladesh, these investments often remain tied up for over a decade due to regulatory delays.

To attract more private equity investments, Bangladesh must implement regulatory reforms to enable smoother exits for investors.

As the country transitions from a developing economy to a middle-income one, fostering technology-driven industries will be crucial to maintaining competitiveness.

"With improved compliance, governance, and sustainability, Bangladesh can draw even greater foreign direct investment and private equity funding," said Dr M Masrur Reaz, chairman and CEO of Policy Exchange of Bangladesh, a private think tank.

He emphasised such investments were vital for local businesses in this critical period.​

 

[Saif]

An anatomy of the current economic situation in Bangladesh

Bangladesh's economy faces instability, inflation, and political unrest hindering growth.

www.thedailystar.net

An anatomy of the current economic situation in Bangladesh

VISUAL:STAR

The economy of Bangladesh is at such a critical juncture, struggling with both long-standing structural problems and newly emerging issues. Though exports and remittances have shown improvement in recent times, continuing macroeconomic instability, high inflation, and political unrest continue to shake the prospects for sustainable growth and recovery. These imperative challenges now require well-coordinated strategies and overall reform initiatives that will stabilise the economy on the pathway of resilient and sustainable growth.

Macroeconomic instability and persistent inflation

Despite the expected recovery, the incidence of macroeconomic instability remains high, denting confidence. Inflation is still at a high level, shredding real incomes and further increasing financial vulnerability among the population. For more than two years, monetary policy has periodically resorted to raising interest rates to combat inflation. Though since May 2022 until now, Bangladesh Bank has hiked the repo rate by 11 times, the impact remains marginal. In the context of persistently high inflation for more than two years and the resulting erosion of real incomes, the effectiveness of controlling inflation through demand contraction via higher interest rates has come under scrutiny. Such a rise in interest rates without much success in lowering inflation may take a toll on private investment and thus weaken the prospects of economic recovery. On the other hand, the recent move by Bangladesh Bank to infuse Tk 22,500 crore in liquidity support to six crisis-hit banks through money printing is also unlikely to ease inflationary pressures. The most important issue in inflation control is the need for coordination among monetary policy, fiscal policy, and the management of the domestic market, which is lacking. While taxes and duties on essential imports need to be lowered on time, equally important is the effective regulation of anti-competitive practices in the market and addressing bottlenecks in the value chain.

The political economy of law and order

The economic uncertainty is being exacerbated by a deteriorating law and order situation. The increase in political conflicts and social unrest surely points to an unstable environment that scares away investment and dampens economic activities. Resultant insecurity disrupts supply chains, and labour productivity, and increases the cost of doing business. Despite repeated emphasis by top policymakers on restoring law and order, significant progress remains elusive.

Labour unrest in different sectors including the garment sector is very critical. Especially for the RMG, the unsettled disputes regarding wages, benefits and working conditions may impact the reputation of the sector and its export competitiveness. Preferential market access threatened by graduation from LDC status in 2026 might further squeeze the profit margins of exporters already suffering from operational disruptions.

However, export and remittance inflows have been doing reasonably well in recent months. But to sustain this growth, the political and economic environment should remain stable. The ongoing political conflicts and social unrest are so critical that gains would easily be lost because of uncertainty that keeps buyers and investors away from the Bangladeshi market.

The uncertain path of reform initiatives

While the interim government has expressed a strong commitment to initiating reforms in critical economic and political domains, the success of these efforts hinges on building an effective consensus among key stakeholders, including competing political forces and the bureaucracy. For instance, addressing high levels of non-performing loans and weak governance is essential to restructuring the banking sector and restoring financial stability. Similarly, reforms in taxation are crucial to increasing revenue generation and reducing reliance on foreign borrowing.

However, without consensus among stakeholders, the reform agenda risks becoming fragmented and contested, with limited progress in core areas like taxation, the banking sector, public expenditure, and institutional governance. Moreover, entrenched interest groups wielding significant power may resist these changes, further undermining the reform process. This lack of cohesion and resistance may hamper economic recovery, deepen public disillusionment with governance, and erode trust in the system.

A path to economic recovery and sustained growth

Given the current economic and political landscape, the following measures are essential to place Bangladesh on a sustainable growth path:

First, coherence in monetary policy, fiscal measures, and market regulation should be enhanced. An empowered coordination body can ensure that the policies for inflation control cover both demand and supply-side factors. Second, reforms of critical economic, political, administrative, and judicial domains are very important to nurture good governance and restore the people's confidence. Openness and participation in policymaking processes can build consensus and reduce resistance. The interim government should present the roadmaps for the reforms in these critical domains and invite stakeholders to share their opinions.

Third, there is a need to stem the deterioration in the law-and-order situation by building a dialogue between political and social groups. Also, there should be a clear roadmap to the elections (both national and local) so that a conflict-less environment can be created in which economic activities can thrive. Fourth, policymakers should help the negotiation between labour groups and employers to end disputes and adhere to international labour standards, incentives for innovation, and diversification of the sectors so that they can meet challenges after LDC graduation.

Fifth, there is a need to decrease the dependence on RMG and remittances by helping other potential export sectors grow. This will require addressing the sector-specific problems as well as reducing the high cost of doing business. Finally, vulnerable groups must be cushioned against inflationary pressures through targeted subsidies and social safety nets. This would help maintain domestic consumption and prevent sharp increases in the level of poverty.

