[🇧🇩] Reforms carried out by the interim/future Govts.

[Saif]

Key governance reforms needed for a fairer Bangladesh

While stabilising the economy is a priority, the roots of Bangladesh’s recent turmoil lie in a crisis of governance.

www.thedailystar.net

Key governance reforms needed for a fairer Bangladesh

FILE VISUAL: SALMAN SAKIB SHAHRYAR

Bangladesh has gone through several political transitions since its independence in 1971. Caretaker or interim governments in the past have often delivered important institutional reforms. The present team under Professor Mohammad Yunus is no exception. But to meet the expectations of Bangladeshis during this short window, a focused reform agenda is required.

Bangladesh has come far in the past 53 years, but its economic engines were starting to sputter in the aftermath of Covid and Russia's invasion of Ukraine. Recent data revisions suggest growth was considerably lower than previously estimated, while substantial capital flight weakened the financial sector's health. Add to this the continuous loss in international reserves during the 2022-24 period and persistently high inflation, and the economy by mid-2024 was not in the best of health.

With the move to a crawling peg exchange rate, the tightening of monetary policy, the alignment of prudential standards with international norms, the launch of an asset quality review, and the appointment of independent boards for several of the troubled banks, the Bangladesh Bank has already taken important steps to regain macroeconomic and financial stability. These should now be completed with the introduction of a robust bank resolution framework that gives the central bank the tools necessary to intervene in failing banks, enforce capital requirements, and, importantly, protect depositors.

While stabilising the economy is a priority, the roots of Bangladesh's recent turmoil lie in a crisis of governance. The interim government is pursuing a programme that can be described as one of full transparency and wide consultation to help put in place the rules and institutions needed to secure a fairer Bangladesh for the next generation. In the economic sphere, three priorities stand out:

First, today, the government loses a massive seven percent of GDP annually (about 3.5 lakh crore taka) from tax breaks awarded in non-transparent and arbitrary ways. While some tax incentives are justified, they should only be granted after a due process. Bangladesh does not have such a process and unsurprisingly has one of the highest rates of tax exemptions in the world. Transferring the authority to approve tax policy from the National Bureau of Revenues to the parliament, as is the case in almost all other countries globally, and separating tax policy from tax administration, are foundational reforms to ensure everyone pays their fair share.

The governance of public finances can also be strengthened by disclosing the winners and ownership of government contracts and granting independence to the Office of Comptroller and Auditor General. In the area of social assistance, the creation of a dynamic, unified social registry to better target welfare programmes is a positive step in the direction of greater transparency.

Second, lax regulation of banks allowed connected groups to secure loans that greatly increased the risks to banks. The Bangladesh Bank should require all banks to check and disclose their ultimate owners and borrowers and the links between them to manage risks.

In parallel, with the help of the international community, Bangladesh is working to recover some of the assets it believes were illicitly transferred out of the country. With a properly regulated banking system, the foundation would be laid for attracting additional investment into the sector, reducing the large stock of non-performing loans and rebooting private sector credit for growth and job creation.

Third, digital and data revolution offers great opportunities to strengthen public sector governance and service delivery. Reforms to bolster the quality and independence of the statistics system are under preparation. These could be complemented with the creation of a digital public infrastructure to make the public administration more transparent, user-friendly and efficient, following the example of other developing countries from Brazil to Estonia and Indonesia to India. Bangladesh—the country with the second largest population of digital gig workers—should not be far behind. A modern data protection framework, creating an interoperable digital payment system for mobile financial transactions, the creation of a unified digital ID system, and a consent-based data sharing framework could be priorities, as recommended by the task force on re-strategising the economy.

In strengthening the governance of public finances, the financial system and the administration of data and statistics, the interim government would leave a strong economic legacy on which all future elected governments could build.

