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

[Saif]

Power, communication sectors’ reform underway: adviser

Adviser to the interim government Muhammad Fouzul Kabir Khan on Thursday said that the government had embarked reforming the power, energy, road, bridges and railway sectors to fulfil the expectation of the people...

www.newagebd.net

Power, communication sectors’ reform underway: adviser
Bangladesh Sangbad Sangstha . Dhaka 12 September, 2024, 22:54

Foreign Investors’ Chamber of Commerce and Industry’s board of directors held a meeting with power, energy, and mineral resources adviser Muhammad Fouzul Kabir Khan on Thursday. Among others, FICCI president Zaved Akhtar was present. | Press release

Adviser to the interim government Muhammad Fouzul Kabir Khan on Thursday said that the government had embarked reforming the power, energy, road, bridges and railway sectors to fulfil the expectation of the people.

‘Different agencies or companies linked with the ministries of power, energy, road, bridges and railways are being reformed and renovated in an effort to fulfil peoples dream’, he said.

The adviser said this on the day in a meeting with a group of representatives of Foreign Investors’

Chamber of Commerce and Industry led by its president Javed Akhter at the Secretariat.

During the meeting, the adviser said that unbridled corruption, unfairness, injustice and inequality during the recent past regime led the students and common masses to forge movement to unseat the fascist government and constitute a new government to build a new nation.

‘The dream came true in exchange of huge sacrifice and we are now working to materialise the dream of the martyrs,’ Kabir added.

Seeking all out cooperation from the apex body of the foreign investors, Fouzul Kabir said, the people of the country want to see a discrimination-free new Bangladesh.

‘So, I hope that the apex body will enhance their support to the incumbent government for safeguarding the peoples’ interests and building a new Bangladesh,’ he said.

Senior vice-president Eric M Walker, vice-president Yasir Ajman, executive director TIM Nurul Kabir were included in the FICCI delegation.

Senior secretary of the Road Transport and Highway Division M Ehsanul Huq, Power Division senior secretary M Habibur Rahman, Energy and Mineral Resources Division senior secretary M Nurul Alam were present.

Assuring the interim government of extending all cooperation, FICCI president Javed Akhter said that they wanted to contribute in building a discrimination-free new Bangladesh by doing business with utmost honesty and sincerity.​

 

[Saif]

Reform commissions on their salvaging mission

In his second address to the nation, Chief Adviser Dr Muhammad Yunus has made the most important announcement of forming six reform commissions assigning those with the task of recommending amendments to provisions in their respective areas. The purpose is to attain the goal of a governance system

thefinancialexpress.com.bd

Reform commissions on their salvaging mission
Nilratan Halder
Published :
Sep 12, 2024 22:14
Updated :
Sep 12, 2024 22:14

In his second address to the nation, Chief Adviser Dr Muhammad Yunus has made the most important announcement of forming six reform commissions assigning those with the task of recommending amendments to provisions in their respective areas. The purpose is to attain the goal of a governance system for the people, by the people and of the people. All the recommendations must align with the aspiration students of the anti-discrimination movement have made their driving force for establishing a society of equal opportunity for all. The commissions will start working from October 1 next under six prominent persons, whose names he mentioned, heading those. Subject to perusal by political parties, reforms to the areas concerned will be brought about.

The trickiest issue here is the decentralisation of power from the clutches of the elite, privileged and moneyed classes to make power-sharing inclusive. In a unitary government of centralised power, even the legislature can be changed to consolidate power by the ruling party provided it receives the required majority as stated in the constitution. So the greatest challenge before the interim government is to invent a system that leaves no room for any manipulation of the system of election by the party in power.

Remarkably, of the three state organs, the legislative has been left out of consideration for reform. The crux of the problem facing the interim government actually lies here. It cannot bring about any constitutional amendments and the validity of its rule until an elected government takes over will also have to be endorsed and incorporated by the legislature. Its strength is the unambiguous support it receives from the main actors of the political changeover and also of the mass people and most political parties except the party or parties that formed or supported the deposed government.

However, this is no guarantee that the aspiring political parties ---much as they may make a show of their acquiescence to the interim government's and the students' principled stand for a government devoted to serve the people instead of party interests at the cost of the people's cause---will be able to break free from their murky past marked by misrule and anti-democratic and anti-people activities. The deposed authoritarian dispensation took the monopoly of power and privileges to their extreme but other elected parties to have come to power or shared power were no better when it comes to monopolistic rule.

The chief adviser has detailed the various corrective measures already taken to bring order in the areas of public and financial administration. In the financial sector including banking, some discipline has been restored. This has been possible because financial matters and banking business do not have to comply with bureaucratic diktat, chiefly from the Bangladesh Financial Intelligence Unit that played a role contrary to the stated one for which it was established. These are areas that demanded immediate attention for routine works of governance.

Unfortunately, no unelected government --- much as the people's support it may have--- cannot likewise effect fundamental changes to the country's constitution. This country boasted a constitution that was reputed to be a unique charter guaranteeing equal rights of people of all classes. But subsequent distortion and manipulation have left it bereft of some of its cardinal principles or the main pillars such as secularism and socialism.

This is, however, the interim government's weakness as well as its strength. Weakness, because it cannot make the political parties swallow the bitter pill but strength, because it has taken in its hands the onerous job of giving the best possible solution to the defective system of deciding the people's mandate for their representatives to rule. Now the leaders known as coordinators of the Students Against Discrimination (SAD) are keeping vigil and no one dare take a stand contrary to their firm stand. But in the heady days of election campaign, things may be different and if there is an absolute majority a party receives under the parliamentary system, the current bonhomie may disappear.

So the constitutional reform commission and the election reform commission will have the crucial role to play. The two together with the judiciary reform commission will have to ensure check and balance in power sharing at the top so that concentration of power in a single hand creates no scope for producing a fascist or an autocrat or even oligarchy or plutocracy. This is a tall order but Bangladesh, coming through trials and tribulations of a number of mass uprisings, now deserves a much needed desirable settled system of electing a government and handing over power smoothly and peacefully.