Bangladesh stands at its crossroads, where the pace of its economic future may well depend upon how boldly and effectively current challenges will be met by policymakers. Economic instability currently interplays in a political battle with particularly weak governance. Instead of quick fixes, a multisectoral approach that underpins reforms, stability, and inclusivity is needed to usher in sustainable development. The time to begin churning this process is now because the costs of inaction are too high for a country whose task of securing its economic future remains at the top of the agenda.

Dr Selim Raihan is professor at the Department of Economics in the University of Dhaka and executive director of South Asian Network on Economic Modeling (SANEM).​

 

[Saif]

$6 billion foreign loan commitments may come by June: finance adviser

The commitments will come from multiple sources, including World Bank, IMF, ADB, Opec

www.thedailystar.net

$6 billion foreign loan commitments may come by June: finance adviser
The commitments will come from multiple sources, including World Bank, IMF, ADB, Opec

The government expects to get new loan commitments worth $6 billion for reform activities from the development partners within next June, Finance Adviser Salehuddin Ahmed said today.

They will come from multiple development partners, including the World Bank, International Monetary Fund, the Asian Development Bank and the Organization of the Petroleum Exporting Countries (Opec), he said.

The adviser shared the information with journalists after a meeting with an IMF mission at his office in the capital.

The mission, led by its chief Chris Papadakis, came to Bangladesh to review the country's performance and compliance with structural reform conditions that the IMF attached for the fourth tranche of the $4.7 billion loan.

The government will seek extra fund as it is going through a reform process in many sectors like banking, which will require additional spending, the adviser said.

It may take time to disburse the fund, as it is not possible to release the entire amount within a year, he said.

However, the commitments may come by June this year, he added.

Earlier in August after taking charge of the country, the interim government had said it would seek $3 billion of additional loan from the IMF.

In October, Ahmed discussed the new IMF loan on the sidelines of the annual meetings of the IMF and the World Bank Group held in Washington in late October this year.

In today's meeting, the mission wanted to know what strategies the government has taken and will take to improve the country's economic situation, the adviser said.

He also mentioned today's scheduled meeting of the mission with the Bangladesh Bank governor, during which the delegation sought to know what steps had been taken to reform the banking sector.​

 

[Saif]

Bangladesh ‘sleepwalked’ into middle-income trap

Bangladesh, mired in data fog, has “sleepwalked” into the middle-income trap according to the white paper on the state of the country’s economy.

www.thedailystar.net

Bangladesh ‘sleepwalked’ into middle-income trap
White paper asserts

Bangladesh, mired in data fog, has "sleepwalked" into the middle-income trap according to the white paper on the state of the country's economy.

The term refers to a situation where a country experiences rapid economic growth and moves from a low-income economy to middle-income status but then struggles to make the leap to high-income status.

"We said earlier that Bangladesh is at risk of falling into the middle-income trap. But it has already happened. We have tried to explain it with data in the white paper," Zahid Hussain, a key member of the white paper panel, said at a press conference on Monday, a day after the committee handed over the final report to Chief Adviser Prof Muhammad Yunus.

Addressing the same event, Debapriya Bhattacharya, who led the white paper panel, supported Hussain's claim.

A major reason was the practice of inflating official data, which meant the country did not have any idea about the path it was truly on

As for how the country had fallen into this trap, the white paper identified "stasis in structural reforms, reform reversals, institutional decadence, global adversities, and a growing gulf between the reality on the ground and the perceptions of policymakers".

Other factors that it mentioned were employment remaining concentrated in low-productivity agriculture and informal activities, ubiquitous resource misallocations, and the slipping competitiveness of the economy.

Another major reason was the practice of inflating official data, which meant the country did not have any idea about the path it was truly on.

For example, according to the white paper, Bangladesh's economic growth has been overstated since 1995.

The remarks were made at a time when Bangladesh's overall economy is facing significant challenges, exacerbated by persistent inflation and a banking sector crisis brought on by a massive amount of non-performing loans, poor governance, and a severe liquidity crunch.

Simultaneously, slow infrastructure development and inefficiencies plague the development industry while political unpredictability and low business confidence prevent investment from growing in the country.

Unemployment is also increasing, particularly among youth, as the economy fails to generate adequate quality employment opportunities.

These issues have pushed Bangladesh into the middle-income trap, according to industry insiders.

The World Bank defines the "middle-income trap" as a situation where middle-income countries face challenges to economic growth, innovation, and wage competition.

In the World Bank's 2024 World Development Report, the middle-income trap was described as a period of slow growth and a decline in productivity gains.

It is a situation where a country is unable to compete with low-wage countries and high-income countries, is prone to premature slowdowns in development, and relies on policies based on superficial measures of economic efficiency.

The multinational lender added that middle-income countries face geopolitical challenges, demographic challenges, environmental challenges, competition from low-wage countries, and competition from high-income countries.

According to the white paper panel, the only way to break free of this shackle is to increase the total factor productivity, which measures how much output can be produced from a certain amount of inputs, particularly labour productivity.

"Education and skill of the labour force are the key to enhancing labour productivity and sustaining higher growth," it said.

Zahid Hussain, a former lead economist at the World Bank's Dhaka office, said the big concern now is finding a way out of the trap.

"I think there are three exits. One is macroeconomic stability, the second is policy reform and the third is institutional accountability. There are no other exits."

According to experts and economic analysts, if Bangladesh falls into the middle-income trap, it will be unlikely to achieve its goal of becoming a developed nation by 2041.

