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The Finance Minister Calls for a More Active Private Sector, Warns About Possible Decline in Aid but Says the Economy is on The Right Track
THE DAILY STAR IDS) Fl nance Mfoisler. would you Ilk*
economy and the work that you hour done during the last one year and the present situation — Its performance, success. and the areas of prob
SAIFUR RAHMAN (SR) : You see, during the last year, the government, that is the new government, started with transitional problems.
It took some time to settle down. Then we experienced or suffered the cyclone, then there was the flood tn the North and Northwest. North East and this went on almost till the end of October In between we had the new parliament. all the constitutional amendment bills and all that — so it took a lot of energies of the government of that lime to settle down to the constitutional process.
Now, tn the early part of the fiscal year, the economy was somewhat slow paced because of all thts problem. But it gained momentum towards December, somewhat by the beginning of thts year — it started picking up a much faster pace.
But the success of the government is that, tn the macroeconomic stabilisation programme which was to contain expenditure and which was to Increase the internal saving for government revenue, to create surplus in the budget, so that wc could have an enlarged investment programme, for a larger GDP (Gross Domestic Product) growth.
This thing went very well because, for the first time in our 20-ycar history I must say, that the revenue target has not only been attained but ft has exceeded the budget. The expenditure has not only been controlled despite paying the dividend of the year to the tune of 450 crore taka (Pay Commission settlement for state-sector employees), but we have absorbed this and yet our final expenditure as of today Is less than what we had budgeted for, during the July-August budget session of parliament.
So I must say this is a unique achievement.
During the budget we thought we would contribute only 14 per cent from our internal revenue resources to the annual development programme (ADP). But as of today we have contributed 24 per cent from our internal revenue to the ADP of '91 -'92. whlc is Clng to end within the next v weeks.
So taking all these factors. I say that we have done very well. And that has found Rs reflection in various reports produced by -the IMF (Intcrnsatlonal Monetary Fund), the World Bank, and other institutions like the Aslan Development Bank (ADB) as well.
What we should have done more is tn the implementation of annual development programme.
Sec, wc took up a 7,500 crore taka ADP, but I think wc will not be able to achieve more than 7,150 crore. Infact. I have a feeling from the information I'm getting from the various ministries that It might range from 7,000 crore to 7.100.
But even that dificrcnce — hardly six per cent — is a tolerable or acceptable margin. In any country when you budget, such a small difference in actual realisation would not be unaccpctablc.
The private sector, however. did not take up to the extent wc wanted or expected, rather Well it is very dlfficull to kknlily ...
DS Win/ don't we intciject and Just say. In the light of the performance you have Just talked about — what Is the area that you regard as a failure and as you said that you regard the private sector performance as a failure?
SR : I would not say failure, I would say they did not come up to expectation.
However, I don’t blame them either, because the private sector has also to get used to the new administration. They have got used to a particular form of administration in the past nine years. Tbcir work habit or work pattern developed attune to the previous administration.
Wc are a new administration. an elected government, and we had committed ourselves to render accountability to the parliament, transparency in the transaction. And also we have followed certain action — like publishing the names of those who had defaulted on the payment of bank loans, which they did not like very much.
But that, the publication, of
the defaulters list, was doin' as a final resort, aftetr other efforts failed to produce the result, on the pica, perhaps, that social sanction would force them to make the repayment. It appears, however, that not much result has come out of this programme.
DS : Can we interrupt you here, Just one second. It has been said by the private sector, what you describe as the final move — the publication of the defaulters' list — teas not preceded, al least to their thinking. by other moves, that is. they did not see anything as being done to restructure the banking system, loan recovery system ... rather a very strong action was taken against the defaulters.
SR : Naturally they will say their part of the story, but 1 would say that the process of recovery started during (former president Lt. Gen. Hussain Muhammad) Ershad’s regime, that is during 1985-86.
The Ershad government then engaged a consulting company to look into the loan recovery process of both the BSB (Bangladesh Shllpa Bank) and the BSRS (Bangladesh Shilpa Rin Sangstha). They reported that the situation was very bad, so much so, that the World Bank financed the programme to classify the defaulters.