Here the important issue is to ensure accountability and transparency which law alone cannot guarantee unless those in power rise up to the occasion to meet the new generations' expectation. They must recognise that the days of politics geared to advancing material gains, abuse of power and vendetta are over. The new generations have got the agenda and priorities right. By endorsing those, they will be able to respect the common people's will and earn the right to rule. Otherwise, the nation will never be at peace with itself and have to pay a heavy price for this fallibility. This time, it must not fail but sail through the turbulent time to its desired destiny.​

 

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How to go about reforming Bangladesh’s financial sector

It is most likely that we will need multiple push and pull factors to survive through this financial sector crisis.

www.thedailystar.net

How to go about reforming Bangladesh’s financial sector

VISUAL: SALMAN SAKIB SHAHRYAR

The financial sector of Bangladesh requires many reforms, from the macro to the micro perspectives. The laundry list of reforms is long, and focus is required for bringing discipline in the lending practices of the sector and finding a recovery pathway for the economy largely affected by the mounting non-performing loans (NPLs).

No one can deny the sorry state of the banking sector. But like all other sectors of the country, the banking sector also requires bringing back focus to the people it serves—the people who need a reliable service for all their banking and finance needs day in and day out. We are also going through an unprecedented climate emergency and do not yet have an estimate of the economic impact it will leave us with.

Combining the shocks of the financial sector crisis, along with climate risks, compels us to think what new ways are available to serve and protect the consumers, especially the micro small and medium enterprises (MSMEs) that are in distress. The climate emergency and its impact on the MSMEs will continue to escalate unless we take actions. Given that the MSMEs were pushed to the tail end of priorities over some years now, they are expected to be impacted the most in this crisis.

On a global scale, the term "great finance divide" is being used. This refers to how the majority of the developing countries and one in four middle income countries are at high risk of fiscal crises in the post-pandemic world, creating a financial divide between the developed and developing economies. The inequitable practices of the global financial system have always been questioned whether it is conducive to the growth of the developing economies or whether it has worsened this divide.

While Bangladesh is part of that global tragedy, the suffering has been worsened by its own man-made financial sector crisis. The "great divide" has taken a different shape in our economy, as it is mostly the large corporates that have benefitted from the stimulus and privileges of the banking sector at the cost of the MSMEs and the individual depositors, both in the pre- and post-pandemic scenarios. While the inequitable international financial and monetary system is beyond the reach of our reform, we need to focus on how we can minimise this inorganic divide that we created.

The upcoming white paper on the state of the economy will hopefully shed some light on the extent of the damage done to the sector. As for recovery, coordinated efforts will be required from both from the policymakers and the financial institutions.

It is most likely that we will need multiple push and pull factors to survive through this financial sector crisis. The pull will hopefully come from the multilateral agencies through a factual assessment of the sovereign debts, but the push has to come from the regulatory bodies, namely Bangladesh Bank (BB), Microfinance Regulatory Authority (MRA), Insurance Development and Regulatory Agency (IDRA) and Bangladesh Securities and Exchange Commission (BSEC). BB, as the monetary policymaker and as a board member in the rest of the regulatory agencies, will have to shoulder much of the responsibility to regain trust of the depositors/ borrowers through regulatory oversight and enhanced transparency.

The first step can be enhancing the financial literacy of the consumers in understanding all the products available for short- and long-term investments, especially capital market instruments such as government issued securities or treasury securities. Possibly expanding the network of treasury securities, like the Sanchaypatra, can make it simple and accessible to the investors across the country. This will provide the consumers with a safe choice of investment and the government the ability to mobilise more resources through the financial channels.

BB can also consider amending its Bangladesh Bank Order, 1972 and expand the definition of "borrower" instead of limiting it to banking companies only. MRA has launched its own Microfinance Credit Information Bureau (MF-CIB) but has its own limitations. Due to lack of interoperability with the banking sector CIB, a loan from a microfinance institution (MFI) will not show up in the banking sector credit information check and vice versa. As we are heading towards a more digital and integrated economy, it's high time that the central bank brings all categories of borrowers under the umbrella of one credit information check. With this small change in the legislation, the sector will have benefits in two folds—the obvious one is enhancing transparency in lending practices especially from the capital market, but the more important one is it will allow the small borrowers to become bank borrowers with a reliable credit history that they built up over the years with the MFIs.

Roughly over 50 percent of Bangladesh's bankable population do not have access to a reliable financial service, and the ones who have access do not always get the quality product or service they need. While there is a huge demand and potential in the market for innovative financial products, what we lack is a safe space for testing new ideas.

BB will need to work with MRA, IDRA and BSEC to catalyse innovation in the sector to expand the offers of reliable financial products and services, especially insurance that can provide protection during the climate disasters that we are experiencing now. BB, along with the other regulators, needs to think at the system level what needs to be done to ensure the market experiences innovations while remaining focused on serving the customers. We have a number of policies, including the National Financial Inclusion Strategy (NFIS), so it is time to bring back focus on the implementation of these policies with adequate resource allocation.

While we can continue to provide a reform agenda, the key objective will remain in bringing back the trust, enhancing the transparency in lending practices/payment systems, limiting the access to finance for the highly leveraged businesses/individuals, and improving the overall consumer protection. Access and usage of quality financial services has been a challenge. To address that, BB can reconsider its digital bank licensing and allow a competitive procedure that can bring efficiency in financial services, as well as carry forward with the more important agenda of implementing financial inclusion and achieving the Sustainable Development Goal (SDG) targets. We have a long way to go, and I want to remain hopeful of my country and its ability to serve its people through adequate and reliable financial sector services.

Afsana Islam is development practitioner and former banker.​

 

[Saif]

Turning the tide: Critical reforms to correct 15 years of misrule

As Bangladesh enters a new era following the ouster of the Sheikh Hasina-led Awami League government, which ruled over the nation for 15 years and is responsible for countless financial wrongdoings, the need of the hour is to reform the overall system of governance.

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Turning the tide: Critical reforms to correct 15 years of misrule

As Bangladesh enters a new era following the ouster of the Sheikh Hasina-led Awami League government, which ruled over the nation for 15 years and is responsible for countless financial wrongdoings, the need of the hour is to reform the overall system of governance.

Nearly all sectors became corrupt in the hands of cronies who weaponised their political influence and carried out misdeeds, negatively impacting the economy.

In recent years, Bangladesh's economy has been under tremendous pressure due to fast-depleting foreign exchange reserves and stubbornly high inflation.