At the end of 2023, there were 108 countries, including China, Brazil, Türkiye and India, stuck in the "middle-income trap", according to the World Bank. The countries are home to 6 billion people.​

 

[Saif]

IMF begins talks on fresh loans

The third review mission of International Monetary Fund (IMF) yesterday entered into discussions with the interim government of Bangladesh regarding potential conditions for a fresh $3 billion loan.

www.thedailystar.net

IMF begins talks on fresh loans
Interim govt expects $6b budget support by next June

The International Monetary Fund (IMF) headquarters building is seen in Washington, U.S., April 8, 2019. REUTERS

The third review mission of International Monetary Fund (IMF) yesterday entered into discussions with the interim government of Bangladesh regarding potential conditions for a fresh $3 billion loan.

The IMF mission, whose primary task is to assess the country's progress in meeting its criteria for releasing the fourth tranche of a $4.7 billion loan, will continue the discussions until December 17.

The IMF mission led by Chris Papadakis held separate meetings with Finance Adviser Salehuddin Ahmed and Bangladesh Bank Governor Ahsan H Mansur alongside other senior officials.

"We discussed the disbursal of the existing loan package and also sought extra funds. As the government is going for many reforms, it will need more money," Ahmed said after the meeting.

But other than financing reforms, particularly in the banking sector and revenue collection, the funds will also be needed to address any deficit in the country's current account and foreign exchange reserve.

Having already sought funds for its reform activities, the government is expecting a total commitment of $6 billion from the World Bank, IMF, OPEC Fund and others by next June, he added.

After taking office in August, the interim government said it would seek an additional $3 billion loan from the IMF to reduce the existing pressure on the foreign exchange reserves.

On the last week of September, an IMF mission came to take stock of the country's economic situation and what it requires to recover.

In October, Bangladesh opened discussions with the IMF regarding the new loan in a sideline meeting when Ahmed visited Washington to attend the annual meeting of the World Bank and IMF.

Following this discussion, the mission came to Bangladesh to review the country's performance and compliance with structural reform conditions for the fourth tranche of the $4.7 billion loan.

The finance adviser informed that the mission came to observe the country's condition in terms of revenue collection, its fiscal deficit, GDP growth, and inflation.

"They want to know what strategies the government has taken and will take. The mission also will meet with the central bank to see what steps were taken to reform the banking sector," he said.

Ahmed also informed that the government had argued that stability has returned to the banking sector in part.

"Already, the foreign exchange rate is not fluctuating heavily like in previous months," he said.

Besides, even a troubled lender like Islami Bank is starting to perform well even though it initially needed liquidity support.

"So, all other the banks will also soon become financially stable," he hoped.

Regarding the economic situation, Ahmed said inward remittance was at a satisfactory level and export growth was not low either.

Furthermore, Ahmed said although imports are still low, they have been increasing lately, with the interim government working to raise the inadequate level of capital machinery imports.

"Whatever measure we take will be good for the country in the long run. Besides, we will not take any whimsical steps that the next government cannot follow," he said.

"The IMF will give some targets (for the new loan) and we will try to fulfil them," Ahmed added.

The IMF mission expressed satisfaction about the reform activities of Bangladesh Bank but is concerned about the stubbornly high inflation rate, according to central bank officials present at the meeting.

The central bank officials told the IMF mission that the policy rate has been increased twice and inflation has not been tamed. Still, they expect it will at least relieve some of the inflationary pressure.

"The IMF mission said the policy rate could be increased further if inflation does not come under control," said a Bangladesh Bank official on condition of anonymity.

The multilateral lender approved the $4.7 billion loan in January 2023. Bangladesh has already received $2.3 billion of the total amount in three tranches.

Of the $2.3 billion received so far, $1.1 billion arrived as the third tranche in June this year.​

 

[Saif]

Gen Z: Shaping the future of business

Generation Z, popularly known as Gen Z, is a term used to represent people born between the late 1990s and early 2000s. This demographic cohort presently accounts for approximately 30 percent of the global population. It is estimated that Gen Z will account for 27 percent of the global workforce...

www.thedailystar.net

Gen Z: Shaping the future of business

Generation Z, popularly known as Gen Z, is a term used to represent people born between the late 1990s and early 2000s. This demographic cohort presently accounts for approximately 30 percent of the global population. It is estimated that Gen Z will account for 27 percent of the global workforce by 2025.

The situation in Bangladesh is no different. It is a young country with a median age of around 28 years. Individuals aged 10 to 24 years, which includes a substantial portion of Gen Z, make up about 30 percent of the country's total population.

As this generation comes of age and enters the workforce and consumer markets, their distinct characteristics, values, and behaviours will significantly influence how businesses operate and engage with customers. Gen Z exhibits certain attributes that differentiate them from previous generations, such as Millennials, Generation X, and Baby Boomers. Understanding these attributes is crucial for businesses.

This generation is overwhelmingly tech-savvy; highly proficient in using technology and digital tools for communication, entertainment, education and shopping. This digital fluency shapes their preferences for instant access to information and services.

As this generation grew up at the peak of globalisation, they are very inclusive and value diversity. Gen Z is genuinely concerned about social issues like climate change, racism, inequality, etc. They tend to be very pragmatic and realistic as they have experienced economic uncertainty, political instability and global crises.