Infact, one of the recommendations even at that lime was that, may be, publication of the defaulters list might be one of the area where social sanction can get some results.
The borrowers have been persuaded from then onwards, that Is from 1985-86, to pay their loan. I can tell you. I was a Finance Minister when I last left this government in March. 1982 and the recovery rale
plying any cash credits Result is. from 1989 till today you do not have any credit line avail able for financing new industries.
After all you want to have a new industry, see new entrepreneurs come alpng to set up new industries for creating new employment. So it was a final move to see whether they could be prompted, or encouraged at least, by the pressure of public, to pay off the loan. Wc thought they would care for the public image, and pay back the loans.
But, as 1 could see it. there has not been much improvement.
DS : So what's your next move then with the defaulters?
SR : My next move is what 1 told you. Wc have set up another loan court and we are bringing in some new tips to the law.
Already the law has been amended. It Is In the final process, so that we are trying to bring about the legal situation Hke Hong Kong, for instance. There if you do not pay your loan by a month, you're Just declared bankrupt and your property is sold.
DS : Are you considering such a move?
SR: Yes, wc cannot perhaps go through thts quick process because our legal system is very much an arduous process. But loan courts have been brought to cut short some of the circuitous ways. But even then there arc weaknesses in the law. For instance, formerly wc could not make attachment with the Judgement. The borrower himself could put accountancy with the Judgement. Wc are taking legal measures to ensure that this sort of weakness 1s removed so that
after one year. They will make a much better response next year.
DS : Even before you got elected, from your election manifesto and from your own public image the Hangladesh Nationalist Party (MNP) was a party of the private sector. So don't you think it is a bit strange that the private sector is so hesitant after your gov
Awami League had, as you know, taken away.
Wc started the privatisation process and it picked up mo-mentum. t We had given per mission for the private banks. I agree. But they came Into being only after wc had been thrown out of power — the permission being given at our time.
Why there is a strange relationship now? The private
arc the peopk- who have made a fol of money during Ershxl s period.
They are the ones who have the capital, During our administration, or during our movement I mean, we have said that there were a lot of Irregularities going on in Ershad's administration by Introducing what wc call policy-based corruption. Institutionalised corruption tn the private business practice.
Naturally these private sectors thought that, now that these fellows have come they might try to have their pound of flesh from us. Naturally if I were in their position. I would not be different. So that psychology mastered them. But now after one year, now that they've found that no wc have not gone Into stopping them from seeking business, they arc as much free to do business as anybody else. I think this year they will have much more confidence than they had tn the early part of this admin 1st ration.
DS : One perception tn the private sector is that there is a lot of gap between your policy proclamations and your actual steps. So this government has been very firm in declaring their pro private sector position. Mui in terms of actually implementing it they have got mixed signals. For example, you talked about, lets say that, retrenchment of labour to make industries viable. Mui yet. in actual practice there has not been any follow-up. Similarly there are other mixed signals?
SR : Well, unfortunately you sec. I am being tangled up with everything. I am not the industries minister, nor the labour minister, (nor the prime minister....) 1 am the finance minister.
The excess labour that is talked about by me. by you or by anybody. This is the result of the reports by international agencies who scrutinise or evaluate Bangladesh's economic programme and policies. The country mission report of the World Bank, the IMF report, the ADB report, all these reports have identified areas where there are surplus manpower, which Is distorting the cost-structure for which Bangladesh industries is not In a position to compete internationally. because of excessive cost. And they talk of the rapid industrialisation programme.
gap between my utterances and their performance. I do not think I could answer that I think you should ask them
But the totality of labour is very small. — the total cm ployment In Industry will be seven or eight per cent of the total labour force or may be 10 CcenL ft varies. Actually, In-t we should create more jobs and give more employ ment.
In a situation characterised by this nature there is a question — I do not accept this word retrenchment, frankly speaking. Because retrenchment is something which ts compulsory in nature I am forcing him to go. Frankly speaking, excepting the Jute sector. even the other institutions did not identify much of a surplus.