Alongside that, job creation is falling, income inequality is widening, GDP growth has slowed and the tax-to-GDP ratio has not registered an uptick.

The banking sector is struggling with a record level of non-performing loans while the stock market has remained sluggish due to a confidence crisis.

Additionally, the energy sector is eating up huge chunks of subsidies from government coffers, and there has been little progress in export diversification, with the RMG sector continuing to dominate the export basket.

However, the biggest hurdle to the overall business environment is the fact that corruption has permeated all facets of society, posing a significant barrier to attracting foreign investors.

After the political changeover, people's demands to implement reforms are at an all-time high. In fact, reforms are the primary demands of the people expected from the interim government.

The following is a sector-by-sector breakdown of planned reforms along with measures that experts suggest should be taken to restore good governance.

Reforming the banking sector

The banking sector has been debilitated by rampant corruption and irregularities over the past 15 years.

Non-performing loans (NPLs) have soared, with many banks now in the red due to scams executed by influential individuals who weaponised their political affiliations.

In 2008, when the Awami League won the first of four consecutive general elections, soured loans in the banking sector stood at Tk 22,480 crore.

By the end of June this year, the amount had soared to over Tk 200,000 crore, accounting for over 12 percent of the total disbursed loans in the banking system, as per Bangladesh Bank data.

Non-bank financial institutions (NBFIs) are in a similarly fragile situation.

However, under newly-instated Governor Ahsan H Mansur, the central bank has moved quickly, reconstituting the board of directors of several troubled banks.

Furthermore, the interim government announcing its intention to fulfil a long-standing demand by forming a banking commission is expected to go a long way to restoring good governance to the sector.

Another measure, as revealed by the central bank governor, will be the formation of three task forces to ensure good governance.

However, there remain areas in urgent need of attention.

Industry insiders opined that forming new boards for troubled lenders would not be enough by itself.

The new boards should be held accountable, such as by being asked to provide specific timeframes and plans to revive the ailing lenders, they said. The BB should then analyse the plans and gauge whether those measures alone will be enough.

Analysts said speeding up default loan recovery and bringing back laundered money should be prioritised.

They added that the central bank's focus should also be on NBFIs.

Exchange rate management, boosting forex reserves and reducing irregularities at banks are among the other challenges that the central bank must combat.

Ensuring full autonomy of the Bangladesh Bank and formulating a plan for the reduction of NPLs are also imperative.

Another piece of advice from experts is to prevent a single person or business from securing ownership at multiple banks.

Rebuilding confidence in stock market

The stock market of Bangladesh has been suffering from a dearth of investor confidence, chiefly stemming from a lack of good governance. As such, massive reforms are urgently required.

The interim government has made some changes to reverse the grim scenario, moving swiftly to appoint former top banker Khondoker Rashed Maqsood as the chairman of the Bangladesh Securities and Exchange Commission (BSEC).

At the start of September, the BSEC also formed a five-member committee to investigate irregularities and corruption of the past.

It formed another committee specifically to investigate the market involvement and activities of Mohammad Saiful Alam and Salman F Rahman -- owners of controversial conglomerate S Alam Group and Beximco Group, respectively.

However, while the measures were appreciated, there remains a lot of ground to cover.

Experts believe the commission should first investigate the involvement of those within its ranks in illicit activities such as manipulation and punish them accordingly.

They added that the BSEC's main priority is to ensure the entry of good companies, meaning that quality initial public offerings (IPOs) should be prioritised.

In order to do so, they said the regulations regarding book-building methods must be revisited.

Additionally, it must ensure that all stakeholders and the regulator play a proper role in the IPO process.

Another long-standing demand to attract good companies is to widen the tax gap between non-listed and listed companies.

At the same time, if any company ceases production for a long time, it should be delisted from the stock exchange.

They added that this is the best possible time to bring all profitable state-run companies to the stock market.

Along with that, the BSEC should monitor mutual funds stringently so general investors are attracted to such investments.

The BSEC should also decide to implement policy changes only after conducting thorough research.

Surveillance and monitoring should be strengthened to bring vibrancy back to the secondary market and reduce insider trading and other forms of manipulation.

Other suggestions include ensuring good quality financial reports and keeping track of intermediaries' activities so they cannot embezzle investor funds.

Most of all, the BSEC should not consider what impact its decision may have on the stock index. Its sole consideration when making decisions should be to ensure good governance.

Improving ease of doing business

Alongside reforms that will serve as a salve for certain ailing sectors, entrepreneurs also urged measures to improve the general business environment.

One key demand is to improve the ease of doing business, which would encourage more investment and result in more jobs.

They said the government can achieve this by focusing on curbing extortion at every level and removing bureaucratic tangles.

Another suggestion is to update commercial laws with the aim of fully digitalising processes relating to international trade, such as issuance of invoices and signing of contracts, to reduce the scope for fraudulence and money laundering.

Most businessmen, citing that they often had to pay bribes, also demanded massive reforms to service-oriented government entities like the Registrar of Joint Stock Companies and Firms, and the Department of Environment.

They also stressed the need for reforms to the Bangladesh Investment Development Authority.

Fixing fragile trust in insurance industry

Insurance companies in Bangladesh have been struggling to take off owing to low confidence in the sector as a consequence of the low claim settlement ratio.

In Bangladesh, the claim settlement rate stood at 65.19 percent in 2023, according to data from the Insurance Development and Regulatory Authority (Idra).

This is far worse than the global average of 97-98 percent. In India, the claim settlement rate stood at 98.45 percent in the fiscal 2022-23, according to media reports.

The scenario grows even bleaker when one takes into consideration that over 26 lakh insurance policies have lapsed in the last 14 years.

The industry has also failed to grow. In fact, by some metrics, it has regressed. In 2009, the total number of policies stood at nearly 1.12 crore. That number fell to 85.88 lakh in 2023.

To raise confidence in this sector, the government should strengthen the regulator, experts said.

It should also conduct a thorough investigation to find how the insurance sector was corrupted and who is responsible for that.

The Idra should regularly monitor whether any insurer spends more than permissible limits as well as where they invest their funds.

If the government takes strict action against insurers in case of failure to settle claims, consumer confidence will be bolstered.