Martin Raiser is vice president for the South Asia Region of the World Bank.​

 

[Saif]

Next govt should continue financial sector reform, bring back laundered money: Dr. Ahsan H. Mansur

Bangladesh Bank Governor Dr Ahsan H Mansur said the next government should continue the reform process in the banking sector and continue the interim government's initiatives to try and bring back laundered money. Regarding bringing back the laundered money, the governor said, "No country has been

thefinancialexpress.com.bd

Next govt should continue financial sector reform, bring back laundered money: Dr. Ahsan H. Mansur
UNB
Published :
Feb 21, 2025 00:12
Updated :
Feb 21, 2025 00:12

Bangladesh Bank Governor Dr Ahsan H Mansur said the next government should continue the reform process in the banking sector and continue the interim government's initiatives to try and bring back laundered money.

Regarding bringing back the laundered money, the governor said, "No country has been able to bring back the laundered money in less than five years. We are trying. If this government is not able to do so, the next government should take this programme forward consistently."

He said this while speaking as the chief guest at a seminar on 'Macroeconomic Landscape: Challenges in the Banking Sector and the Path Ahead' held at the Economic Reporters Forum (ERF) auditorium in Paltan Tower, Dhaka, on Thursday.

The special guests at the seminar organised by ERF were Professor Dr. Mostafizur Rahman, Honorary Fellow of the Center for Policy Dialogue (CPD), and Mohammad Ali, Managing Director of Pubali Bank.

The governor said there are many challenges in the economy. However, there is no reason to worry about foreign exchange and reserves, he added. The decline in reserves has been stopped to some extent. Not a single penny has come from the IMF. But remittances have increased by 24 per cent. This month, it will cross 30 per cent.

In this fiscal year, remittances will cross $30 billion. The main reason for this is that money laundering has been prevented, he said.

Dr. Mansur also said, no dollars are being sold from Bangladesh Bank now. There is almost no difference in the dollar rate in the bank and the curb market.

Claiming that the remittance rate is not being manipulated, the governor said, a group in Dubai tried to manipulate the dollar. But the central bank was not affected by it.

He also said, private sector credit growth has decreased due to the decline in deposit growth. It is not because of the increase in policy rates. Government debt has decreased from 12 per cent to 9.0 per cent. Now banks will have to lend to the private sector.

"The days of lending to government and making profits are coming to an end. Banks have to make profits by lending," he pointed out.

The governor talked about reforming the banking sector, especially Bangladesh Bank.

He said, if a single family takes 87 per cent of a bank's money, it takes time for that bank to stand. Despite all this, Islamic banks have turned around. They have started giving loans. This happened mainly due to gaining the trust of depositors.

Regarding inflation, the governor said, inflation did not happen in a day. It takes at least 18 months to implement it after tightening the policy. In our case, it has been six to seven months. It will take at least another five months to see a good effect. We have still kept the monetary policy in a contractionary position.

The governor said that the central bank has taken many steps to reform the banking sector in Bangladesh after August 5. He said the exchange rate of foreign currencies is now much more stable. The real effective exchange rate is also good. The remittance flow is also good.

Regarding the changing the narrative of LDC graduation, the governor said, "No country in our group is now in the LDC category. Bangladesh has achieved the capacity to go to LDC in 2021. But under the pressure of our country's industrial sector, we extended the LDC transition time to 2026."

"There are many good aspects of graduation. There is no honour in being poor. Why can't we become a middle-income country? We are a middle-income country. Why should we remain a low-income country for tariff benefits?" he kept questioning.

ERF President Daulat Akhtar Mala delivered the welcome speech at the seminar. The programme was moderated by ERF's Joint Secretary Manik Muntasir.​

 

[Saif]

LOCAL GOVT REFORM: 2 uniform laws suggested

The Local Government Reform Commission has submitted a primary report to the government, recommending a comprehensive overhaul of the country’s local government system.

www.newagebd.net

LOCAL GOVT REFORM: 2 uniform laws suggested
Staff Correspondent 23 February, 2025, 00:38

- Local body polls possible in June: commission

- 84pc people want independent local govt commission: BBS

The Local Government Reform Commission has submitted a primary report to the government, recommending a comprehensive overhaul of the country’s local government system.