What they identify a* surplus is the government sector — It is in the railways. BADC. Water Development Board, and others. And only other industrial sector was Jute sector — which came out of a Jute study report which they call "Jump" study and that report went Indepth into the jute structure and they said, R Is over-maned. over-capacitated. So capacity has to be reduced and manning level has to be brought to the earth.
Active operation-level retrenchment is something which is compulsory and I haw no intention of it whatsoever. at this stage. 1 do not think we need to. during the first two or three years at best — next year and the year after, there is no need for retrenchment.
Infact erroneous Impression was given to the public and some opposition people are also taking advantage of thts confusion that has been created.
What the government has taken. Is a manpower rehabilitation programme. In the process of this rehabilitation programme we haw a fund — 100 crore for this or 200 crore for that, plus we get some money from outside also.
First those industries where the labour retired voluntarily, they would get compensated and they would go away. But I believe from the application of jute, textile and other sectors, there are people who have already applied — they want to retire. Because some may get two or three lakh takas. Il is something with which they can do something on their
then was 47 per cent. When the consulting firm gave its report in '85 ’86. the recovery rate came down to five per cent.
Continually thereafter, even Ershad's government also followed through for the recovery and that is why they established the commercial courts, the Loan Court — all these courts were established by them. I have added only one. There were two courts already. I have established another court because the two existing courts can not manage the number of cases.
So they were also frustrated. and we have tended ourselves with the accumulated problems given over to us by the earlier administration. In Bangladesh, the financing mechanism for the development of Industry was to give credit through Developmrnt Financing Institutions (DFI) like the BSP and BSRS. But. the result of the poor recovery of loans was that, the Aslan Development Bank, the World Bank and others stopped suu-
(he recovery process will be hastened.
DS: On balance you are rather disappointed with what is happening to the private sector in this country ...
SR: Not only am I disappointed. The other day there were some bank people who felt that the private sector needed much more active response. But they felt that wc encouraged you people to do ft, but we arc not very happy about the extent of the move that the Bangladesh private sector has made towards the industrialisation process.
I belong to this country, so I could see any reservation when any new administration comes in .— and when certain actions are taken, and may be there is some ’sec-saw" situation -in which the private sector has some sort of hesitation. But I believe It will be over now. because I am hopeful that they will actively participate now that they know us better and we arc more familiar to them
ernment got elected, because it is not that they did not know MNP as a party because you were in power before and now you have come back again. So. is this to say that the transition Is the cause — or may be there is some other cause?
SR: In a way transition is the cause. Let me tell you one thing. It is true. It Is wc who started this privatisation process in 1977. We started the privatisation process wi(h disinvestment In the tea gardens and all those sorts which the
sector got used to a different sort of government, different kind of administration. And that administration and our administration are quite different. We have been fighting that administration. This very private sector was supporting that administration through and through. There arc some people Identified as top level people — who have made a lot of money during Ershad's regime. And they arc the entrepreneurs. whether through import, whether through licensing. whatever it be. They
Now naturally when they asked me. as the finance minister, when I come from anywhere, —"what do you think about the World Bank or ADB recommendation on the surplus labour?’ — Well the gov ernment Is looking Into the report and the government wants to Implement the report. O K.
Now, the function of the ministry of Jute, ministry of textile, to Implement the pro gramme and policies. Il Is from them It should come, you see. So therefore if there Is a
own. It is a very good self-employment process.
So. 1 would Hke to say it very categorically — the government has no. at least at this stage, for the next year or year after next — no need for any retrenchment at all. Because the voluntary retirement, the willful retirement — the option of retirement, is more than enough for us to cope with, in terms of giving them compensation. to be wry frank
In between wc are also setting training programme, for training many of the labourer.
Io see if they could be absorbed tn some other areas. So training programme is there.