This generation appreciates collaboration and teamwork but authenticity and self-expression do matter to them as well. While they have relatively shorter attention spans caused by social media, it is because of the internet and social media that they are exposed to different cultures, ideas and lifestyles, leading to a broader understanding of global issues and a desire for interconnectedness.

This cohort prefers to spend money on travel, events and activities that enrich their experiences rather than on traditional consumer goods. Mental health is a foremost concern for them.

Organisations need to understand and adapt to Gen Z's preferences to thrive in an increasingly competitive landscape. Businesses need to invest in social media marketing, influencer collaborations and interactive content to effectively reach and engage this generation. Companies have to develop sustainable products, prioritise ethical sourcing and create offerings that align with the social issues important to this generation.

Organisations that connect with this cohort emotionally and demonstrate a commitment to their values will foster loyalty. Companies have to embrace technology to meet the expectations of this tech-savvy generation. Flexible work arrangements, mental health support and professional development opportunities are some of the critical topics to attract and retain this group.

Some global companies have already adapted their business strategies, marketing approaches and product offerings to align with the values and preferences of Gen Z. For example, Nike has incorporated sustainable practices into its production processes, creating eco-friendly product lines like the "Move to Zero" initiative, which aims to reduce waste and carbon emissions. Starbucks engages with Gen Z through its social media presence, promoting causes like racial equality. Netflix has adapted its content strategy to cater to Gen Z's diverse tastes and preferences. The streaming service produces original content that reflects the experiences and challenges faced by this generation, such as shows addressing mental health, social justice, and identity.

Bangladeshi businesses should gear up to understand and adapt to these characteristics of Gen Z for engaging effectively with this influential cohort as they continue to shape the business.

The author is chairman and managing director of BASF Bangladesh Limited​

 

[Saif]

IMF asks to raise tax-GDP ratio by 0.6 percentage points

The International Monetary Fund (IMF) has asked to increase the tax to GDP ratio by 0.6 percentage points by the end of this fiscal year to make up for last fiscal year’s revenue collection shortfall.

www.thedailystar.net

IMF asks to raise tax-GDP ratio by 0.6 percentage points

The International Monetary Fund (IMF) has asked to increase the tax to GDP ratio by 0.6 percentage points by the end of this fiscal year to make up for last fiscal year's revenue collection shortfall.

Last fiscal year, the ratio stood at 7.3 percent.

As per conditions of an existing loan of the Washington-based lender, the ratio was supposed to be increased by 0.5 percentage points every year.

"But the IMF asked to raise the ratio…for the current fiscal year to mitigate last year's shortfall… It will definitely create an extra burden on us," said a top official of the National Board of Revenue (NBR) yesterday.

The issue was raised during a scheduled closed-door meeting between an IMF delegation and NBR officials at the tax authority's Agargaon headquarters in Dhaka.

This is the third IMF delegation arriving with the primary task of assessing the country's progress in meeting the criteria for the release of a fourth tranche of the $4.7 billion loan.

The multilateral lender approved the $4.7 billion loan in January 2023. Bangladesh has already received $2.3 billion in three tranches.

The IMF mission's discussions with the interim government of Bangladesh began on Tuesday, incorporating potential conditions for a fresh $3 billion loan. The discussions are to continue until December 17.

The delegation asked why the NBR failed to meet the IMF's revenue collection target for the previous fiscal year and sought to know about the measures taken to increase revenue collections, according to the official.

The tax authority logged overall receipts of Tk 382,562 crore in fiscal year 2023-24, falling short of its revised target by Tk 27,438 crore.

"We explained our real situation to them and informed of what we have done in recent times, including measures to increase tax return submissions," said the official.

The multilateral lender laid emphasis on revenue mobilisation, especially for the fact that Bangladesh witnessed a one percent year-on-year drop in revenue collection in the first four months of this fiscal year.

The tax authority collected Tk 101,281 crore in the July-October period, falling short of the target by Tk 30,831 crore.

The target for the entirety of fiscal year 2024-25 has been set at Tk 480,000 crore.

The NBR official further said the mission had enquired about the tax expenditures and various reform measures, including automation of the taxation system and e-return filing.

"We have been asked to reduce tax exemptions in a rational way," the official added.

The IMF team also agreed to extend their assistance for automation.

Besides, the mission also discussed the status of medium and long-term revenue collection strategies, measures to strengthen tax administration governance and plans to separate the tax administration from the tax policymaking department.​

 

[Saif]

Bangladesh sees dip in FDI inflows amid global economic uncertainty

Bangladesh witnessed a decline in Foreign Direct Investment (FDI) inflows during the fiscal year 2024, reflecting challenges posed by global economic uncertainties and domestic constraints. According to Bangladesh Bank data released on Wednesday, net FDI inflows stood at US$ 1,468.17 million in th

thefinancialexpress.com.bd

Bangladesh sees dip in FDI inflows amid global economic uncertainty
FE ONLINE REPORT
Published :
Dec 04, 2024 22:52
Updated :
Dec 04, 2024 22:52

Bangladesh witnessed a decline in Foreign Direct Investment (FDI) inflows during the fiscal year 2024, reflecting challenges posed by global economic uncertainties and domestic constraints.

According to Bangladesh Bank data released on Wednesday, net FDI inflows stood at US$ 1,468.17 million in the 2024 fiscal year, marking a decrease of $141.60 million or 8.80 per cent compared to the fiscal year 2023.

The decline highlights concerns about the investment climate as the country navigates shifting economic landscapes.

