Country heads towards unethical economy: economists

Country heads towards unethical economy: economists

Speakers in a post-budget discussion on Monday said that the country was heading towards an unethical economy as corruption has been encouraged under political patronisation for vested quartets plundering power sector subsidy and bank loans.

The speakers comprising economists, parliament members and a retired bureaucrat also said failure to mobilise sufficient revenue due to misincentives and leakages put the government on verge of bankruptcy with the repayment pressure for debt service rising sharply.

Jointly organised by the Newspaper Owners’ Association of Bangladesh and the Editors’ Council at a city hotel three days after the announcement of the national budget for FY25, the speakers said reforms in banking sector and public as well as revenue administrations became imperative to overcome economic vulnerabilities worsening due to the prolonged shortage of dollar and a decade-high inflation.

Economist Wahiduddin Mahmud, also a former caretaker government adviser, said the new budget had been rendered a sacrificial lamb as it is given against backdrop of relentless corruption in the banking sector, capital flight and growing interest payment.

Most of the proposed budgetary measures including 6.5 per cent inflation unrealistic, he said.
Referring to reported illegal wealth and money smuggling by former police chief Benazir Ahmed, the noted economist said Bangladesh Financial Intelligent Unit did not function properly.

Transactions of more than Tk 10 lakh in the banking channel come under the scanner of BFIU, he said, adding that unethical benefits such as capacity charge and legalisation of undisclosed money were growing in the economy.

According to Hossian Zillur Rahman, another former caretaker government adviser, the budget proposal reflected dictates by International Monetary Fund, oligarchs and bureaucrats.

Calling the proposed undisclosed money legalisation scope deducting 15 per cent tax unethical, he said the overall situation would be dangerous in coming days if the ethical practices in the economy were not stopped.

Former Bangladesh Bank governor Salehuddin Ahmed said the budgetary proposal for borrowing hardly reflected the reality of the banking sector hamstrung by the growing bad loans.

Mocking the defaulted loan as an economic model he said changes in the income tax rates and custom duties every year were not good for economy.

The former BB governor criticised the projected huge expenditure for the administration saying that there was improvement in service delivery by the government officials.

Earlier in the meeting, former comptroller and auditor general Muslim Chowdhury demanded establishment of commissions for bringing about reforms in the operating budget and moribund banking sector.

He noted that many of the bank credits had been extended without any projects with the motive of plundering.

He was critical about the government inclination to make investment on physical infrastructure projects instead of human resources development saying leakages and wastages in the physical infrastructure projects were high.

Policy Research Institute executive director Ahsan H Mansur was also critical about growing expenditure on perk and packages for the government officials and the number of ministries.

There is no need of so many ministries, he said, adding that the operating cost of the administration could be reduced by at least Tk 30,000 crore.

He said that the government should consult with Adani Group, Summit Group and Orion Group to rearrange the capacity charge that is taking huge toll on economy due to overcapacity in power generation.

NOAB president AK Azad, also a parliament member, in an introductory speech warned that employment generation would be effected greatly if the projected bank borrowing was implemented.

Center for Policy Dialogue executive director Fahmida Khatun lamented that the finance minister did not offer anything for the educated unemployed youths rushing for even a government job meant for school certificate holders.

Because they are extremely hungry, said the CPD executive director.

Salma Islam, a member of parliament from the reserve seat and the publisher of local vernacular daily Jugantor, demanded arrears payment by the government of the newspapers and waive of duty for the newspaper industry.

In his concluding remark, Mahfuz Anam, editor and publisher of The Daily Star and president of Editors’ Council thanked economists for highlighting reasons for the current economic downturn.