So it to a combtnalK.il f various policies The govern ment sector to an aging and ailing agency, and tn any case peopk are seeking retirement, getting compensation, they arc K; away and starting a d1f-t Hfe of their own. So I think that If there 1s Inconsistency between the pro nounccmcnts and actions, I am sorry that I cannot answer that question
But our intention by no means 1s to create a further labour problem in this country, curtail the job — In other words our job to to relocate, rrhabihtate. In a way. that is a different way. a different pattern altogether. Through vol-
compensation. There to no such thing, at alL ewn a remote possibility of any retrenchment. At least. It will not be for 1992. 1993, 1994 — for the first few year*. I do not see any possibility
OS : A very. very categorical statement. Mut have you worked the cost of rvhabiltta lion?
SR : It to very expensive even from today This to where wc haw to get fund from outside, with our own fund. If you have, mind you, it does not
Why I say that question of retrenchment does not arise because voluntarily retirement, the number of people who are willing to go with a satisfactory compensation level.
First of all, if wc want the people to voluntarily retire, we not only have to give them what to due to them under the law, wc also have to give them something extra. Because wc have to give them inccntlw. Say you are 55 years of age. why don’t you wait for 57. — you can take your sum when you- retire. The cost to heavy. That Is why the programme has to have a longer period of time phase.
DS : That leads us to the whole issue of aid and assts lance from outside. Now you are generally satisfied from what I know from newspapers and your statements with the last aid consortium meeting. Mut certain questions have been asked. One question is about the conditionalities and at one point we have to swallow tt. And the other question that has been asked Is — whether we can expect the aid level to be maintained. So, Mr. Minister may be we first take up your general reaction to the aid situation. And then take up the question of conditionalities and the general prospect of our being less dependent on aid over a period of next five years?
SR : Thank you very much for a nice question. People have got used to, what I call aid-addiction and if you hear that wc arc going to gel less aid, one section of the people become very jumpy, that aid is being reduced. Another section of people, who will say. If I bring more aid. that here is a minister who is going to mortgage the country, to the outside agencies and making the country less self-reliant.
So this sort of ambivalence exists in the society. Love-hate relationship with aid. Who loves more, whether lovers are more or haters arc more It is for you to determine because you arc in the press Industry. And therefore you will be knowing the people's view.
Bangladesh, by the very nature of the country, the structure. the over-population, resource constraint, recurrent visit of floods, cyclone, tidal bore — the whole character of the country, the Ganges, the delta basin and subjected to the recurrence of the natural disasters, and the severe man and land ratio in the country, has to depend on surplus capital to be brought in from outside. which means foreign aid.
Now this aid thing, developed even during Pakistan days and. during Bangladesh time we also got into the same aid business. And the country s economy cannot generate certain surplus. The foreign assts tance has to fill-In the Investment gap which will help the government for public sector development, annual development programme.
That was done In a world scenario. Wc took advantage of the East-West devise, or North-South devise. But more East West devise, and more or less the aid climate was better because the OECD countries, at that time thought for various political and diplomatic reasons — to be much more friendly, by giving aid to the Third World countries
The situation has drastically altered — with the collapse of
the Berlin Wall, the Soviet Empire and the East European environment. And now It Is a different world altogether. Those autocratic regimes of Eastern Europe and Russia also realised that their contradicted process of development has not given them the result which they expected. So they arc also coming into the market development orientation and the Western countries, because they arc kith and kin In any ease. After all wc arc far away from them. After all most of the OECD countries belongs to them. So. therefore they will look after them first before they look after us. whatever pretension wc may have otherwise-
Let us be frank with our selves They will first look after them, their own neighbour. So that philosophy is there, w could see that In the multllat era! financing development Institution. Formerly they were not so stiff tn their conditions Now they are more stiff not because of their condition, but because may be In the process they want to reduce the aid programme to the developing countries to divert a lot of which will be needed In the development of industries In East European countries
Wc have to make better util-laatton of the aid. In the post, aid has been brought In. to finance irrelevant projects or projects that were not of national priority. For instance, the Dhaka flood control project. I think it was altogether an unwise decision to under lake a project of flood control for Dhaka city amounting to more than 500 crore taka when the whole country suffers from it every year
It was obviously a waste of resources. Instead. I think this 500 crore taka should have been spent on selling up 100 factories which could have offered employment to more than 10,000 people.
