[🇧🇩] Monitoring Bangladesh's Economy

[Saif]

For Bangladesh, this means the following:

Fighting Corruption. A credible anti-corruption drive is indispensable. But beyond symbolic gestures, anti-corruption efforts must focus on recovering lost revenues from systemic evasion by powerful business interests. Holding unscrupulous businesspeople accountable for unpaid taxes and illicit wealth transfers could yield a substantial fiscal dividend, potentially more significant than what could be gained by broadening the tax base among low-income earners. Targeted audits, forensic investigations, and enforcement of tax laws on high-net-worth individuals and politically connected firms should be top priorities.

Broadening the Formal Economy. Encouraging formalisation through digital payments, simplified registration, and incentives for SMEs can expand the tax base. Policymakers might consider Vietnam’s experience, which has made notable progress in formalizing its SME sector over the past two decades, beginning with the 2005 Enterprise Law. This progress was achieved through a combination of legal reforms, administrative simplification, financial incentives, and the use of digital tools.

Reforming Tax Expenditures. Rationalising exemptions and incentives that benefit the wealthy disproportionately. Consider replacing blanket corporate incentives with performance-linked tax credits tied to job creation or export diversification. Review and gradually phase out ineffective tax holidays for special economic zones.

Improving Public Spending. Tax compliance will only improve when citizens see visible benefits from their contributions, such as clean water, reliable roads, and quality schools. Consider implementing pilot participatory budgeting in municipalities, enabling citizens to help prioritize local spending on schools, roads, and clinics, as pioneered in Brazil. Additionally, the government might consider launching infrastructure tracking dashboards that show the real-time progress of public projects funded by tax revenue, similar to India’s Gati Shakti portal. Scaling back or canceling mega projects and redirecting funds to health and education could also be beneficial.

Enhancing Transparency. Publish regular tax data, enforcement outcomes, and the use of revenue in public dashboards. Establish an open-access public finance portal that displays tax collections by sector and budget allocations by the ministry, modeled on the US government’s “USAspending.gov.” Establish a public grievance redressal mechanism that allows citizens to report harassment or corruption anonymously, with mandatory follow-up and accountability measures in place.

Conclusion: Bangladesh’s low tax-to-GDP ratio is not the disease—it is a symptom of a deeper malaise. Fixating on this metric without addressing the underlying rot of corruption, elite capture, inequality, and institutional mistrust will lead nowhere. Taxation is not simply a technical policy instrument—it is a moral contract between citizen and state. And right now, that contract is broken.

What Bangladesh needs is not another donor-mandated revenue target, but a comprehensive political and institutional overhaul that restores public confidence, expands the formal economy, and ensures that taxation serves the many, not just the privileged few. Until that happens, the tax-GDP debate will continue to be a distraction from the country’s real problem: a state that taxes without trust and spends without accountability.

Dr MG Quibria is a development economist and former Senior Advisor at the Asian Development Bank Institute (ADBI). He holds a Ph.D. in economics from Princeton University and has held academic appointments across Asia, North America, and Europe.​

 

[Saif]

undefined | The Financial Express

thefinancialexpress.com.bd

Even cut-down Tk 2.26t ADP FY25 miserably misses target
Dev spending hits rock-bottom low at Tk 1.53t

FHM Humayan Kabir
Published :
Jul 24, 2025 00:40
Updated :
Jul 24, 2025 00:40

Development spending in Bangladesh hit rock bottom in the past fiscal year as agencies under the post-uprising government trailed far behind even the pared-down Tk 2.26-trillion Annual Development Programme.

Latest official statistics show the ADP-implementation rate in the fiscal year (FY) 2024-25 recorded a 20-year low, raising concerns about the country's economic development and job generation.

The government ministries and agencies spent only Tk 1.53 trillion or 67.85 per cent of the Tk 2.26-trillion revised ADP outlay, Implementation Monitoring and Evaluation Division (IMED) data showed.

The execution rate was 13-percentage-point lower than the 80.63 per cent in the previous FY2024, according to the official data.

Based on the available data, it was found that the rate of implementation rate of ADP in the last fiscal was the lowest in two decades since FY2005-06. The government had no open-source data before the FY2006.

Analysts attribute this unprecedented slowdown to a confluence of factors, including bureaucratic hurdles, a cautious approach to new project approvals amid global economic uncertainties, and a perceived lack of urgency in project execution by various ministries and implementing agencies.

Officials at the IMED told The Financial Express Wednesday that "the biggest failure" of the health ministry was the key reason for the lowest ADP-implementation rate, as this ministry could spend only 21.74 per cent of its total Tk 56.73 billion worth of outlay in the jus-past financial year.

Some other public agencies, including civil aviation and tourism ministry and the primary and mass education ministry, were on the lowest trajectory implementing lower than even the average 67.85-percent rate in the FY2025, officials said.

The analysts see the interim government's tightfisted fiscal policy as one of the key reasons for the lowest-ever ADP implementation in the last FY.

