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Review of the White Paper on Bangladesh economy
Injustice anywhere is a threat to justice everywhere." - Martin Luther King Jr. The publication of the White Paper on Bangladesh’s economy, revealing widespread corruption under the Awami League-led regime, stands as a defining moment for accountability and a catalyst for future eco
Review of the White Paper on Bangladesh economy
Serajul I. Bhuiyan
Published :
Dec 23, 2024 21:32
Updated :
Dec 23, 2024 21:32
Injustice anywhere is a threat to justice everywhere."
- Martin Luther King Jr.
The publication of the White Paper on Bangladesh’s economy, revealing widespread corruption under the Awami League-led regime, stands as a defining moment for accountability and a catalyst for future economic reforms. Unveiled on December 1, 2024, by economist Dr. Debapriya Bhattacharya and his 12-member committee, the report exposes deep-rooted financial mismanagement, extensive money laundering, and pervasive corruption across critical sectors. The revelations underscore the economic injustices that have fueled Bangladesh’s financial instability and call for decisive corrective action.
Dr. Bhattacharya described that the deep-rooted corruption resulted in a culture of Chortantra, an institutionalised theft, whereby it was deeply ingrained within fraudulent practices that shook the innermost core of Bangladesh’s economy. By highlighting these chronic issues, the White Paper calls for urgent reform and draws thought-provoking parallels with global corruption cases. This article examines the critical points from the White Paper, detailing historical patterns and strategies for the road to economic recovery in ways that could reshape the future of Bangladesh.
A CASE OF DEEP-SEATED CORRUPTION
Systemic money laundering: The report estimates that as much as $16 billion was siphoned off annually through money laundering during the AL regime. This amounts to over $240 billion in 15 years, a staggering figure that dwarfs the country’s total development budget.
According to Dr. Bhattacharya, the diversions of public money in the form of hundis and foreign accounts became all-pervasive among the recruiting agencies, bureaucrats, and influential business groups. As he said, “The scale of misappropriation was way beyond what we had anticipated.
The White Paper also criticises the distorted economic data presented by the past regime, which had duped the domestic and international stakeholders. International organisations and foreign donors have been blamed for accepting inflated economic projections with minimum due diligence.
Banking sector— loss of credibility: The report termed the banking sector as the “most corruption-ravaged” segment of the economy. Ten banks, including state-owned and Shariah-based private ones, were found “technically bankrupt.” Politically motivated loans, inflated project costs, and deliberate NPL write-offs resulted in distressed assets of Tk 675,000 crore ($62 billion).
Former U.S. Federal Reserve Chairman Paul Volcker’s warning finds relevance here: “The single greatest threat to our economic system is the failure of financial institutions due to unchecked corruption and mismanagement.”
Public Sector Scams and Mismanagement: The report found project costs inflated by more than Tk 195,000 crore ($17 billion) through land procurement scams, manipulated bidding, and procurement fraud in 29 major development projects reviewed. Infrastructure projects that were supposed to become the symbols of national progress turned out to be symbols of unbridled corruption.
Power and energy— projects driven by greed: The power sector was another hotbed of financial malpractices, attracting an estimated $30 billion investments; at least $3 billion in illicit transactions in energy projects is estimated to have been lost. Politically connected businesses got hold of lucrative contracts while sidelining capable entrepreneurs.
Tax evasion and elite privilege: The report cited widespread exemptions in taxation amounting to 6 per cent of GDP, which kept the government away from the much-needed revenue. This figure could have doubled the education budget and tripled the health budget. Tax concessions were often given to businesses with political connections, further deepening income inequality.
HISTORICAL COMPARISONS
Corruption on a Global Scale: Corruption scandals from countries like Nigeria, Venezuela, and Malaysia are testaments to the potential impact that financial mismanagement and unaccountable power can have on the devastation of a national economy. These examples offer salient lessons for Bangladesh as it grapples with the own revelations of systemic corruption outlined in the White Paper.
Nigeria’s oil scandal: The Looting of a Nation: During the 1990s, Nigeria went through one of the most notorious single cases of state-level corruption, amounting to about US$16 billion siphoned off from oil revenues. Senior government officials, military generals, and political elites manipulated oil export contracts and siphoned proceeds into offshore bank accounts. International investigations led to the seizure of millions in assets, while pressure from the international community compelled Nigeria’s government to firm up its anti-corruption framework.