Ensuring transparency in energy sector

The most vociferous demand in terms of the energy sector has been the abolishment of the 'indemnity act', formally known as the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010.

The interim government has already stopped using the act and also formed a committee to identify the nature of the deals signed by the previous government under this act.

Instead, the interim government began using Public Procurement Rules 2008 in importing liquefied natural gas (LNG).

Another common reform proposal regarding the sector is to strengthen the Bangladesh Energy Regulatory Commission, which was largely incapacitated by the previous government.

On December 1, 2022, the government issued an amendment to the Bangladesh Energy Regulatory Commission (BERC) Act, 2003, which empowered the power and energy ministry to set fuel and electricity prices under special circumstances.

Previously, prices could only be fixed by BERC through a process that included public hearings.

The interim government has already said they will not hike energy prices just by executive orders, skipping the public hearing.

However, energy sector experts pointed out numerous other areas that need to be reworked.

For example, the Integrated Energy and Power Master Plan (IEPMP) should be revised as there are faulty energy and power demand forecasts. It also encourages coal exploration and promotes LNG imports.

They further urged the government to review all procurement and bidding processes, phase out inefficient quick rental power plants, and prioritise the identification and assessment of renewable energy resources.

Analysts recommended forming a probe body to identify anomalies in pre-paid meters.

They also suggested restructuring the Power, Energy and Mineral Resources Ministry to empower the Sustainable and Renewable Energy Development Authority and make it the sole authority to implement energy transition issues.

Some other proposals include establishing an 'Energy Sector Reform Commission', removing cadre officers from the managing bodies of energy-related companies, replacing top officials in power sector companies, limiting the ministry's role to policy regulation, ensuring government companies provide services without profit motives, and identifying and prosecuting corrupt officials.

Digitalising revenue collection

One repeated recommendation is to reform the National Board of Revenue through the establishment of two separate wings – one for policymaking and another for tax, customs duty and VAT collections.

Other suggestions include expanding the tax net, enabling online submission of income tax returns and fully digitalising the taxation process.

Zahid Hussain, a former lead economist of the World Bank's Dhaka office, said the biggest challenge is to increase the tax-GDP ratio, which stands at slightly less than 9 percent, to around 15 percent, which is typical of countries similar to Bangladesh's level of income.

"This is daunting, even in the medium term of 5 to 7 years, considering our history in revenue mobilisation. Most of the required increases will have to come from tax revenues," he said.

Rate hikes are extremely difficult when inflation is close to double digits and food inflation is even higher. The cost of doing business is also already excessive. So, the biggest challenge is to reduce leakage of tax revenues to third parties such as tax officials and expand the tax net, he said.

The budget for the current fiscal year reduced several tax exemptions and allowances, increased value-added tax (VAT) rates to the 15 percent statutory rate for several products, added a 30 percent slab for personal income exceeding Tk 20 lakh per annum and increased rates on select products like tobacco.

These must be maintained and implemented as the interim government revisits the budget.

The interim government has a unique opportunity to immediately reform tax policies and curb activities that create opportunities for "negotiation" and corruption.

The government has a commitment under an International Monetary Fund (IMF) programme to finalise the draft Medium and Long Term Revenue Strategy (MLTRS) along with a time-bound implementation framework by the end of December this year.

"We expect the MLTRS to come up with actionable measures to widen the tax net, improve compliance, reduce leakage and provide a road map for the digitalisation of tax collection," Hussain added.

Prioritising efficiency in public finance

Five key principles have been identified that should be taken into consideration for public finance management – enhancing the fiscal space, prioritising expenditure, prioritising foreign financing, ensuring good governance, and protecting the interests of vulnerable and disadvantaged groups.

Any attempt to enhance the fiscal space should focus on generating more resources as well as sealing the leakages.

Austerity measures must be maintained in a way that their impact on the social safety net as well on health, education, agriculture, and small and medium enterprises becomes less burdensome.

Exit plans will need to be formulated in the cases of fiscal incentives currently being provided.

Considering the declining foreign exchange reserve situation, the government should prioritise implementing all foreign-funded projects under the Annual Development Programme.

It should place higher priority on implementing projects that are close to completion.

Promoting competition to protect consumers

While monetary policy is an important instrument in reducing price levels, fiscal trade and agricultural policies are also crucial in addressing the challenges of inflationary pressure.

To reduce price levels, syndicates that control the supply of certain products should be dismantled, and all types of extortion should be quelled.

At the same time, the Bangladesh Competition Commission should be strengthened. This can be accomplished by developing a database, regularly monitoring dominant market players, investigating manipulation and taking proper action against delinquents.

The commission should adopt a strong stance against cartels and a zero-tolerance policy towards collusive practices.

Furthermore, the government can reduce tariffs on essential items. However, it must ensure that the benefits of such tariff reductions are passed on to the consumer in the form of reduced prices.

Experts also suggested that the government provide direct cash support and enhance social protection for low-income families so that those experiencing poverty can cope with higher price levels.​

 

[Saif]

US stands ready to help carry out reforms

The US has expressed strong commitment to work with the interim government, which sought support to rebuild the country, carry out reforms, and bring back money laundered by corrupt individuals.

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US stands ready to help carry out reforms
American delegation meets Yunus, holds talks on reforms, repatriation of laundered money, labour rights, Rohingya issue

A US delegation led by Brent Neiman, deputy under secretary for International Finance at the US Department of the Treasury, meets Chief Adviser Prof Muhammad Yunus at the state guesthouse Jamuna yesterday. US Assistant Secretary of State for the Bureau of South and Central Asian Affairs Donald Lu, left, was present. Photo: PID

The US has expressed strong commitment to work with the interim government, which sought support to rebuild the country, carry out reforms, and bring back money laundered by corrupt individuals.

Chief Adviser Prof Muhammad Yunus asked for the help when a US delegation met him at the state guest house Jamuna.

The delegation, led by US Treasury Department's Assistant Secretary Brent Nieman, praised Prof Yunus' leadership and said Washington would be happy to support his reform agenda.

The US officials said they were eager to offer technical and financial assistance.

Yesterday, the two countries signed an agreement under which the US would provide $200 million to Bangladesh as development support.