The reform commissions in its preliminary report also suggested two uniform laws for local government bodies and said that holding elections to all local government bodies simultaneously in June was possible.

The preliminary report along with a household survey report was published by the chief adviser’s press wing on Saturday.

The proposals aim to streamline governance, address legal complexities, and enhance the effectiveness of local governance in Bangladesh.

The preliminary report highlighted the current state of local government institutions in Bangladesh, which operate under a three-tier structure – the Union Parishads, the Upazila Parishads and Zila Parishads, as well as the municipalities and city corporations.

The report noted that, after the July mass uprising, local government institutions had been effectively non-operational, leaving a significant governance gap.

In this context, the commission said that simultaneous elections for all local government institutions by June 2025 were possible.

The commission recommended to merge the five laws for local government elections into two uniform laws-- one for Union Parishad, Upazila Parisahd and Zila Parishad and the other for municipalities and city corporations.

It said that the two unified laws can be introduced through an ordinance between March and April this year.

The elections for local government bodies in both plain lands and hilly areas may be conducted by June 2025, the commission said.

However, this will be possible only if a consensus is reached between the government, political parties, and the Election Commission, it said.

The commission led by retired professor Tofail Ahmed suggested simplifying the administrative procedures through these unified laws to reduce redundancy, improve coordination, and ease the election process.

The proposed reforms also advocated for a shift toward a parliamentary-style system within local government institutions.

This approach is intended to decentralise power further and ensure that local governance structures are more responsive to community needs, the commission said.

It suggested that local government bodies should operate similarly to the national parliamentary system,

with clear distinctions between legislative and executive roles.

The legislative aspect would be led by a ‘Sabhadhyakha,’ akin to the Speaker of the National Parliament, while the executive arm would be headed by a chairman or a mayor.

A key element of the proposed reforms is the establishment of a five-member permanent Local Government Commission by giving constitutional recognition.

This commission would oversee the implementation of the reform measures and ensure that local government structures are strengthened.

The report also proposed the creation of a ‘Local Government Service,’ providing career pathways and professional opportunities for local government employees and addressing manpower issues within these institutions.

A household survey conducted in January 2025 by the Bangladesh Bureau of Statistics revealed that approximately 84 per cent of people support the formation of an independent and powerful Local Government Commission through new legislation.

This survey, which covered over 46,000 households in rural and urban areas across 64 districts of the country, also highlighted that 77 per cent of respondents favour the introduction of a single, unified law for local government bodies to replace the existing complex framework of five laws and over 100 notifications and orders.

In terms of electoral preferences, 71 per cent of the survey participants believe that local government elections should not involve political party symbols, while 24 per cent support their inclusion.

The survey also found strong support for ensuring minimum educational qualifications for candidates of local government candidates.

Among respondents, 38 per cent favoured a Secondary School Certificate as the minimum qualification, while 30 per cent suggested the requirement of an HSC, and 25 per cent advocated for a university degree.

The survey also revealed that the public is increasingly concerned about the growing urbanisation in Bangladesh.

Approximately 85 per cent of the respondents expressed support for establishing urban planner offices at the upazila level to manage urban growth effectively.

Besides, 80 of those surveyed recommended the establishment of full civil and magistrate courts at the upazila level to serve local communities in a better way.​

 

[Saif]

Vested political interests may hinder reforms: law adviser

Law adviser Asif Nazrul on Monday said that political parties driven by vested interests always neglected reform initiatives.

www.newagebd.net

Vested political interests may hinder reforms: law adviser
Staff Correspondent 25 February, 2025, 00:41

Law adviser Asif Nazrul. | File photo

Law adviser Asif Nazrul on Monday said that political parties driven by vested interests always neglected reform initiatives.

Addressing a seminar at Dhaka University on ‘Students’ perspective and expectations on reforms in state institutions’, he said that political parties, in general, did not accept the reforms that would make them accountable to the people.

Vested political interests may hinder the refoarm initiatives taken by the interim government, he said.

He referred to the failures of previous political reform initiatives including the three-alliance political roadmap after the fall of the military ruler HM Ershad in the late 1990.