Masterly I can give you hundreds of Instances of irrelevant expenditure and misuse money was at
So whatever we do we have to be very choosy in selecting our sectors tn which assistance is needed and should Involve aid only In the absolutely prior Uy areas
Now. what is our priority programme? Our priority programmes are — poverty atk-via bon. education, health, infrastructure. industry, manpower development, these arc more or less our priority pro-
In these programmes, the Kof aid wc need art dlf
vertlng our aid orientation, we are not seeking aid for Indus triaMsabon. we are leaving in dustry with the private sector and they will mobilise their resources snd we are giving some industrial credit also to give to the private sector. Wage-earner money is free to import machinery
So we don’t really need aid for Investment. If the en trgrefteurs eome forward rvermnerrt sector and the m-frastrueture area have to ptay —Jnr rate. Even with
privatisation, government will continue to play a dominant rote in providing infrastruc ture, manpower resources, development power resources, health programme and law and order de.
Now tn this context wc have to be choosy, because people outside often say that donors impose certain conditions when giving us aid. But I think it is a misnomer. Except on one or two areas It is a misnomer and I think it Is unkind also tn some areas to the World Bank and Asian Development Bank. For Instance In the Enhanced Structural Adjustment Facilities (ESAF) programme aided by IMF. u hat they are saying is — you reduce your current expenditure. you Increase your savings, increase Investment, reduce your defk.it, reduce the infia tionary situation. Any good and sensible government would be ready to do all that.
think It is a misplaced question. But as I told you I do not agree with them and I have continually told them and wc shall provide irrigation to our fanner.
About Import restrictions. I think they have a point. When they say Import, they are not saying that you open your market. They are saying, you have excessive and irrcle vant trade barriers. Now you want your export to find an outk-t into their market. But in an inlcrdcpcndant and interrelated world, you frankly cannot get something for nothing.
You want your garments to go Into !hc United States, but you wouldn I allow their goods Into your market, that cannot be. You want your commodities to sell In European markets, but you shall not allow their goods Into your country, that really Isn’t acceptable commercially: because a one wav
DS: Uul does it not also Include conditions such as aboil Hon of import restrictions, do Ing away with agricultural sub Mdy?
SR Now, I was coming to this. Wc have agricultural sub sidy on certain items and that certain Items involve Irriga bon.
In Irrigation the govern ment ha* to help them, be cause irrigation Involves much larger Investment in terms of the afibrdfbllity of our farmers
Say. a shallow lubcwcll costs 18.000 laka. so It is impossible for a small farmer to invest that amount into irriga tlon So this is an area where wc are already contending with them, and saying. In Irri gallon I do not agree with you
I provide Irrigation to my people, otherwise there cap not be a winter crop and Bangladesh * future lies In the winter crop from the ground water or surface water, what ever the Irrigation may be That I. the key to Bangladesh * agricultural development.
In the distribution and de livery of agricultural fertilizer, seed. insecticide and pestl cldcs. the private sector can do a much better job and they have demonstrated their efft rV-ncy in the- last three years of prtvaU business.
So when they say you chmi-nate subsidy they have their
money They say. w«h your own money That to their point and I frankly do not
trade never prospers anywhere.
What is needed Is that, wc have to be given a respite
Our Industries are gradually developing and we cannot complete with the mature industries of the world, because in Industrialisation wc arc lag glng behind the developed countries of the world in many respects.
However In Bangladesh. I could see that the this ‘childhood' seems to be prolonging far too much.
Take the plastic Industry for example. There Is not a single reason why our people should carry a plastic bucket when they return from a visit to India. Good plastic baskets should at least have been made locally by now
Another reason to this, excessive protection is not good and did not prove good 1n any countries which followed ft. India. Pakistan. Bangladesh, Sri Lanka followed protective trade; all these countries are lagging far behind countries like Taiwan, Singapore and Hong Kong which followed an open market economy.