"Our delegation met Chief Adviser Professor Muhammad Yunus, affirming our dedication to fostering inclusive economic growth, institution building, and development to benefit the people of Bangladesh," the US embassy said on its Facebook page.

"As Bangladesh looks to chart a more equitable and inclusive future, the US stands ready to support those efforts."

This is the first visit by any US delegation after the formation of the interim government.

Officials concerned said the visit is a reflection of a fresh start of the relationship as US-Bangladesh ties were strained during the Awami League regime.

Over the last few years, the US imposed sanctions on Rab and implemented a policy under which Bangladeshis who would undermine democracy would be denied US visas.

Donald Lu, US assistant secretary of state for South Asia; Brendan Lynch, assistant US trade representative; Anjali Kaur, deputy assistant administrator; and Jerrod Mason, a director of the US Treasury Department, were in the delegation.

The delegation on Saturday met business leaders.

Yesterday, it called on Yunus, Foreign Adviser Touhid Hossain, Finance Adviser Salehuddin Ahmed, and Bangladesh Bank Governor Ahsan H Mansur.

It also had a meeting with Foreign Secretary Jashim Uddin at the state guesthouse Padma, where secretaries of the Economic Relations Division, ministries of commerce, labour, home, Bangladesh Bank representatives, and the chairman of the NBR were present.

Yunus, during the meeting, said his administration has moved quickly to "reset, reform, and restart" the economy, initiate reforms to the financial sectors, and fix institutions, according to a statement of the Chief Adviser's Office.

He said six commissions have been formed in an effort to prevent vote rigging, reform the judiciary, the police, civil administration, the anti-graft agency, and amend the constitution.

Prof Yunus said the government is committed to getting back the stolen assets siphoned off by corrupt individuals. "We were in an ocean of corruption," he said.

Prof Yunus said the student-led revolution has ushered in a new era of hope in Bangladesh. "It is a very important time for us and a significant moment in our history."

During the hour-long meeting, financial and economic reforms, investment, labour issues, and the Rohingya crisis were discussed.

Prof Yunus presented a book on the graffiti of Bangladesh to the US delegation. The book has photos of some of the finest work done during the student-led uprising in July-August on the walls of Dhaka and other cities and towns.

FINANCIAL, REVENUE SECTOR REFORMS

After the meeting, Foreign Secretary Jashim Uddin told the media that the US delegation prioritised reforms to financial and revenue sectors during the discussion.

He said Dhaka would take expert help from the US as Bangladesh Bank was discussing specific measures to bring back laundered money.

The two sides also discussed trade facilitation, GSP facility, and US International Development Corporation.

"We have informed them of the reforms made to the labour sector. They took note of those and appreciated the progress made. They will continue the discussion on labour reforms."

The US suspended GSP facility following the Rana Plaza collapse in 2013.

It did not grant financing under the DFC facility, which mandates improvement of labour conditions.

However, there was no specific discussion on GSP or DFC finance yesterday.

Asked about withdrawal of sanctions against Rab, Jashim said they updated the delegation on Rab reforms and that Dhaka would continue to discuss the matter.

The US side brought up the recent developments in Myanmar and the humanitarian assistance for the Rohingyas in Bangladesh.

In the last few months, about 15,000 Rohingyas have entered Bangladesh, creating new concerns for Dhaka.

"We spoke about eliminating the root causes of the Rohingya crisis … ," he said.

Prof Yunus will be attending the UN General Assembly for five days from September 22.

Asked if there would be any bilateral meeting between US President Joe Biden and Prof Yunus on the sidelines, Jashim said if the schedule is adjusted, there may be such a meeting.

He said they presented the plans for reforms and discussed how the US can help in the process.

"The US side got an idea of these and eventually, the two countries will advance cooperation in various stages."

The US is Bangladesh's largest foreign direct investor (FDI) and the largest export country destination.

In 2022-23, US FDI in Bangladesh was $261 million. Last year, Bangladesh's export to the US was $7.72 billion and imports were worth $2.04 billion.

Analysts said the US can support Bangladesh in various ways, like giving privileges for Bangladesh's export to the US market, funding reforms, and investing in Bangladesh.

MEETING WITH BB GOVERNOR

Bangladesh Bank Governor Ahsan H Mansur sought financial support from the US for the ongoing reforms to the banking sector when the delegation met him at the central bank.

During the meeting, the US team discussed macroeconomic issues, including inflation and GDP growth, money laundering, bad loans, and reforms.

Bangladesh Bank Spokesperson Husne Ara Shikha shared the meeting details while talking to The Daily Star over phone.

Shikha said the US team wanted to know about the challenges of reforming the banking sector. The governor responded by saying there were no challenges, unless there was an untoward political issue in future.​

 

[Saif]

From vision to action: Prof Yunus’s reform agenda for Bangladesh

Yunus and the IG must be cautious not to fall into the political traps that can derail even the most well-intentioned leaders

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From vision to action: Prof Yunus’s reform agenda for Bangladesh

Prof Muhammad Yunus, chief adviser of the interim government, delivers an address to the nation on September 11, 2024. PHOTO: PID

Prof Muhammad Yunus's transition from Nobel laureate to reformist chief adviser continues to capture the nation's attention. In his August 25 speech, Yunus outlined an ambitious vision for a "new Bangladesh" centred on unity, transparency, and democratic renewal. While his message resonated with many, it also left citizens asking: "Can he turn words into action?" Fast forward to September 11, and Yunus seems determined to answer that question. His latest address laid out specific reforms, marking the beginning of a long journey toward real change.

Diplomacy and governance today go far beyond traditional bureaucratic processes, and Prof Yunus stands at the forefront of this shift. Through Grameen Bank, he demonstrated how NGOs can drive powerful social and economic change where governments often struggle. This blend of engineering diplomacy—using pragmatic, principled solutions paired with negotiation—is a skill Yunus and the IG can now bring to create a new Bangladesh.

However, running a government, unlike an NGO, is a different challenge. It requires navigating political complexities, balancing competing interests, and making compromises that NGOs can often avoid. While his outsider perspective and grassroots experience offer fresh ideas, Yunus and the IG must be cautious not to fall into the political traps that can derail even the most well-intentioned leaders.