Punitive Measures:
The Nigerian government established the Economic and Financial Crimes Commission (EFCC), which secured convictions against numerous high-profile politicians and military leaders.
International banks froze accounts linked to Nigerian officials, leading to the recovery of significant stolen assets.
Lesson for Bangladesh: Bangladesh needs to empower the anti-corruption agencies by enforcing asset recovery agreements along with strengthening financial oversight for preventing large-scale misappropriations of state funds. As pointed out by former UN Secretary-General Kofi Annan, “Good governance is perhaps the single most important factor in eradicating poverty and promoting development.”
Venezuela’s PDVSA crisis: A Nation’s Collapse: Venezuela’s state-owned oil company, PDVSA, became a symbol of how a resource-rich nation could be brought to its knees by political mismanagement and endemic corruption. Billions had been embezzled through inflated contracts, fake invoices, and kickback schemes. Lack of reinvestment of oil profits into public services by the government resulted in hyperinflation, food shortages, and mass migration.
Punitive Measures:
U.S. and European authorities launched money-laundering investigations, leading to asset freezes and criminal charges against top Venezuelan officials.
International sanctions targeted Venezuela’s oil industry, crippling its export potential but failing to reform domestic governance.
Lesson for Bangladesh: Bangladesh needs to ensure transparent bidding for public contracts, develop independent audit bodies, and depoliticise state-owned enterprises if it wants to avoid the same fate. As Margarita López Maya, a Venezuelan historian, says, “Corruption is not just a failure of ethics; it is the engine of institutional decay.”
Malaysia’s 1MDB scandal: Global Financial Shockwaves: The 1MDB (1Malaysia Development Berhad) scandal exposed a web of financial corruption involving former Prime Minister Najib Razak. An estimated $4.5 billion was misappropriated through complex money-laundering schemes spanning multiple countries. Luxury real estate purchases, super yachts, and extravagant art acquisitions were linked to embezzled funds.
Punitive measures:
Najib Razak was arrested, convicted on multiple charges of corruption, and sentenced to 12 years in prison.
International cooperation led to asset seizures worth over $1 billion, including jewelry, artwork, and yachts.
Global financial institutions faced fines for failing to flag suspicious transactions related to 1MDB.
Lesson for Bangladesh: Bangladesh should enhance its cooperation with international financial watchdogs like the Financial Action Task Force (FATF) and strengthen its banking regulations to prevent money laundering. As former U.S. President Theodore Roosevelt warned, “No man is above the law, and no man is below it.” Effective law enforcement and judicial independence remain critical to combating corruption.
Final reflections: These lessons from Nigeria, Venezuela, and Malaysia, show how unbridled corruption can destabilise a nation, make its citizens poor, and tarnish international reputation. The messages going forward to Bangladesh are very clear: combat corruption with transparent governance, enforce strict financial policing, and judicial accountability. As the late former President of South Africa Nelson Mandela aptly puts it, “It is not beyond our power to create a world in which all children have access to a good education. Those who do not prevent corruption rob the future.”
IMPACT ON BANGLADESH’S ECONOMIC FUTURE
The White Paper paints a bleak picture of Bangladesh’s economy but also provides a roadmap for recovery. Key recommendations include:
Institutional reforms: Strengthen institutions like the Anti-Corruption Commission (ACC), ensuring they operate independently.
Judicial accountability: Enforce legal action against corrupt officials and business figures involved in financial crimes. No reform will succeed without holding individuals accountable.
Banking sector overhaul: Implement tighter regulations on financial institutions, create an independent banking commission, and end politically driven lending.
Transparent governance: Introduce real-time financial monitoring systems for government-funded projects. Ensure transparency through parliamentary oversight.
5.Economic diversification: Go beyond capital-intensive mega-projects and invest in small and medium enterprises, sustainable industries, and technology-driven development.
A DEFINING MOMENT FOR BANGLADESH
The White Paper shows how the immense possibility of the economy has been consistently undermined by systemic corruption, political favouritism, and institutional breakdowns. In this regard, the White Paper provides an opportunity for reform. As Dr Bhattacharya reiterated, “We must use this crisis as a wake-up call, not just for accountability, but to reshape our national future.”
By embracing accountability, transparency, and institutional reforms, Bangladesh can rewrite its economic story. If the interim government under Dr. Muhammad Yunus can implement the White Paper’s recommendations, it could transform Bangladesh from a state plagued by economic mismanagement to a nation defined by equitable growth and democratic accountability.
