[🇧🇩] White Paper on the Economy during Hasina's tenure

[Saif]

Date of Event: Jan 19, 2025 Source : https://www.thedailystar.net/business/news/no-action-taken-based-white-paper-3802251

No action taken based on white paper
Economists say govt preference for indirect taxes concerning

The interim government has not taken any of the measures recommended by the white paper on the state of the Bangladesh economy even after a month and a half of the report's submission, said economists yesterday.

"Many people ask about the future actions regarding the white paper -- this question evokes a sense of helplessness due to uncertainty," said Debapriya Bhattacharya, who led the 12-member committee that prepared the white paper.

Bhattacharya's comments came at a symposium titled "White Paper and Thereafter: Economic Management, Reforms, and National Budget", held yesterday at the Bangabandhu International Conference Centre.

"Our aim is to ensure that the government incorporates the white paper's recommendations into its policymaking," he added.

The white paper committee submitted the report one and half months ago, but the government has no programme yet that will show that it owns the paper, said Selim Raihan, executive director of the South Asian Network on Economic Modelling.

"There is no widespread discussion too -- it remains a big question to me," he added.

Regarding the current economic situation, Bhattacharya criticised the interim government for "inconsiderately" increasing value-added tax.

If the government intends to collect taxes effectively, it should gradually shift its focus to direct taxes.

"We have not seen any plan to collect direct taxes. Raising the VAT indicates a preference for indirect taxes over direct taxes, which is concerning," said Bhattacharya, also a distinguished fellow at the Centre for Policy Dialogue.

Meanwhile, the country's growth rate is slowing and the energy situation is expected to worsen.

Although the interim government has undertaken several initiatives in the banking and energy sectors, the efforts are ad hoc and lack coordination, Bhattacharya said.

Corruption in Aman paddy collection remains unchanged, with farmers still not receiving fair prices.

Food stock is not increasing in government warehouses even though the government has identified it as a means to tame inflation.

"While the government may increase allocations for education and healthcare, it remains unclear how these funds will be utilised or who will benefit from them," Bhattacharya added.

Commerce Adviser Sk. Bashir Uddin defended the interim government's decision to increase VAT, stating that VAT is crucial in an unregulated market where tax evasion is prevalent.

"Relying on direct taxes may be effective for developed economies. However, for an unregulated market like ours, indirect taxes are critically important."

Regarding the family card programme under the Trading Corporation of Bangladesh (TCB), Bashir said digitisation uncovered about 37 lakh fake cardholders.

He suggested discussing whether the government should raise the prices of TCB products to expand its beneficiaries.

Commenting on the high interest rates, he said most banks reported substantial profits in 2024 due to higher interest income.

"It is clearly unethical to earn such high profits while businesses are struggling," he added.

Dissecting the notion of the fastest-growing economy, Zahid Hussain, a former lead economist at the World Bank's Dhaka office, said GDP growth estimates averaged 4.2 percent annually between fiscal 2008-09 and 2018-19 and not 7 percent as officially reported.

He attributed the disparity to underinvestment, a narrow export base, low human capital and resource misallocations, which caused growth trends to diverge from fiscal 2013-14 onwards.

With low revenue and forex earnings growth, the country became increasingly dependent on debt for its annual development programme. However, the development projects were marred by corruption and mismanagement, he said.

"Consequently, borrowed money (both in dollars and taka) ultimately moved into the accounts of cronies at home and abroad via ADP projects, burdening current and future generations with debt."

The path to reviving the economy depends on sound policies and political commitment to economic reforms. However, the cost of inaction is becoming increasingly evident, Hussain said.

Umama Fatima, spokesperson of the Anti-Discrimination Student Movement, criticised the bureaucracy for supporting the previous government, with most bureaucrats avoiding jail time.

While the public is suffering from high inflation, bureaucrats are continuing to receive dearness allowances, she said, while stressing the need for increased government support for research and development.

In another session, Anu Muhammad, a former economics professor at Jahangirnagar University, said Sheikh Hasina's government received support from bureaucrats, business people and international agencies like the World Bank and the Asian Development Bank, which propagated the narrative of the country's "development miracle".

"They must take responsibility," he said.

During her tenure, institutional degradation was rampant. The interim government must take steps to restore institutional integrity.

"We do not want the white paper to be ignored in policymaking," he added.

While it is possible to recover the siphoned funds, the process is challenging, said Mustafizur Rahman, distinguished fellow at CPD.

Although the interim government is making efforts to recover the funds, resources must be allocated for special prosecution, forensic audits, staffing and data acquisition.