Politics requires balancing various factions, managing entrenched bureaucracies and interest groups, and dealing with opposition parties. The IG must ensure that reforms are not seen as bypassing democratic processes or alienating key political actors. The IG's ability to lead will depend on their skill in coalition-building and maintaining legitimacy in the eyes of both political elites and the public. Members of the IG need to be cautious about becoming entangled in the very political games they seek to transcend—where loyalty, political capital, and power dynamics can overshadow the principled pragmatism they aspire to attain. For the IG, the key lies in harnessing the strengths of modern engineering diplomacy while staying grounded in the political realities of governance. They must strike a delicate balance between being innovative reformers and astute politicians, ensuring that the vision of a new Bangladesh can survive the political process without being compromised by it.

In his August 25 speech, Prof Yunus's metaphor of the nation as a family resonated widely. The idea was simple yet powerful: Bangladesh must come together as one to heal from years of corruption and mismanagement. However, as the days passed, some began to wonder if this metaphor oversimplified the challenges that lay ahead. Calls for unity, while necessary, are not enough to address the deep structural flaws embedded in the country's political and economic systems.

In his September 11 speech, Prof Yunus pivoted from this metaphorical language to concrete steps. He announced the formation of six commissions aimed at addressing fundamental sectors—electoral system, police, judiciary, anti-corruption, public administration, and constitutional reform. This shift from a unifying metaphor to specific structural reforms is crucial. It signals a move from aspirational rhetoric to actionable governance.

In my previous article, I noted that the public had received Yunus's initial speech with optimism, but also caution. Many were asking, "Can he deliver?" This scepticism was not unwarranted, especially in a country where promises of reform have often been marred by inefficiency and corruption. Yunus responded directly to this scepticism in his September 11 speech by providing a clear roadmap for his reforms. The six commissions represent a pragmatic approach to institutional reform, offering a structured and transparent process for addressing corruption, inefficiency, and structural flaws. The commissions are not just symbolic gestures—they are tasked with delivering results within three months, after which consultations with political parties, students, and civil society will take place.

While Prof Yunus's move toward structured reform is promising, significant challenges remain. The timeline for the commissions—just three months—raises concerns about whether there will be enough time for thorough analysis and genuine consultation. The success of these efforts hinges on the cooperation of entrenched political and bureaucratic forces, many of whom have thrived in the current system.

A critical issue is the lack of representation from ordinary citizens. Despite the student-public-led uprising that ousted the previous regime, decision-making remains concentrated among the educated elites and privileged classes, with limited input from the broader public. To avoid past regime failures, the IG must include all relevant stakeholders. This means going beyond the elites to include voices from four key groups: the knowledge community, the political community, the resource community, and most importantly, the affected community.

As I discussed in an earlier piece, genuine reform would require a collective effort of all stakeholder groups. The affected community, in particular—those directly impacted by decisions—cannot be sidelined. Their involvement is crucial for creating reforms that are not only theoretically sound but also practical and just. If the IG fails to include these diverse voices, there's a real risk of falling into the same elitist traps the uprising sought to dismantle. Prof Yunus has signalled the need for inclusivity, reflecting the ideals that emerged from the student-public uprising, but translating this vision into reality will be the true test. Rebuilding trust in the nation's institutions is possible, but only if the reforms produce tangible results that reflect the input of all four stakeholder communities.

Over the past month, the IG has made several key decisions shaping Bangladesh's future. While some decisions may have sparked debate, there is widespread support for most of the IG's initiatives. However, one decision that has raised serious concerns is the appointment of Tajul Islam as chief prosecutor of the International Crimes Tribunal (ICT). Many view this choice as highly problematic, given his past association with the defence of Jamaat-e-Islami leaders convicted in controversial trials at the ICT. Critics argue that this appointment signals a potential return to politicised justice rather than a commitment to fair and independent trials, undermining the very goals of reform the IG aims to achieve. If the IG is to maintain the public's trust and avoid the pitfalls of past regimes, it must ensure appointments reflect the principles of impartiality, accountability, and fairness.

Earlier, I likened this journey to the metaphorical road from Tetulia to Teknaf—a long path toward democratic and institutional reform. The September speech has laid the groundwork, with the commissions as the vehicles to move forward. However, the real challenge isn't just starting the journey; it's staying the course. The IG has set Bangladesh on the right path, but success will depend on sustained public engagement, transparency, and a commitment to long-term change.

Prof Yunus's September 11 speech marks a critical step in turning vision into reality. The challenges ahead are immense, but the potential for meaningful reform is unprecedented. Now, the IG must fulfil its promises, ensuring that the journey from Tetulia to Teknaf becomes a genuine transformation for the people of Bangladesh. This transformation must balance nyay (ideal justice) and niti (procedural justice). While nyay sets the values, niti ensures practical execution. As we move forward, autonomy, inclusivity, accountability, and justice should guide our government toward a more just and equitable future.

Shafiqul Islam is director of Water Diplomacy, and professor of civil and environmental engineering and water diplomacy at the Fletcher School of Law and Diplomacy at Tufts University, US.​

 

[Bilal9]

World Bank to lend additional $2bn to Bangladesh for critical reforms​

The extra lending would raise the amount of soft loans and grants to about $3 billion in FY25
https://www.dhakatribune.com/358712


World Bank Country Director Abdoulaye Seck speaks about the new assistance with Chief Adviser Prof Muhammad Yunus at the State Guest House Jamuna in Dhaka on Tuesday, September 17, 2024.
Photo: Courtesy
Tribune Desk
Published : 17 Sep 2024, 04:03 PM
Updated : 17 Sep 2024, 04:03 PM

The World Bank is committed to increasing lending to Bangladesh in this fiscal year to help the reform agenda of the interim government.

World Bank Country Director Abdoulaye Seck spoke about the new assistance on Tuesday when he met Chief Adviser Prof Muhammad Yunus at the State Guest House Jamuna in Dhaka.

Seck said that the World Bank could mobilize about $2 billion in new financing during the ongoing fiscal year to support critical reforms, flood response, better air quality and health.

"We would like to support you as fast as possible and as much as possible," Seck said, adding that the bank would support the critical financial needs of the country.

He said that in addition to the new commitments, the multilateral lender would repurpose about an extra one billion dollars from its existing programs in consultation with the government in response to the calls for support by the chief adviser to all development partners of Bangladesh.