A major component of FDI, net equity capital inflows, also recorded a drop.

In the fiscal year 2024, equity inflows totalled $667.50 million, compared to $709.93 million in 2023. This represents a decline of $42.43 million, or 5.98 per cent, indicating subdued investor confidence and possibly reduced expansion plans by foreign companies.

Despite the contraction in inflows, Bangladesh's FDI stock experienced modest growth.

As of June 2024, the total FDI stock reached $17,543.08 million, an increase of 1.49 per cent over the previous year's level. This suggests that while new investments have slowed, existing foreign investments in the country remain relatively stable.

 

[Saif]

ADB, MGI sign deal to construct energy-efficient flour mill in Bangladesh

The Asian Development Bank and Tanveer Dal Mill and Flour Mills Limited, a member of the Meghna Group of Industries, have signed a $20 million-loan agreement to support construction of a greenfield state-of-the-art, energy-efficient flour milling plant in Bangladesh...

www.newagebd.net

ADB, MGI sign deal to construct energy-efficient flour mill in Bangladesh
Bangladesh Sangbad Sangstha . Dhaka 05 December, 2024, 14:05

UNB Photo

The Asian Development Bank and Tanveer Dal Mill and Flour Mills Limited, a member of the Meghna Group of Industries, have signed a $20 million-loan agreement to support construction of a greenfield state-of-the-art, energy-efficient flour milling plant in Bangladesh.

This new facility will double MGI’s wheat flour output and enable the production of quality wheat products while consuming 37 per cent less electricity than existing plants.

The improved energy efficiency is expected to lower operational costs and reduce carbon dioxide emissions by approximately 8,200 tonnes annually.

The plant will produce 6,60,000 tonnes of wheat, contributing to domestic agriculture production and enhancing food security, said an ADB press release on Thursday.

‘This project marks a significant step toward the advancement of sustainable industrial development in Bangladesh. By promoting energy-efficient technologies and improving product quality, ADB and MGI are directly contributing to the country’s food security, food safety, economic resilience and environmental sustainability,’ said ADB director general for private sector operations Suzanne Gaboury.

‘Furthermore, the project is aligned with the Government of Bangladesh’s goals of strengthening domestic agro-processing and reducing the energy intensity of key industries,’ added Suzanne.

The demand for wheat in Bangladesh has been steadily increasing, but domestic production has not kept pace. In 2022, the country consumed about 8.8 million tonnes of wheat, while local production exceeded only one million tons.

This reliance on imported wheat highlights the urgent need to expand domestic milling capacity. With the anticipated rise in demand for flour milling, investing in energy-efficient technologies will foster environmentally sustainable growth in this sector.

‘The project will ensure food security, create additional employment opportunities for 160 individuals, foster relationships with 1,50,000 vendors in the SME sector, support market creation and industrialization, and more importantly, contribute sustainable GDP growth in the Bangladesh economy,’ said MGI’s chairman and managing director Mostafa Kamal.

‘We are enthusiastic about working with ADB and this project demonstrates the group’s commitment to due diligence and compliance,’ added Kamal.​

 

[Saif]

Govt must improve law and order fast

Improving law and order has become imperative in recovering Bangladesh’s global image that took a beating for domestic politics over the past decade, said a top chamber leader.

www.thedailystar.net

Govt must improve law and order fast
Says president of AmCham

Syed Ershad Ahmed

Improving law and order has become imperative in recovering Bangladesh's global image that took a beating for domestic politics over the past decade, said a top chamber leader.

"Due to political instability and corruption, there has been significant damage to Bangladesh's reputation globally -- we need to work on rebuilding trust with international partners," Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh, told The Daily Star in an interview recently.

Factors such as law and order and political instability discourage foreign investors.

To attract foreign direct investment, demonstrable evidence of an improving business climate and transparent governance needs to be presented, he said.

Ahmed's observation comes at a time when Bangladesh's net FDI was found to have been overstated by $5.7 billion between fiscal years 2019-20 and 2022-23.

In the four fiscal years, Bangladesh actually received $5.86 billion as net FDI, a disappointing amount given the seeming political stability and stellar economic growth in those years.

Ahmed termed the last 10 years of the previous Awami League government "very pathetic".

"What I think is that our institutions were severely damaged in those years."

Institutions like the Public Service Commission and the Election Commission and the regulatory agencies such as the National Board of Revenue (NBR), the Bangladesh Bank (BB) and the police were compromised.

"This led to widespread disorder in the country and everything became politicised."

The previous AL regime saw widespread corruption and money laundering.

"The Anti-Corruption Commission and the Bangladesh Bank were supposed to foil those but they did not do their job."

Even the agencies meant to support businesses such as the port were not spared from politicisation, which, ultimately, weakened the business environment, and the business ecosystem suffered.

"If the ACC is not truly independent and effective, corruption will continue unchecked. Similarly, our Public Service Commission needs to ensure a fair recruitment process free from political influence. Only then we can build the foundation for sustainable economic growth."

Institutional reform is key, said Ahmed, country manager and managing director of Expeditors (Bangladesh), a global logistics company.

"We need strong, independent institutions that aren't swayed by political pressure or financial incentives. Without strong institutions, our business environment will continue to suffer," he said, while lauding the interim government's reform initiatives.

And all the institutions should be led by strong, impartial individuals who are not money-minded.

"Only then can we create a truly democratic atmosphere. The challenges we are facing, like cronyism and the politicisation of business organisations, are deep-rooted. And these issues won't just go away without structural changes."