"These steps are crucial for proving cases in local courts before pursuing them internationally."

Rahman also recommended ensuring the independence and autonomy of the Implementation, Monitoring, and Evaluation Division to prevent further corruption in ADP projects.

Sayema Haque Bidisha, pro-vice Chancellor of Dhaka University; Ferdous Ara Begum, chief executive officer of Business Initiatives Leading Development; Owasis Parray, senior economic adviser at UNDP Bangladesh; and M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh, also spoke.​

 

[Saif]

Debapriya doesn't know what govt will do with recommendations made in White Paper

Chief of the Committee on the White Paper on the State of Bangladesh's Economy Dr Debapriya Bhattacharya said on Saturday that the formulators of the paper felt helpless when asked what the interim government would do with it. "What will be done with the Whitepaper, we, the formulators, felt helpl

thefinancialexpress.com.bd

Debapriya doesn't know what govt will do with recommendations made in White Paper
UNB
Published :
Jan 18, 2025 21:20
Updated :
Jan 18, 2025 21:22

Chief of the Committee on the White Paper on the State of Bangladesh's Economy Dr Debapriya Bhattacharya said on Saturday that the formulators of the paper felt helpless when asked what the interim government would do with it.

"What will be done with the Whitepaper, we, the formulators, felt helpless. We felt a bit uncertain what is actually happening with the recommendations and analysis which has been put forward in the White Paper," he said.

Speaking at a symposium titled 'White Paper and Thereafter: Economic Management, Reforms and National Budget' at the Bangabandhu International Conference Centre (BICC), Dr Debapriya expressed these feelings.

The eminent economist of the country also mentioned that they have even seen that many in the government are talking with a tone of uncertainty regarding this paper.

"Many times they did not even say anything encouraging," he added.

The committee was formed on August 28 last year for the preparation of a comprehensive "White Paper" on the state of Bangladesh economy.

The committee was chaired by Dr Debapriya Bhattacharya, Distinguished Fellow at Centre for Policy Dialogue (CPD) and Convenor of the Citizen's Platform for SDGs, Bangladesh.

Other members of the committee are - Prof AK Enamul Haque, dean, Faculty of Business and Economics, East West University; Ferdaus Ara Begum, chief executive officer, Business Initiative Leading Development; Imran Matin, executive director, BRAC Institute of Governance and Development (BIGD), BRAC University; Dr Kazi Iqbal, research director, Bangladesh Institute of Development Studies (BIDS); Dr M Tamim, professor, Bangladesh University of Engineering and Technology (Buet) and former special assistant to the chief adviser (2008); Dr Mohammad Abu Eusuf, professor, Department of Development Studies, Dhaka University; Prof Mustafizur Rahman, distinguished fellow, CPD; Dr Selim Raihan, professor, Department of Economics, Dhaka University, and executive director, South Asian Network on Economic Modeling (Sanem); Dr Sharmind Neelormi, professor, Department of Economics, Jahangirnagar University; Dr Tasneem Arefa Siddiqui, former professor, Department of Political Science, Dhaka University, and founding chair, Refugee and Migratory Movements Research Unit (RMMRU); and Dr Zahid Hussain, former lead economist, World Bank Dhaka office and eminent columnist.

On December 1, 2024, the Committee submitted their report to the Chief Adviser Professor Muhammad Yunus.​

 

[Saif]

A White Paper that delves into grey areas

When the going gets tough, the tough gets going – and that exactly seems to describe the situation in Bangladesh at the moment. Things go from tough to tougher for the interim government, plagued with protests, pressure and a whole conglomeration of problems on its plate. But is it tough enough...

en.prothomalo.com

A White Paper that delves into grey areas
Dr Debapriya and his team had come up with a White Paper that delved into the grey areas hitherto swept under the carpet. This gave room for dissection, discussion and debate
Ayesha Kabir
Updated: 19 Jan 2025, 19: 05

TCB sells goods at subsidised price to 10 million family card holders Prothom Alo

When the going gets tough, the tough gets going – and that exactly seems to describe the situation in Bangladesh at the moment. Things go from tough to tougher for the interim government, plagued with protests, pressure and a whole conglomeration of problems on its plate. But is it tough enough to plough through this situation? That’s the question in the air nowadays, as the post-uprising high expectations are somewhat tempered with a general sense of trepidation.

It was such a sense of concern that seemed to underlay the symposium recently held on ‘White Paper and Thereafter’, centering economic management, reforms and national budget. But there was also a feel-good sense that businesspersons, academics, politicians, economists, social scientists, students, the other participants and audience could actually voice their apprehensions, vent their frustrations, offer both bouquets and brickbats with equal aplomb, without ending up under the proverbial guillotine.