"What we want here to do to. we want to have a judicious mixture of tarrif with a free liberalisation programme Wc do not want to go to the extent of ruining our upcoming Industries. while at the tsnx lime, wc do not want excessive pro tcction that even at the age of 40 they will art like children
DS Do you have. al the back of your mind. any feeling that next time in the aid con
, sort turn meeting in Parts you would be asking for less than two billion? You certainly have a target? How do you reduce your aid requirement year by
SR: 1 really would like to ask for less. But I could tell you also that love-hate relationship with aid that I have mentioned earlier on.
This year there was an interim country report of the World Bank which mentioned that they might recommend 1900 million dollars, and I could see from every newspaper that they were saying that the World Bank would recommend 1.9 billion, while It was 2.2 or 2.3 billion tn the previous year.
I was happy, because it was what I was always aiming for. Because last year I told the Parliament that I shall attain 14 per cent self-reliant devcl opmcnl process In the first year. I said in the 2nd year 1 would go to 25 and 3rd year 35 per cent. That is my target. I and the people of the country want greater self-reliance effort. If I ask for increasing aid, then what would happen to my my effort for economic self reliance?
DS: Can you glue us any target?
SR: Yes. by 1995. If we continue as wc are now continuing under this normal rule of democracy, domestic con tributlon to the development budget will be to the extent of 35 per cent.
However, this year, while my target was 14. we have reached a reliance rate of 24 per cent in a single year. In this way wc will not only achieve 35 per cent by 1995. I think If wc arc allowed perfect democratic stability and good law and order atmosphere, and the confidence of the outsider about the hospitable environment In Bangladesh 1n terms of the social peace and tranquility. then I think we can even achieve a self reliance rate of even 40 per cent.
DS Yes. but will U mean reduction of assistance from outside? liecause you are talk Ing of 40 per cent of the do mestic mobilisation matched with the assistance from outside. Hut will It mean external aid coming down to. say 1.5 billion. by 1995?
SR: Yes. certainly, because the more I can raise Internally, the k-ss I shall have to depend on others. Why should I mort gage my posterity for Invest ment today? Already wc have an external debt liability of US 12 billion and 12 billion to 55 per cent or almost 50 per cent of our GDP Gros* Domestic Product). And I should say. that wc should stop before it reaches two thirds of our GDP and that I* our maximum limit.
DS; You said that there would be 24 per cent Internal expenditure on the annual de ueiopment programme (ADP) 'his iiear hut you haue also -nid that the total expenditure will be 400 crore takas toss than the target Spending less
than the budget target on current account expenditure may be a good thing, but wouldn't you consider It a really bad thing to haue spent so much less in the development budget. rather than exceeding U?
SR A budget is a budget. The difference between the target and our achivemcnt is only six per cent with the ADP. Even If you remain in a 10 per cent plus or minus within your budgetary target, even then the budget is a good one. frankly speaking.
But I am not satisfied. With this 7.100 crore or 7.500 I think is an excellent target and there’s no question of exceeding it in a eye lone-drawn, flood-drawn, devastated new administration. 1 would say wc have done excellently. With due humbleness I would say that none with these sort of difficulties and with the transition to a new governmental machinery could have done so.
I can spend 700 crore more within 30th of June. Yet my line ministries could not- use It effectively. Finance Is no problem. 1 am the Finance Minister. 1 can write a cheque for 700 crore and still have no deficit finance.
But the capability of the line ministries is a different mat-
ter. That is an Inherent problem of Bangladesh’s develop ment. Our main problem of development are project identification. project Implementation. monitoring capability. These arc few common difficulties and areas of Incompetency Inherent even from the early 80s. It has only multiplied during the Ershad regime.
When you go from one-man rule and the centralisation of power to decentralisation, the line ministries cannot operate well. They watt for the orders from the top. But there Is no top now, it is a collective responsibility. We arc giving more responsibility to the line ministries and by that they will have a lot more to do and become more vita) than ever.
DS: We were not really thinking In terms of fund shortage, but in terms of implementation of the projects ...