Bangladesh's politicians practised the wrong sort of politics all these years, according to Ahmed.

They were supposed to pick politicians as leaders. Instead, they invited businesspeople to politics and made them ministers.

For instance, in January, two-thirds of the lawmakers elected in the 12th parliamentary election were business people, according to Shushasoner Jonno Nagorik, a non-government organisation.

"So, we made a big mistake here. Because politicians are supposed to be individuals who are connected with the people, those who have the tendency to sacrifice for people. What we saw was that those who became councillors were engaged in business also."

Parties should pick those people as leaders who have the mentality to serve the people and do not have the mentality to expand their wealth.

While businesspeople have the right to engage in politics, they should distance themselves from businesses when they become active in politics.

"When you are a politician, your focus should be on politics. But if you are involved in politics and business, there will be no benefit."

He cited the case of the US where successful businesspeople who join politics step aside from their businesses. They leave the businesses to the top management of their firms.

"Here, in our country, you will find that the politicians remain involved in their business directly. This should not be."

Some businesspeople had political aspirations, and they joined politics after becoming leaders of trade bodies such as the Federation of Bangladesh Chambers of Commerce and Industry.

"This is a regret for us. Had the trade bodies worked in favour of businesses, then our business environment would not have deteriorated so much."​

 

[Saif]

Is Motijheel losing its glory as commercial hub?

Motijheel, once the pulsing heart of Dhaka’s trade and commerce, has become a shadow of its former self. Empty office floors now whisper tales of abandoned ambitions.

www.thedailystar.net

Is Motijheel losing its glory as commercial hub?

Motijheel, once the pulsing heart of Dhaka's trade and commerce, has become a shadow of its former self. Empty office floors now whisper tales of abandoned ambitions.

For example, take the Ittefaq Mor-Dilkusha-Naya Paltan stretch. The two-kilometre patch has some 40 commercial buildings standing by one side of the road. Around 22 of them now have "to-let" signs dangling.

Their yearslong wait for tenants speaks of a commercial exodus that has drained the lifeblood from what was once Dhaka's most vibrant business hub.

Most buildings have not found tenants since the previous occupants left in the past five years. Besides, existing businesses, banks and non-bank financial institutions (NBFIs) are moving to Gulshan, Banani or Baridhara.

New businesses are also hesitant to assume a business address in the old town area.

Take Adamjee Court Annex Building-2, located next to Motijheel park, as another example.

Once a busy 12-story building rented by a bank, it was full of people and activity.

After the Covid-19 pandemic hit in 2020, the bank began to relocate its head office to Gulshan area in phases. Now, most floors in the building remain empty, leaving it gloomy even in daylight.

The scene is similar at the DSE Annex Building, roughly a 15-minute walk from Adamjee Court building. During a visit there recently, the 11-story structure was found eerily quiet at 1:00 PM, with only two or three people in the elevator.

This was beyond anyone's wildest imagination just a few years ago.

In the 2010s, when the building was full of stock brokerage firms, people had to queue just to enter the elevator. All the main activities of the Dhaka Stock Exchange (DSE) were also handled inside the building from 1959 until 2019.

Consequently, it was one of the busiest buildings in the area during trading hours. But now it is deserted in the middle of the day.

After the DSE relocated its office to its own building in Nikunja, thousands of square feet of space have remained vacant in the commercial structure.

Two brokerage houses and an insurance company have posted relocation signs, stating that they are also departing for greener pastures.

A similar sight was found at the Jibon Bima Tower in Dilkusha, where the Bangladesh Securities and Exchange Commission (BSEC) rented space for its office since the 1990s.

Two floors, each boasting 6,200 square feet, now remain vacant in the building after the BSEC shifted to its own building in Sher-e-Bangla Nagar in 2017.

Banks, whose headquarters once dominated Motijheel, earning it the status as the capital's downtown area, have mostly relocated to Gulshan.

A number of building owners in Motijheel said they are not getting commercial tenants despite offering comparatively lower rents.

Md Delwar Hossain, the owner of a building in Dilkusha, said he has been searching for tenants for four years as one floor remains vacant.

This area was highly sought-after in the 90s, with commercial spaces fetching the highest rents across all of Dhaka. But few people now call him to inquire about the floor.

"While the building itself is now old-fashioned, there are many vacant spaces that are not that old. The problem is that large conglomerates, banks, NBFIs and new-generation corporations are not coming to this area," Hossain said.

Most businesses were concentrated in Motijheel due to easy communication and proximity to public offices, he added.

Officials at Sadharan Bima Corporation, which has several buildings in Motijheel, said they have thousands of square feet of vacant spaces across their properties.

According to them, although vacant commercial floors have been a common sight in Motijheel for years, rents have not reduced. However, the increase in rent is slower than in other areas.

The average rent per square foot in this area ranges from Tk 60 to Tk 90, depending on location and amenities.

This is still lower than the rent one would expect to pay in newer commercial hubs like Gulshan and Banani.

According to bdproperty.com, a website for renting and selling real estate, the average rent in Gulshan range from Tk 180 to Tk 250 per square foot. In Banani, it ranges from Tk 70 to Tk 150.

Alongside the shift in commercial offices, cinemas in the area are also suffering.

Modhumita Cinema Hall, located on Toynbee Road, was once a top-rated movie theatre. But now it opens irregularly amid a dearth of visitors.