Supported by UNDP, the Centre on Budget and Policy organised the seminar at Professor Muzaffar Ahmed Chowdhury Auditorium at Dhaka University.

The law adviser said that a maximum of the reforms recommended by the six reform commissions would be possible if the majority of the political parties agreed and signed the ‘national charter’, or the ‘July charter’.

Citing the ongoing consensus-building approaches and drafting of the ‘national charter’ by the interim government, he said, ‘Only short-term reforms will take place if most of the political parties disagree with mid-term and long-term recommendations. But the students and mass people didn’t sacrifice their lives only for short-term remedies.’

If the political parties agree, an elected government can continue the reform activities, he said. The seminar began with a presentation of a study where 2024 students from 10 higher educational institutions responded.

Discussing the key findings, Dhaka University’s development studies teacher Professor Kazi Maruful Islam said that the majority of respondents wanted a proportional representation electoral system, grassroots opinion-based selection of candidates in the elections, political influence-free administration and anti-corruption drives, accessible judiciary and better services by police.

‘The students also recommended the abolition of all laws infringing their freedom of expression,’ he said.

Electoral reform commission chief and national consensus commission member Badiul Alam Majumder said that the fruits of the student-mass uprising might be snatched if the youths neglected the reform processes.

Another member of the consensus commission, Iftekharuzzaman, said that all the reform initiatives would be futile if there was no reform in the education sector and political parties.

Dhaka University’s sociology teacher Samina Lutfa said that the national consensus commission would not bring inclusive results if it excluded women and ethnic minority people from discussions.

Dhaka University vice chancellor Professor Niaz Ahmed Khan, Jatiya Nagarik Committee joint convener Sarwar Tusher, Chhatra Dal leader Mallick Wasi Uddin, Biplobi Chhatra Moitree president Nuzifa Hasin Rasha, Ganatantrik Chhatra Council leader Saidul Haque, social science student Sarbamitra Chakma, and physically challenged student Uzzal Mahmud also spoke.​

 

[Saif]

Reluctant to carry out economic reforms, frustration in the committee

Two reports on economic reforms sit idle since there are no strong initiatives from the government to implement the recommendations.

en.prothomalo.com

Reluctant to carry out economic reforms, frustration in the committee
Jahangir Shah
Dhaka
Published: 05 Mar 2025, 08: 49

Two reports on economic reforms sit idle since there are no strong initiatives from the government to implement the recommendations, thus, confusion arises whether the expectation on the structural reform to the economy would be fulfilled.

The interim government prepared two reports on the corruption and irregularities in the economy during the autocrat Awami League governments, as well as on determining future economic strategies. One of the two reports is the whitepaper formulated by the committee led by Debapriya Bhattacharya, Distinguished Fellow at Centre for Policy Dialogue (CPD) and Convener of the Citizen's Platform for SDGs, while another is the report of the taskforce led by former director general of Bangladesh Institute of Development Studies (BIDS) KAS Murshid.

The whitepaper was submitted to Chief Adviser Professor Muhammad Yunus on 1 December 2024 and the taskforce report on 30 January. Since no significant steps have yet been taken to implement the recommendations of the two reports, frustration grew among the committee members, with several members opining the government is not paying attention to economic reforms.

When asked, Debapriya Bhattacharya, head of the Committee on the preparation for White Paper on the State of Bangladesh Economy, told Prothom Alo, Chief Adviser Professor Muhammad Yunus owns the whitepaper but those who are relevant from his advisory council did not own it. Perhaps, there is a lack of capacity to carry out reforms as per the report, or the atmosphere that the interim government is passing through is not favourable for reforms.

There had been much discussion on corruption, irregularities, money laundering, and whimsical economic management that occurred during the 15-year rule of Awami League governments, which was overthrown by the July mass uprising on 5 August last year.

The interim government took office on 8 August. The new government formed various commissions, committees and taskforces aimed at carrying out reforms in different sectors. So far, 11 commissions have filed full reports so far and another submitted a summary.