SR: I told you earlier, implementation gap or deficiency still persists and it will continue to persist in my standard of Judgement. It should be improved much faster.
Bangladesh’s current prob-k-m Is not finance. It Is proper management. Management capability. project identification
and implementation capability are the three sectors which are hampering our development endeavour by falling to make proper usage of the aid nxrney.
Actually domestic resources should be the area In which wc should all direct our attention. We do not only need efficient engineers, doctors, accountants. but we need good managers. At the moment, wc arc seriously lacking in good and efficient managers both in the private and public sectors.
DS: Are you going to present us with what Is known as a 'soft' budget or a 'hard' budget this year?
SR: I really cannot say whether It will be a soft or hard budget. Usually any budget presented by the Finance Minister is considered a ’hard’ budget from every other quarters of the society. Even If it Is in his opinion a soft budget, they consider it hard. So I do not really know, it depends on people’s perception.
DS: Looking back at the previous year, are you satisfied about your achievements tn the financial sector?
SR: Yes, 1 am more or less satisfied. But I am not satisfied with the micro-sector perfor mance.
If the micro-sectors worked with more resilience and vigor, I think wc could have achieved 7,500 taka disbursement on the ADP, which you mentioned earlier. Because fund shortage was not the point. 1 had funds which I could not spend. This is my frustration, not only frustration but anger also with the agencies.
Otherwise as far as the macro-management is concerned I am very satisfied. Because the inflation rale is only 5.5 per cent. Il is not only my assessment but the Mission Chief of the World Bank complemented me for achieving this low inflationary rate and he said it was an excellent performance for a country like ours.
Wc have managed In the last year of the ESAF programme and we have managed cxcel-k-ntly. Not only that, we have so much foreign exchange at the moment, but the private sectors arc not coming forward to use the foreign exchange. They are setting a target now for retaining a foreign reserve of five months of our Import requirement, which Is far too excessive.
But they are saying now. that since your economy is maturing enough to go in from a marginal requirement to a ‘ mid-term requirement. Three months are for the poorer nations. But for the relatively richer or well-oIT nations, it is not three months.
Three month’s requirement may not also be adequate, ft may be enough. But not adequate in the sense that If suddenly our country Is overtaken by flood, draught or cyclone in the present aid-climate of the world, then suddenly you have to go through a lot of accidental import of food grains, edibles and other major necessities. So I think it Is not adequate.
DS: As we have leaned from outside, sir. is that one of out major factories Is not working efficiently because of over-
staffing. Now you are telling us categorically that there is no question of any retrenchment and you are planning to allow them voluntary retirement which Is also expensive and It seems that basically It Is a status quo situation.
SR- No it to not a status quo situation. As I see ft, it is a man power rehabilitation programme. Retrenchment is when you force people to retire. The excess in the jute sector, where separate study and separate programme have already been done, if the people working go Into retirement voluntarily, then that will be a number sufficient enough to pay for us for their voluntary retirement. At this stage, frankly speaking. I think there Is no need for retrenchment. Because retrenchment Involves compulsion.
DS: We interviewed you when your first became the Finance Minister. Then you had stressed on the need to reduce the government. You expressed your feeling that U was over extended in respect of the number of employees, buildings and bureaus and departments. many of which offer very little services. What do you think of it now?
SR: Now I feel more
stronger and worse about it than 1 had pointed out last time.
I think government is the worst institution. We all would have been better off If it was possible to eliminate these institutions for good. Whereever the government puls its hand, something goes wrong there. It would have been better if people could have .been allowed to run their own affairs
I am disgusted In the manner in which government offices run. Say. civil service. I tell you. I am absolutely amazed by the way ft runs. It fs absolutely status quo oriented. Unless you tell them, they will do nothing. There Is no drive or Initiative and enthusiasm. This is one of the reason why our development programme fails its target. Not because of the lack of finance, but greatly because of the lack of enthusiasm and initiative from the civil administration for project planning, project processing and project Implementation.
DS: Thank you Mr.
Rahman, for your time.