The day-long event threw up much food for thought and the erudite speakers offered almost forensic analysis of the ‘White Paper on the state of the Bangladesh economy’ prepared by the committee under leadership of Dr Debapriya Bhattacharya. More importantly, they focussed on the thereafter, the ‘what next’ conundrum.

The veteran economist Professor Rehman hit the crux of the problem when he said we haven’t even diagnosed the problems yet. Having been though a malfunctioning and non-functioning regime for fifteen years, the economy had certainly been impacted by debt default, crony capitalism and so on, but the problem was much deeper. Default had been integrated in the business culture. His advice to the interim government was to make best use of the time to come up with prospective solutions. Half-jokingly, he questioned Mirza Fakhrul Islam Alamgir why they were in such a hurry for the election. He said you’ll face a massive amount of problems, why not let the interim government sort things out first?

The BNP secretary general Mirza Fakhrul Islam Alamgir exuded confidence, his characteristically smiling countenance intimating, “let the politicians do the job of the politicians.” He did point out that his party from two years ago had been touting state repairs, reforms and other changes as contained in their 31 points. He was very upbeat about political reforms and economic reforms, and seemed revved up to meet the public aspirations for change.

That was how the symposium ended, on a note of camaraderie, and kudos goes to Dr Debapriya and team for getting together such a galaxy or personalities to delve into the nitty-gritty of the country’s economy and the way ahead.

There was no sweet coating of the bitter pill that the last government left us to swallow. There was criticism, quite harsh at times, responses, discussion and debate. Debapriya said the interim government had successfully exposed the malfeasance of the past government and the magnitude of damage it had done to the economy. The task was to stabilise the macro-economy and come up with an effective reform agenda. Deftly conducting the discussions, he prodded the speakers to go beyond their prepared presentation, which left us laypersons a little wiser and the experts with much fodder to ponder over.

In his presentation, economist Dr Zahid Hussain took up the task of dissecting the myth of the “fastest growing” economy, pointing out that the growth estimates based on the correlates averaged 4.2 per cent annually during the FY09-19 period, compared with the 7 per cent average reported officially. Among the reasons for the decline in the state of the economy were global supply bottlenecks, misguided policies, accelerated capital flight, political uprising, political disruptions and floods.

Dr Hussain felt inaction of the government in addressing the economic problems would have a high cost and so the way forward would depend on policies (monetary, exchange rate, fiscal, banking, energy, business regulation, international trade, taxation, public expenditures, education and health); politics (commitment to economic reforms); and Nature (ability to cope with extreme weather events).

The institutional destruction is worse than the financial destruction and so the government needed to play a strong role in restoring the institutions Professor Anu Muhammad, former professor at Jahangirnagar University.

The former Member (Customs), National Board of Revenue, Md Farid Uddin, who is also on NBR reforms advisory committee, recommended good tax policy, a good reform policy for management and leadership, holistic and digitalised system for NBR and other regulatory bodies and, importantly, political commitment. And he echoed the sentiment high on the public mind – can’t VAT be decreased?

And perhaps more specifically echoing the mind of the business community, Syed Nasim Manzoor came down hard on the government, saying that in the present state of flux, consumer confidence was low and investor confidence was nil. Cost of doing business remained a bone of contention.

Dr M Masrur Reaz, chairman and CEO of Policy Exchange Bangladesh pointed out that there was no systematic investment promotion strategy and that market intelligence needed to be strengthened.

It was on a more optimistic, albeit cautiously optimistic, note that the commerce advisor Sheikh Bashir Uddin said, change is the manifestation of opportunity. That certainly reflected the interim government’s mantra of change and reform. He reminded us that we were floundering in accrued criminalised institutions and the government was forging ahead in its efforts to take the TCB programme to the marginalised poor in an effective manner and to address the immediate needs of the public. He made sense and had logical explanations, but unless his symposium speech is translated into food on the poor man’s plate, misgivings will linger on.

Coming to the vital sector of energy and power, Dr M Tamim, Vice Chancellor of IUB and former Professor of BUET, pointed out how during the previous regime, the power nexus had manipulated policy for corruption. Maximum illegal transaction took place through underhand dealing and there also had been geopolitical influence in project approval. The energy expert said that with BPDB being the single buyer, executioner, upstream regulator and producer, it was easily controlled and manipulated by the ministry and political masters. As to the way forward, he said that an evaluation of the current status and a prudent transition plan was required to ensure energy security. This included rigorous onshore/offshore exploration, restructuring power and energy sectors, emphasis on renewable energy, reduction of system loss, cross border trading and operational efficiency.