Dr. Serajul I. Bhuiyan, Professor and Former Chair, Department of Journalism and Mass Communications, Savannah State University, Georgia, USA.
Serajul I. Bhuiyan
Published :
Dec 23, 2024 21:32
Updated :
Dec 23, 2024 21:32
Injustice anywhere is a threat to justice everywhere."
- Martin Luther King Jr.
The publication of the White Paper on Bangladesh’s economy, revealing widespread corruption under the Awami League-led regime, stands as a defining moment for accountability and a catalyst for future economic reforms. Unveiled on December 1, 2024, by economist Dr. Debapriya Bhattacharya and his 12-member committee, the report exposes deep-rooted financial mismanagement, extensive money laundering, and pervasive corruption across critical sectors. The revelations underscore the economic injustices that have fueled Bangladesh’s financial instability and call for decisive corrective action.
Dr. Bhattacharya described that the deep-rooted corruption resulted in a culture of Chortantra, an institutionalised theft, whereby it was deeply ingrained within fraudulent practices that shook the innermost core of Bangladesh’s economy. By highlighting these chronic issues, the White Paper calls for urgent reform and draws thought-provoking parallels with global corruption cases. This article examines the critical points from the White Paper, detailing historical patterns and strategies for the road to economic recovery in ways that could reshape the future of Bangladesh.
A CASE OF DEEP-SEATED CORRUPTION
Systemic money laundering: The report estimates that as much as $16 billion was siphoned off annually through money laundering during the AL regime. This amounts to over $240 billion in 15 years, a staggering figure that dwarfs the country’s total development budget.
According to Dr. Bhattacharya, the diversions of public money in the form of hundis and foreign accounts became all-pervasive among the recruiting agencies, bureaucrats, and influential business groups. As he said, “The scale of misappropriation was way beyond what we had anticipated.
The White Paper also criticises the distorted economic data presented by the past regime, which had duped the domestic and international stakeholders. International organisations and foreign donors have been blamed for accepting inflated economic projections with minimum due diligence.
Banking sector— loss of credibility: The report termed the banking sector as the “most corruption-ravaged” segment of the economy. Ten banks, including state-owned and Shariah-based private ones, were found “technically bankrupt.” Politically motivated loans, inflated project costs, and deliberate NPL write-offs resulted in distressed assets of Tk 675,000 crore ($62 billion).
Former U.S. Federal Reserve Chairman Paul Volcker’s warning finds relevance here: “The single greatest threat to our economic system is the failure of financial institutions due to unchecked corruption and mismanagement.”
Public Sector Scams and Mismanagement: The report found project costs inflated by more than Tk 195,000 crore ($17 billion) through land procurement scams, manipulated bidding, and procurement fraud in 29 major development projects reviewed. Infrastructure projects that were supposed to become the symbols of national progress turned out to be symbols of unbridled corruption.
Power and energy— projects driven by greed: The power sector was another hotbed of financial malpractices, attracting an estimated $30 billion investments; at least $3 billion in illicit transactions in energy projects is estimated to have been lost. Politically connected businesses got hold of lucrative contracts while sidelining capable entrepreneurs.
Tax evasion and elite privilege: The report cited widespread exemptions in taxation amounting to 6 per cent of GDP, which kept the government away from the much-needed revenue. This figure could have doubled the education budget and tripled the health budget. Tax concessions were often given to businesses with political connections, further deepening income inequality.
HISTORICAL COMPARISONS
Corruption on a Global Scale: Corruption scandals from countries like Nigeria, Venezuela, and Malaysia are testaments to the potential impact that financial mismanagement and unaccountable power can have on the devastation of a national economy. These examples offer salient lessons for Bangladesh as it grapples with the own revelations of systemic corruption outlined in the White Paper.
Nigeria’s oil scandal: The Looting of a Nation: During the 1990s, Nigeria went through one of the most notorious single cases of state-level corruption, amounting to about US$16 billion siphoned off from oil revenues. Senior government officials, military generals, and political elites manipulated oil export contracts and siphoned proceeds into offshore bank accounts. International investigations led to the seizure of millions in assets, while pressure from the international community compelled Nigeria’s government to firm up its anti-corruption framework.
Punitive Measures:
The Nigerian government established the Economic and Financial Crimes Commission (EFCC), which secured convictions against numerous high-profile politicians and military leaders.
International banks froze accounts linked to Nigerian officials, leading to the recovery of significant stolen assets.