The situation is even worse for Ovishar Cinema Hall, which has been closed since the pandemic.

Md Liton, owner of Ovishar Store located next to the cinema hall, said he started his shop in the 1990s. Back then, he and his three brothers used to sell snacks.

The area surrounding the cinema hall was once swarming with people, who gathered to watch movies. As the cinema business declined, his three brothers left the store in search of other jobs.

Liton said that people once bought cinema tickets from the black market at prices three times higher than the official rate. Now, the hall building has become a ghost palace, having been closed for years. People now flock to the multiplexes in large shopping malls to enjoy movies.

Motahar Hossain Masum, who grew up near the Old Dhaka area and visits Motijheel frequently, said although banks have relocated their offices, several top food sellers remain and continue to attract a large number of people.

The self-professed gourmand shared some insights into the cuisine scene.

Established in 1958, Deshbandhu Hotel continues to serve food that evokes nostalgia for many.

Other popular hotels in the area include Ghoroa and Hirajheel. These hotels welcome a large number of diners daily.

In the 1980s, when the Bangladesh Chemical Industries Corporation (BCIC) building was constructed, its cafeteria attracted white-collar officials with its upscale design and quality food, Masum said.

Purbani Hotel also has a long history of attracting white-collar people, he added.

Motijheel's transformation into a different place at night is striking.

As people rush home after work, the area becomes eerily quiet. On weekends and public holidays, the streets in Motijheel host cricket, football, or badminton for children.​

 

[Saif]

Wahiduddin believes Bangladesh to get political govt next year

The planning and education adviser Wahiduddin Mahmud on Saturday expressed hope that Bangladesh would see an elected government next year.

www.newagebd.net

Bangladesh to see political shift next year amid challenges: Wahiduddin Mahmud
United News of Bangladesh . Dhaka 07 December, 2024, 12:27

Wahiduddin Mahmud | UNB photo

Bangladesh is set to witness a political shift next year, says planning and finance adviser Wahiduddin Mahmud.

Speaking at the opening session of the Annual Baltic Conference on Defence (ABCD) conference at a hotel in the capital on Saturday, organised by the Bangladesh Institute of Development Studies (BIDS), he hinted at significant political developments while underlining the nation’s critical economic challenges.

Mahmud, however, pointed out that income inequality remains one of the country’s most pressing concerns. 'To tackle this disparity, quality education is paramount, an area where Bangladesh still has a long way to go.' He said.

As Bangladesh transitions from its status as a Least Developed Country (LDC), Mahmud referred to the ongoing efforts to retain some benefits associated with the LDC status.

'We no longer have the option of remaining an LDC. Discussions to sustain certain privileges from developed nations are ongoing, with positive responses from many,' the adviser said.

In a separate session, Indermit S Gill, Chief Economist at the World Bank, provided insights into how Bangladesh could escape the middle-income trap.

Investment and job creation should be the focal points, he stated, urging the country to foster entrepreneurship and expand the use of technology.​

 

[Saif]

Prioritise enhancing business environment

Improve law and order, rebuild trust with international partners

www.thedailystar.net

Prioritise enhancing business environment
Improve law and order, rebuild trust with international partners

Bangladesh's economy is at a critical juncture due to widespread corruption, financial irregularities, and the politicisation of public institutions by the previous Awami League regime. Since the interim government took charge following the fall of the AL on August 5, it has been attempting to restore some stability in the financial and business sectors. However, the efforts being made are not sufficient compared to the damage inflicted on the business environment by ongoing political instability and law and order situation not being fully restored. According to Syed Ershad Ahmed, president of the American Chamber of Commerce in Bangladesh, it is imperative to improve the law and order situation in the country to recover Bangladesh's global image, which was significantly tarnished during the AL's rule. The government must also urgently address issues like political stability and corruption to rebuild the trust of international partners.

Although exports and remittances have increased over the past four months, the ongoing macroeconomic instability, high inflation, and political unrest continue to threaten economic growth and recovery. According to a recently presented government-commissioned white paper on the economy, $234 billion were siphoned out of Bangladesh between 2009 and 2023, during the AL's tenure. Economic growth has also been overstated since 1995, with the practice of inflating estimates more after the fiscal year 2012-13. Additionally, Bangladesh's net FDI was found to have been overstated by $5.7 billion between the fiscal years 2019-20 and 2022-23. These issues have significantly dampened our economic prospects, which now requires well-thought-out strategies and plans to recover.

During the reign of the AL, public institutions such as the Bangladesh Bank, the National Board of Revenue, the Election Commission, and the police were heavily politicised. This widespread politicisation has significantly affected the business climate. Moreover, as more businesspeople entered politics, they prioritised their business interests over political commitments, further politicising public institutions for personal gain. For example, according to Shushasoner Jonno Nagorik, two-thirds of the lawmakers elected in January's 12th parliamentary election were businesspeople.

Against this backdrop, the interim government must focus on bringing buyers and investors back to the country by addressing the ongoing political uncertainty and relatively fragile law and order situation. It must implement significant reforms in state institutions to rebuild trust with international partners. Furthermore, it should encourage the creation of new businesses to attract both foreign and local investors. Since business and commerce depends on political stability and the overall situation in relation to law and order, the challenges faced by businesspeople in these regards must be urgently addressed.​

 

[Saif]

Deferring LDC graduation not an option

Education and Planning Adviser Wahiduddin Mahmud said Bangladesh has no option to defer its graduation from the least developed country (LDC) club.

www.thedailystar.net

Deferring LDC graduation not an option
Education and Planning Adviser Wahiduddin Mahmud says

Planning Adviser Wahiduddin Mahmud speaks at the inaugural session of a four-day “Annual BIDS Conference on Development 2024” in Dhaka yesterday. Photo: star

Education and Planning Adviser Wahiduddin Mahmud said Bangladesh has no option to defer its graduation from the least developed country (LDC) club.