A National Conesus Commission led by the chief adviser was formed to review and adopt the recommendations submitted by the six reform commissions. The Conesus Commission held a phase of discussion with the political parties. Discussion will start with the political parties soon to take the latter’s opinions. However, no definite action was seen on the whitepaper and the taskforce report.

A top official of the finance ministry told Prothom Alo, “The budget of the next fiscal year will reflect the recommendations of the whitepaper and the taskforce report and work has begun accordingly. However, all recommendations of the two reports cannot be implemented overnight, it has to be done in phases. This government will start several recommendations and the next governments will do the remaining ones.”

Whitepaper sits idle for three months

Led by Debapriya Bhattacharya, the committee to formulate the whitepaper was formed on 29 August. The 12-member committee included

Professor AK Enamul Haque, Dean of Faculty of Business and Economics, East West University, Ferdaus Ara Begum,Chief Executive Officer, Business Initiative Leading Development (BUILD), Imran Matin, Executive Director 0f BRAC Institute of Governance and Development (BIGD), BRAC University, Dr Kazi Iqbal, Senior Research Fellow of Bangladesh Institute of Development Studies (BIDS), Dr M Tamim, Professor of Bangladesh University of Engineering and Technology (BUET) and former Special Assistant to the Chief Advisor (2008), Dr Mohammad Abu Eusuf, Professor of Department of Development Studies, University of Dhaka, Professor Mustafizur Rahman, Distinguished Fellow, Centre for Policy Dialogue (CPD), Dr Selim Raihan, Professor of Department of Economics, University of Dhaka, and Executive Director, South Asian Network on Economic Modeling (SANEM), Dr Sharmind Neelormi, Professor, Department of Economics, Jahangirnagar University, Dr Zahid Hossain, former lead economist, World Bank and eminent columnist attended the meeting while Dr Tasneem Arefa Siddiqui, former professor, Department of Political Science, University of Dhaka, and founding chair, Refugee and Migratory Movements Research Unit (RMMRU).

The whitepaper committee submitted a 397-page report after three months highlighting various irregularities that include lootings, money laundering, irregularities in banking sectors and power sector corruption, as well as placing various recommendations for economic reforms.

According to the White Paper, a total of USD 234 billion or approximately Tk 28 trillion was siphoned off abroad during the tenures of the Awami League governments between 2009 and 2023.

It is estimated that between Tk 1.61 trillion and Tk 2.80 trillion have been used as bribes and extortion at various levels, solely derived from public expenditure on development projects.

Between Tk 770 billion and Tk 980 billion of these were simply bribes paid to government officials while between Tk 700 billion and Tk 1.40 trillion were extortions by politicians and their accomplices and the rest are spent on collusive payments. Most of them live aboard.

About USD 60 billion or Tk 7.20 trillion has been spent through the annual development programme (ADP) over the past 15 years, but USD 14 billion (23 per cent) or approximately Tk 1.61 trillion to USD 24 billion (40 per cent) or approximately Tk 2.80 trillion of it was wasted and looted in the name of development projects during this period.

According to the White Paper, trillions of takas were embezzled from the stock market through fraud, manipulation, placement shares, and deceit in the IPO process. Banks were taken over in collusion with the state agencies over the course of one and a half decades. The default loans of the banking sector amounted to Tk 6.75 trillion in the country, which is equivalent to the cost of constructing 14 metro rails or 24 Padma bridges.

The committee to formulate the whitepaper recommended structural reforms to remove these irregularities and corruption from the economy, and drew immediate focus on seven aspects. These are; (1) rolling out an economic stabilisation programme, (2) delineating a framework for the national budget for 2025-26 fiscal, (3) proposing a mid-term planning format, (4) identifying priority reform domains, (5) operationalising a robust transition strategy for LDC graduation, (6) accelerating substantive delivery of the SDGs and (7) hosting a forum for inclusive and sustainable development.

There is no visible progress on the seven recommendations, although several initiatives have been taken to control inflation and prevent the foreign currency reserve fall to bring economic stability.