Lesson for Bangladesh: Bangladesh needs to empower the anti-corruption agencies by enforcing asset recovery agreements along with strengthening financial oversight for preventing large-scale misappropriations of state funds. As pointed out by former UN Secretary-General Kofi Annan, “Good governance is perhaps the single most important factor in eradicating poverty and promoting development.”
Venezuela’s PDVSA crisis: A Nation’s Collapse: Venezuela’s state-owned oil company, PDVSA, became a symbol of how a resource-rich nation could be brought to its knees by political mismanagement and endemic corruption. Billions had been embezzled through inflated contracts, fake invoices, and kickback schemes. Lack of reinvestment of oil profits into public services by the government resulted in hyperinflation, food shortages, and mass migration.
Punitive Measures:
U.S. and European authorities launched money-laundering investigations, leading to asset freezes and criminal charges against top Venezuelan officials.
International sanctions targeted Venezuela’s oil industry, crippling its export potential but failing to reform domestic governance.
Lesson for Bangladesh: Bangladesh needs to ensure transparent bidding for public contracts, develop independent audit bodies, and depoliticise state-owned enterprises if it wants to avoid the same fate. As Margarita López Maya, a Venezuelan historian, says, “Corruption is not just a failure of ethics; it is the engine of institutional decay.”
Malaysia’s 1MDB scandal: Global Financial Shockwaves: The 1MDB (1Malaysia Development Berhad) scandal exposed a web of financial corruption involving former Prime Minister Najib Razak. An estimated $4.5 billion was misappropriated through complex money-laundering schemes spanning multiple countries. Luxury real estate purchases, super yachts, and extravagant art acquisitions were linked to embezzled funds.
Punitive measures:
Najib Razak was arrested, convicted on multiple charges of corruption, and sentenced to 12 years in prison.
International cooperation led to asset seizures worth over $1 billion, including jewelry, artwork, and yachts.
Global financial institutions faced fines for failing to flag suspicious transactions related to 1MDB.
Lesson for Bangladesh: Bangladesh should enhance its cooperation with international financial watchdogs like the Financial Action Task Force (FATF) and strengthen its banking regulations to prevent money laundering. As former U.S. President Theodore Roosevelt warned, “No man is above the law, and no man is below it.” Effective law enforcement and judicial independence remain critical to combating corruption.
Final reflections: These lessons from Nigeria, Venezuela, and Malaysia, show how unbridled corruption can destabilise a nation, make its citizens poor, and tarnish international reputation. The messages going forward to Bangladesh are very clear: combat corruption with transparent governance, enforce strict financial policing, and judicial accountability. As the late former President of South Africa Nelson Mandela aptly puts it, “It is not beyond our power to create a world in which all children have access to a good education. Those who do not prevent corruption rob the future.”
IMPACT ON BANGLADESH’S ECONOMIC FUTURE
The White Paper paints a bleak picture of Bangladesh’s economy but also provides a roadmap for recovery. Key recommendations include:
Institutional reforms: Strengthen institutions like the Anti-Corruption Commission (ACC), ensuring they operate independently.
Judicial accountability: Enforce legal action against corrupt officials and business figures involved in financial crimes. No reform will succeed without holding individuals accountable.
Banking sector overhaul: Implement tighter regulations on financial institutions, create an independent banking commission, and end politically driven lending.
Transparent governance: Introduce real-time financial monitoring systems for government-funded projects. Ensure transparency through parliamentary oversight.
5.Economic diversification: Go beyond capital-intensive mega-projects and invest in small and medium enterprises, sustainable industries, and technology-driven development.
A DEFINING MOMENT FOR BANGLADESH
The White Paper shows how the immense possibility of the economy has been consistently undermined by systemic corruption, political favouritism, and institutional breakdowns. In this regard, the White Paper provides an opportunity for reform. As Dr Bhattacharya reiterated, “We must use this crisis as a wake-up call, not just for accountability, but to reshape our national future.”
By embracing accountability, transparency, and institutional reforms, Bangladesh can rewrite its economic story. If the interim government under Dr. Muhammad Yunus can implement the White Paper’s recommendations, it could transform Bangladesh from a state plagued by economic mismanagement to a nation defined by equitable growth and democratic accountability.
Dr. Serajul I. Bhuiyan, Professor and Former Chair, Department of Journalism and Mass Communications, Savannah State University, Georgia, USA.