Seck said the extra lending would raise the amount of soft loans and grants the World Bank would be giving to Bangladesh this fiscal year to about $3 billion once the funds from the existing projects are repurposed.

The World Bank country chief said the completion of the reforms would be "critically important" for Bangladesh and its young people, including the two million people who are joining the job market every year.

The chief adviser has told the World Bank country head that the bank must have flexibility to fund Bangladesh's reforms and help restart a new journey after 15 years of "extreme misgovernance."

"Out of these ashes, we have to build new structures. We need a big push, and we have to focus on the dreams of the students," he said.

“I will suggest, help us. Be a part of our team,” said the chief adviser.

Prof Yunus asked the World Bank to lend its technical support to recover billions of dollars of stolen assets siphoned off from Bangladesh by corrupt individuals during Sheikh Hasina's 15-year-long dictatorship.

"You have the tech to bring back stolen assets," Yunus said, adding Bangladesh would also need the bank's expertise to build "a zero-corruption Bangladesh".

The World Bank country chief has agreed to help Bangladesh bring back the stolen money. "We are happy to help you," Seck said.

He said the bank would also like to help Bangladesh with data transparency, data integrity, digitalization of tax collection, and financial sector reforms.

Prof Yunus said Bangladesh cannot afford to lose this once in a lifetime opportunity to fix its institutions and undertake major reforms.

"Once we lose it, it will never come back," he said.

Seck offered condolences for the martyrs of the July-August student-led uprising.

He said he was impressed by the graffiti and murals painted by young people on Dhaka's walls. "In 30 years of my career, I've never seen it anywhere," he said.

"We need to empower them," Seck said.

Source: https://www.dhakatribune.com/358712

 

[Bilal9]

 

[Saif]

American trade platforms demand reforms to protect labour rights

The American Apparel & Footwear Association (AAFA) and Fair Labor Association (FLA) have urged the interim government of Bangladesh to take critical and long-lasting steps towards reforms for furthering worker rights of international standards. .The AAFA is an American trade association re

www.thedailystar.net

American trade platforms demand reforms to protect labour rights

American trade platforms recommended that the government of Bangladesh swiftly adopt a transparent and regular annual minimum wage review mechanism for the garment, footwear, and travel goods industries. Photo: Star/file

The American Apparel & Footwear Association (AAFA) and Fair Labor Association (FLA) have urged the interim government of Bangladesh to take critical and long-lasting steps towards reforms for furthering worker rights of international standards.

The AAFA is an American trade association representing apparel, footwear and other sewn products companies, and their suppliers, who together have an annual turnover of $470 billion.

The FLA is an international network of companies, universities, and civil society organisations collaborating to promote human rights at work.

The two platforms in a letter sent to Professor Muhammad Yunus, chief adviser to the interim government, on Tuesday urged for resolving three important issues relating to labour rights in Bangladesh.

The first was for the immediate release of those who remain under arrest from the Fall 2023 protests over the minimum wage and withdrawal of all criminal charges against them.

"We further urge the interim government to end the threat of arrest for thousands more workers related to the Fall 2023 minimum wage protests by immediately cancelling the 'First Information Reports' related to those workers," according to the letter.

Steve Lamar, president and chief executive officer (CEO) of AAFA, and Jeff Vockrodt, president and CEO of FLA, also called upon the government to drop and resolve criminal charges brought against labour organisers.

They include Babul Akhter, general secretary of the Bangladesh Garments and Industrial Workers Federation, and Jewel Miya, a labour organiser with Bangladesh Independent Garment Workers Union Federation, who were both arrested in 2023 for advocating for higher wages.

Secondly, they recommended that the government this year swiftly adopt a transparent and regular annual minimum wage review mechanism for the garment, footwear, and travel goods industries.

This should involve all stakeholders – employers, the government, and workers (independent unions, worker groups/representatives), they said.

In contrast to the current five-year review, this new mechanism will enable the government to better respond to current economic circumstances without imposing sudden, huge burdens on the industry or workers, they added.

Moreover, it will promote short and long-term health and stability of the Bangladeshi garment, footwear, and travel goods industry, said the duo.

"We also encourage the government to consider giving guidance to employers to pay missed wages to workers for the four days missed during the declared holiday," they said.

Thirdly, the AAFA and the FLA urged to promote harmonious industrial relations and prevent future unrest.

"We urge the interim government to quickly restart tripartite discussions on the Bangladesh labour act and bring the law into line with international labour standards," they said.

Those reforms should simplify the process for the creation and registration of independent trade unions, including a significant reduction of the registration threshold, they said.

"We also urge the government to increase penalties for unfair labour practices and extend full labour rights to workers in the export processing zones (EPZ)," they said.

"We believe improving worker rights goes hand in glove with promoting a successful Bangladesh garment, footwear, and travel goods industry now and in the years to come," the letter also said.

The trade bodies appreciated Yunus's comments both in support of the garment, footwear, and travel goods industry, and in support of the workers who are the backbone of that industry.

His comment that Bangladesh should reform local labour laws to align with the ILO standards is very welcome, they said.

They said as Yunus was shepherding Bangladesh through this transition and into a new era, they look forward to working closely with him to ensure that both the protection of workers' rights and growth of the industry are paramount.

The leaders also said they fully recognise the important place that Bangladesh holds as the third-largest supplier of garments to the US as well as a fast-growing supplier of footwear and travel goods.

The favourable trade partnerships and spirit of collaboration that underpin these markets has brought shared prosperity and economic growth, the letter also said.​

 

[Saif]

Reforming civil bureaucracy

The formation of six reform commissions by the present interim government, including one for public administration, is a step in the right direction. In fact, it was long overdue. However, scepticism is there about the success of these efforts, given the bureaucracy's historical resistance to chang

thefinancialexpress.com.bd

Reforming civil bureaucracy
Mir Mostafizur Rahaman
Published :
Sep 18, 2024 22:03
Updated :
Sep 18, 2024 22:03

The formation of six reform commissions by the present interim government, including one for public administration, is a step in the right direction. In fact, it was long overdue. However, scepticism is there about the success of these efforts, given the bureaucracy's historical resistance to change. Bangladesh, which inherited its bureaucratic system from British colonial rule, has long struggled with a civil service that is often seen as an impediment to both development and democratic governance. The current political environment presents a rare opportunity to dismantle this archaic system and introduce a more accountable, modern bureaucracy.