The white paper committee held a discussion on the white paper in a hotel in the capital on 18 January. It was attended by adviser Sheikh Bashiruddin Ahmed. Sources say the committee wanted finance adviser Salehuddin Ahmed and Bangladesh Bank governor Ahsan H Mansur to attend the event. But they did not attend the programme.

Debapriya Bhattacharya explained the interim government’s activities over the economy of the country from three perspectives.

He said first the white paper has revealed the economic characteristics of the previous government. Second, the government has taken several initiatives to strengthen the economy, including controlling inflation rate. The interim government deserves half the marks for that. Third, the government has failed to achieve any notable progress in terms of infrastructural reform of the economy.

In his opinion, the discussion of the election has come to the fore now. The countdown of the interim government has started. The time to make the most of the opportunity to reform the nation is flying fast. He stressed on prioritising economic reform in the election manifesto of the political parties for the upcoming elections, he said.

Recommendation of the taskforce

The other members of the taskforce, named “Re-strategising the economy and mobilising resources for equitable and sustainable development” apart from KAS Murshid are - former World Bank official Akhtar Mahmood, Dhaka University’s economics department professor Selim Raihan, former head of the research department of Commonwealth secretariat Abdur Razzak, Yale University’s economics department professor Mushfiq Mobarak, BUET professor Shamsul Haque, Dhaka University’s economics department professor Rumana Huque, former president of MCCI Nasim Manzoor, BIDS research director Monzur Ahmed, CPD executive director of Fahmida Khatun, BDjobs chief executive officer AKM Fahim Mashroor and GED member Md. Kawser Ahmed.

The taskforce was formed on 11 September. On 30 January, they submitted their 526-page report to the chief adviser which contained several recommendations regarding a number of socioeconomic issues. One of the most notable recommendations was – introduction of a progressive revenue system which will allow collecting more revenue from the rich. The taskforce also asked to stress on increasing allocation for education and health and making relevant services more available and affordable. The taskforce also has specific proposals.

The advisory council discussed the report during a meeting held in February. A decision was taken that the council will scrutinise those recommendations and all ministries will implement those during the tenure of this government. Council also asked to submit a list of the recommendations that should be implemented in the next advisory council meeting. However, there has not been much progress in this regard since then.

For instance, there was a recommendation of dividing the Bangladesh Biman to two sections to privatise it. It has been learnt that there has been no discussion in the Civil Aviation Authority or in the Ministry of Tourism as yet. Apart from this, it has been recommended to increase exports by serving 1500 companies that export more than 1 million dollars a year. However, the ministry of commerce is yet to take any action regarding this.

SANEM (South Asian Network on Economic Modelling) executive director Selim Raihan was a member of both white paper committee and the taskforce. He expressed frustration for not taking any initiative to implement the recommendations made by these two bodies.

Speaking to Prothom Alo, Selim Raihan said, “A partisan government is never interested in reforms. People inside and outside the party obstruct in case the party takes any reform initiatives. However, the interim government has no such obstruction. Despite that, there has been no initiative so far.”

Asked why the government is not being able to implement the recommendations, Selim Raihan said, “This government does not have the support of the bureaucrats. The time for these reforms is flying fast. People now are talking more about the elections rather than the reform.”

The commerce adviser said while addressing a CPD event on 24 February that he did not get the taskforce report. Taskforce chief KAS Murshid was surprised to hear that. However, the report was published on the website of the planning ministry right after it was handed over to the chief adviser.

The taskforce has prepared the report under the planning ministry. However, the planning adviser was not present in the two-day conference that started 24 February.

‘Good policy without implementation’

Dhaka chamber former president Abul Kashem Khan told Prothom Alo, “The country adopts good policies. But they have never been implemented. We expect a lot from the interim government. So the government must implement the recommendations made by the white paper committee and the taskforce. The entire process would be easier if the businesspersons could be involved. The businesspersons will find some confidence in the government, if it can implement at least two to four of these recommendations.”

This report appeared in the print and online editions of Prothom Alo and has been rewritten in English by Hasanul Banna and Ashis Basu​