The interim government can at least start change, was economist Professor Anu Muhammad’s pragmatic stance. This former professor at Jahangirnagar University, he pointed out that Hasina’s government obviously had a support base and we need to keep an eye of the ‘development miracle’ vendors, the bureaucratic ‘black hole’. The institutional destruction is worse than the financial destruction and so the government needed to play a strong role in restoring the institutions. He was critical of the World Bank, ADB and IMF prescriptions which promoted a decrease in subsidies and an increase in prices.

Earlier in the event, Tasneem Siddiqui professor of political science at Dhaka University and founding chair of Refugee and Migratory Movements Research Unit (RMMRU), had also pointed out how the remittance from migrant workers totaled more than the IMF loan, yet the migrants faced the highest migration costs in Asia. She called for an increase in budget allocation for the sector.

Reiterating the interim government’s thrust, Professor Lutfey Siddiqui, Special Envoy on International Affairs to the Chief Advisor, said delivering quality service to the people is the aim and end of reforms, and reforms were the means to the end. He stressed on the need to change the fundamental culture of the way in which we work.

A lot more was said at the symposium with stalwarts and experts in the field such CPD’s Dr Mustafizur Rahman, SANEM’s Dr Selim Raihan, Adviser Sharmeen Murshid, foreign friends and many more, deliberating on the problems and the solutions. Dr Debapriya and his team had come up with a White Paper that delved into the grey areas hitherto swept under the carpet. This gave room for dissection, discussion and debate. Despite the differences and the difficulties that surfaced, one came away from the event with a sense of hope – the dark clouds had moved on and there were people out there looking out for a better Bangladesh.​

 

[Saif]

What was the point of a white paper on economy?

Take proper steps based on its recommendations

www.thedailystar.net

What was the point of a white paper on economy?
Take proper steps based on its recommendations

VISUAL: STAR

It is frustrating to know that more than a month and a half after the submission of the white paper on Bangladesh's economy, the government has yet to take steps based on its recommendations. This inaction—pointed out by the very man who led the 12-member committee that prepared what Chief Adviser Prof Yunus then called a "historic" document worthy of being taught in universities—not only questions the rationale for commissioning such a report but also risks deepening the present economic crisis. At a recent symposium, Dr Debapriya Bhattacharya also lamented the lack of critical discussions on this issue.

True, our economic problems did not emerge overnight, nor can they be resolved by the interim government alone. These issues stem from years of mismanagement, entrenched corruption, and systemic regulatory failures, particularly during the Awami League's 15-year rule. The 30-chapter, 400-page white paper—submitted on December 1—unearthed the scale of these problems in exhaustive detail. For instance, it revealed that a staggering $234 billion was laundered from Bangladesh between 2009 and 2023. Meanwhile, distressed assets in the banking sector soared to Tk 6,75,030 crore, leaving banks under-provisioned and vulnerable to financial shocks. At the stock market, trillions of taka were embezzled through fraud, manipulation of placement shares, and deceitful Initial Public Offering (IPO) processes.

The report attributed these regulatory failures to the influence of business conglomerates, bureaucrats, and politicians, showing how laws and regulations were "tailored and retrofitted" to serve vested interests. It also exposed the dire state of "technically bankrupt" and "illiquid" banks and how Bangladesh, lost in a data fog, "sleepwalked" into the middle-income trap. Beyond banking and financial mismanagement, the white paper also offered an in-depth review of the macroeconomic and fiscal situation, alongside key sectors like education, health, energy, taxation, mega projects, poverty, and inequality. The question is: what is the government doing about its recommendations?

Among its key proposals, one was to establish an independent prosecution body to pursue follow-up actions on the stolen funds. The committee also urged the government to formulate a two-year mid-term economic plan and a six-month short-term strategy. Yet, there is no indication that these recommendations are being taken seriously. Instead, despite the paper's critical assessment of the existing tax regime, the government has opted to raise value-added tax (VAT) and supplementary duty (SD) on over 100 products and services rather than boosting direct tax collection—suggesting a preference for short-term fixes over structural reforms. Equally concerning is the continued ad hoc approach to banking and energy sector reforms.

This has to change. We urge the government to take ownership of the white paper's findings and incorporate them into policy decisions. Given the enormity of our economic challenges, it must make the most of its limited time before elections to lay the groundwork for reforms while establishing discipline in macroeconomic management, as Prof Rehman Sobhan suggested at the symposium. The importance of phased, strategic action cannot be overstated.​