Since gaining independence 53 years ago, Bangladesh has established at least 16 commissions and committees aimed at creating a merit-based and service-oriented civil administration. Despite these efforts, the majority of the recommendations have been ignored. This pattern of inaction underscores a deep-seated issue: the bureaucracy's reluctance to reform itself. Civil servants, especially those in higher positions, often perceive reforms as a threat to their status, privileges, and prospects for promotion. Consequently, these entrenched interests have successfully obstructed meaningful change. Furthermore, successive governments have shown little inclination towards building a strong and effective civil service, often preferring to maintain the status quo for their own political ends.

Political patronage has exacerbated the problem, leading to the promotion of favoured individuals over those with proven skills and merit. This practice has resulted in a civil service that is often staffed by individuals more loyal to political benefactors than to the principles of good governance. Such favouritism not only demoralizes competent officers but also stifles innovation and accountability within the bureaucracy. As a result, the civil service has become a barrier to development rather than an enabler of progress.

Amid this bleak landscape, the current political scenario offers a glimmer of hope. There is a growing consensus across the political spectrum that the current bureaucratic system is outdated and in dire need of reform. The emergence of a bipartisan political will to address these issues could pave the way for the establishment of a modern, transparent, and accountable bureaucracy. However, for reforms to succeed, they must go beyond superficial changes and address the fundamental flaws within the system.

Previous attempts at reform have had limited impact. While some measures, such as increasing salaries, enacting the Civil Service Act of 2018, and extending the retirement age from 57 to 59 years, have been implemented, they have done little to change the underlying culture of the civil service. These efforts have focused more on placating civil servants rather than transforming the system into one that prioritizes efficiency, merit, and public service.

First and foremost, a merit-based recruitment and promotion system must be established. This would ensure that positions within the civil service are filled by individuals with the necessary skills, knowledge, and dedication to public service. Such a system would also motivate civil servants to improve their performance, knowing that promotions and career advancements are based on merit rather than political connections.

Secondly, there must be a zero-tolerance policy towards corruption within the civil service. This requires not just strong anti-corruption laws but also the establishment of independent oversight bodies with the authority to investigate and act on allegations of misconduct. Without addressing the pervasive corruption within the bureaucracy, any reform efforts are likely to be undermined.

Additionally, there is a need for a cultural shift within the civil service. The focus must move from merely following procedures to achieving results. Civil servants should be trained and encouraged to adopt a service-oriented mindset, where the primary objective is to serve the public effectively and efficiently.

While the road to reforming Bangladesh's civil bureaucracy is fraught with challenges, it is not an impossible task. The current political climate, marked by a renewed interest in governance reforms, provides a window of opportunity to initiate change. However, this will require strong political will, a clear vision for a modern civil service, and the courage to confront entrenched interests.

In conclusion, the success of these reform commissions will depend on their ability to break free from the shackles of past failures and implement measures that address the core issues of merit, accountability, and corruption within the civil service. Only then can Bangladesh hope to have a bureaucracy that serves as a catalyst for development rather than an impediment.​

 

[Saif]

Carrying out reforms: Commissions to file reports by December 31

The reform commissions declared by the interim government will start work on October 1 and submit their reports by December 31, said Asif Nazrul, the law adviser.

www.thedailystar.net

Carrying out reforms: Commissions to file reports by December 31

Photo: TV Grab

The reform commissions declared by the interim government will start work on October 1 and submit their reports by December 31, said Asif Nazrul, the law adviser.

After that, consultations will be held with the political parties and other stakeholders, he said at a press briefing yesterday after the first meeting with the heads of the six commissions.

Muhammad Yunus, the chief adviser to the interim government, presided over the meeting that was attended by advisers Rizwana Hasan, Ali Imam Majumder, Nazrul and Adilur Rahman Khan and Mahfuj Alam, special assistant to the chief adviser.

"We discussed how the commissions will work, their terms of reference, how the commissioners will be appointed," Nazrul said, adding the reports would contain recommendations.

In the second phase, under Yunus's leadership, the advisers will hold consultations with the political parties, experts, professional bodies, student bodies and the general public.

"We will try to ensure that people's expectations are reflected in what we do. The expectation of the students who led the mass upsurge was not limited to only good elections but reforming the state and establishing true democracy so that no fascist can come to power in Bangladesh," Nazrul added.

The commission will be fully independent, Alam said.

The people of Bangladesh were deprived of their democratic rights for long periods, said Badiul Alam Majumder, who will leader the Election System Reform Commission.

"We need some important reforms of the state institutions. With that objective, the commission heads were appointed. In the first meeting today, we got some clear ideas of who will be invited to join as commissioners. How we will work as a commission was basically discussed," he said.

Asked how long it will take to complete the work of the commissions, Nazrul said some of the proposals that the commissions will make will be implemented in the mid-term and the others in the long term.

After Yunus's return from the UN General Assembly, the Election Commission will be reconstituted.

More commissions will also be formed to reform the education and health sectors.

"We will not only be confined to reforms thoughts but also go for implementation," Nazrul said, adding that accountability and transparency of the working of the commissions will also be ensured.

Asked how the reformed constitution will be accepted as there is no parliament, Nazrul said the constitutional reforms commission will be responsible for this.

"They will hold widespread consultation with the people and decide on the matter."

Asked about former Prime Minister Sheikh Hasina's extradition from India, he said Bangladesh has a treaty with the neighbouring country.

"As per the treaty, Bangladesh can seek extradition of anyone convicted -- whoever he or she is."

The prosecutors of the International Crimes Tribunal have already been appointed and there is other progress made for trying the ones accused of crimes against humanity during the July protest.

"Soon, the trial process will begin and then we will seek extradition of the former Prime Minister from India," Nazrul added.

Justice Shah Abu Naim Mominur Rahman will lead the Judicial Reform Commission, Abdul Muyeed Chowdhury the Public Administration Reform Commission, Safar Raj Hossain the Police Administration Reform Commission, Iftekharuzzaman the Anti-Corruption Reform Commission and Ali Riaz the Constitutional Reform Commission.​