It was felt that the ADP implementation could even be much lower if the autonomous and semi-autonomous state-run companies had not performed well. The autonomous bodies used an impressive 93.21 per cent of their Tk 101.65-billion ADP outlay.

On the other hand, the government ministries and agencies were sluggish in implementing the project-aid portion in the ADP as they spent 65.53 per cent.

The ministries and agencies, however, spent higher funds from government's internal resources than the foreign-aided funds as it recorded 67.33 per cent in the last FY2025, the IMED data showed.

Among the top 15 ministries, the Health, Civil Aviation and Tourism, and Primary & Mass Education performed worse as their ADP-execution rate was lower than the average 67.85 per cent.

On the other hand, the power division and energy and mineral resources division showed best performance with their 98.10-percent and 90-percent implementation rate.

Economists and analysts point out several key issues contributing to this historic low. Delays in land acquisition, cumbersome procurement processes, and a shortage of skilled manpower for large-scale infrastructure projects have consistently held back progress.

"Furthermore, the government's focus on fiscal consolidation and managing inflation may have inadvertently led to a tighter grip on expenditure, impacting the pace of development activities," says one of them.

The implications of such a low implementation rate are far-reaching. Critical infrastructure projects, essential for boosting economic activity and improving public services, will face further delays.

This directly impacts job creation, private-sector investment, and the overall trajectory of national-development goals. The inability to fully utilise allocated funds also signifies a missed opportunity to stimulate the economy, especially at a time when global headwinds necessitate robust domestic demand.

Economists and development experts urge the government to undertake a comprehensive review of the ADP-implementation framework for future advances.

Senior economist Dr Zahid Hussain told the FE that this interim government faced several movements on the streets almost every week over the last one year which is one of the key reasons for the lower ADP implementation.

"Besides, the cautious public-spending approach and strict reviews of the ongoing projects by this government have also affected higher project-execution rate," he added.

Nevertheless, the failure of some big-budget-holding ministries, including health, education and others, should be analysed in-depth for streamlining their development-budget-spending capacity, the economist suggests.​

 

[Saif]

BEPZA’s contribution to exports rises to 17pc

The factories at eight export processing zones under Bangladesh Export Processing Zones Authority contributed 17.03 per cent to the national export of a total $48.28 billion in the recently concluded financial year 2024-25...

www.newagebd.net

BEPZA’s contribution to exports rises to 17pc
Staff Correspondent 23 July, 2025, 22:42

The factories at eight export processing zones under Bangladesh Export Processing Zones Authority contributed 17.03 per cent to the national export of a total $48.28 billion in the recently concluded financial year 2024-25.

During FY25, operational enterprises of various EPZs under BEPZA exported goods worth $8.22 billion, which was 16.22 per cent higher than the $7.07 billion exported in FY24, according to a press release.

In FY24, the factory units under BEPZA contributed 15.9 per cent to the total national export of $44.46 billion.

In FY25, the BEPZA factories also created more than 33,000 new employment opportunities.

Moreover, the state agency also signed 33 agreements with new enterprises, which cemented the way for increased investment in the coming days.

Since its inception, BEPZA-administered factories exported goods worth $119 billion to date.

The manufacturing units at eight EPZs exported their goods to more than 120 countries worldwide.

As of June 2025, a total of 533,527 Bangladeshi nationals have been employed in eight EPZs and the BEPZA Economic Zone, which was 500,110 in June 2024, the press release added.

In FY25, enterprises operating within BEPZA’s EPZs and Economic Zone invested $292.77 million in capital machinery, construction materials, and other fixed assets (excluding working capital). However, the figure was lower than the $350.93 million invested in FY24.

In FY25, the BEPZA signed 33 new investment agreements with investors from China, South Korea, the United Kingdom, Ireland, the British Virgin Islands, Singapore, India, the United Arab Emirates, and Bangladeshi companies.

The total proposed investment under these agreements was $497.48 million, with an estimated employment potential of 59,408 Bangladeshi nationals.

These enterprises would produce a wide range of goods, including readymade garments, electronics, agro-based products, footwear, leather goods, packaging materials, tents, wigs, light engineering products, toys, and composite items.

At present, there are 563 industrial units under BEPZA, of which 450 are operational and 113 are under implementation.

Among the operational enterprises, 33 per cent produce readymade garments, 18 per cent garment accessories, and 9 per cent textile products.

The remaining 40 per cent export a wide variety of goods ranging from electronics and medical equipment to furniture and fashion accessories.

Along with the eight operational EPZs across the country and the BEPZA Economic Zone in Mirsarai in Chattogram, the development of two new EPZs in Jashore and Patuakhali is progressing rapidly to attract more investment.​

 

[Bilal9]

Mirsarai in Chattogram is already online partially but will slowly get to 50% or so by the next 3 years Insha-Allah, so will the two new EPZs in Jashore and Patuakhali in 2027.

However Mirsarai remains the largest EPZ in Asia (35000 acres) and the scope for further FDI placements is very, very wide. Lot's of FDI expected from China especially.

I have very high hopes for Mirsarai. For a small country like ours, this is quite an achievement.