"Even if we want to, we may not be able to remain in the group of LDCs. Many people don't know that," he said.

The eminent economist made the remarks yesterday in Dhaka at a four-day conference organised by the Bangladesh Institute of Development Studies (BIDS).

As per the United Nations schedule, Bangladesh is set to graduate from the LDC status in November 2026.

However, owing to the economic crisis that has been prevalent for nearly two years, the issue of deferring graduation has been coming to the spotlight in recent months, particularly by local businesses.

With the economy in a fragile state due to the fallouts of global inflationary pressure, the Covid-19 pandemic, the Russia-Ukraine war as well as political turmoil and energy shocks on the domestic front, a section of exporters has been putting pressure on the government to shelve any graduation plans.

Although there is a lot of money in the balance sheets of some big industrial companies, it does not exist in reality. Workers have to be paid. But where will the money come from?— Wahiduddin Mahmud Education and planning adviser.

According to a UN report, trade preferences accorded to Bangladesh as an LDC have played a crucial role in the development of its economy and achievements in trade and social sectors. The loss of these benefits following graduation is expected to dent a lot of businesses by costing the country its trade competitiveness, especially if it fails to secure bilateral agreements with major export destinations.

In November, Finance Adviser Salehuddin Ahmed told the media that they are yet to make a decision on the scheduled graduation.

The United Nations Committee for Development Policy (CDP) reviews the LDC category every three years, assessing the progress of countries across three criteria, namely income, human assets, and vulnerability.

Based on these reviews, the CDP recommends which countries should be classified as LDCs to the United Nations Economic and Social Council (ECOSOC). The final decision is made by the UN General Assembly.

To graduate, a country must meet the threshold for two of the three criteria in two consecutive reviews.

"We have already qualified twice," Prof Mahmud said, referring to the previous reviews in 2018 and 2021.

If any country files a petition to the CDP's hearing committee saying that they are unable to graduate or asking to stay in the group of LDCs, it is considered degrading, he added.

"The Maldives and some tiny island nations applied for it, but it was unsuccessful."

When a country qualifies, it graduates automatically, the adviser explained.

"We need to continue discussions on unilateral concessions with different nations. Japan, Canada and the European Union can be favourable options," he added.

He also underscored the need for export diversification and economic diplomacy to negotiate in the global market.

Earlier, members of a panel that recently prepared a white paper on the state of the economy also advised the government not to defer graduation.

"Based on the committee's assessment of data and information, Bangladesh meets the requirements for LDC graduation despite the challenging economic situation," Debapriya Bhattacharya, who led the panel, said last week.

"So, we don't see any reason to hold back the graduation process."

In its report, the white paper committee said recent concerns about inflated economic indicators under the previous Awami League government would have little relevance in the case of LDC graduation.

The UN bodies will only revisit their calculations when a revised data set, including gross national income estimates, is available from government sources.

"Notwithstanding the reservations expressed by certain exporters' groups, there is hardly any plausible reason, as of now, for Bangladesh to request a deferment of the exit date from the LDC group," it said.

"Under these circumstances, Bangladesh will be well advised to pursue a substantive and effective LDC graduation strategy. This will require putting forward a transition plan to counteract the negative fallouts of Bangladesh's graduation out of the LDC group and enable the required structural transformation of the economy."

The white paper added that postposing graduation will invite political backlash.

According to a triennial review by the CDP in February this year, the current situation remains comfortable despite recent economic and political challenges.

Even the dampened economic performance during the current fiscal year is not expected to bring the country below the stipulated thresholds, it said.

Illusory wealth in big industry balance sheets

Speaking of how Bangladesh can build an egalitarian society after a mass uprising toppled the Sheikh Hasina regime on August 5, Mahmud said that the interim government is facing a huge shortage of resources.

This has made it difficult to increase investment in education, health and human resource development.

"A lot of money has been smuggled out of the country. People's money is in the banks, but the money has gone out," he said.

Although there is a lot of money in the balance sheets of some big industrial companies, it does not exist in reality, he said, mentioning the example of Beximco.

"Workers have to be paid. But where will the money come from?" he asked.

It is difficult to build an egalitarian society when contending with such realities.

"Now it has become a moral issue whether to buy dialysis machines or invest in public health," he said, adding that even seasoned economists and philosophers like Amartya Sen and John Rawls may not be able to come up with a solution for such a moral dilemma.

Indermit S Gill, the chief economist of the World Bank Group, said during a presentation at the event that middle-income countries, which are home to 6 billion people, were caught in a race against time.

"The external environment is making things harder, not easier. To escape the middle-income trap, countries need to undergo two transitions, not one. The transitions are between investment, infusion and innovation.

"To grow quickly, they have to discipline incumbents, reward merit, and capitalise on crises," Indermit said.

Binayak Sen, director general of the BIDS, delivered the opening remarks.

A total of 30 papers, two keynote addresses and 12 public lectures from Bangladesh and abroad will be presented and delivered at the conference, said Sen.​