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State of Bangladesh Economy

CPD identifies six major challenges

Staff Correspondent
The Centre for Policy Dialogue (CPD) has pointed out six major challenges ‘for the Bangladesh economy in the next fiscal year and said macroeconomic stability, will depend on how the government tackles the challenges.
The challenges are slow progress in revenue mobilisation, inability to implement public investment programmes, upsurge in inflation rate, delicate balance in external payments situation, failure to undertake complementary reforms for improving-micro-conditions for private investment, and the wideningdisparity in income distribution.
CPD Executive Director Dr Debapriya Bhattacharya cited the challenges while presenting the independent think tank’s observations on the state of Bangladesh economy and thebudget rcsponses-2005, at Dhaka Sheraton Hotel yesterday.
Addressing the dialogue, Finance Minister M Saifur Rahman said the country's economic condition could not be improved only by budget, it is the issue of governance in which the nation witnessed
a'collectivc failure."
He stressed the need for political dialogues to overcome the failure.
Saifur claimed the proposed budget was the reflection of the philosophy of the current political government. "Titis is a political government, we have the people's mandate and it is normal that our commitment will be reflected in the budget."
The minister claimed that whatever measures were proposed in the budget were in the right directions. "We know very well what people want and what arc their requirements because we move around the country,* he noted.
"But it is wry difficult to understand people's norms sitting in a five-star hotel and living in the capital," the minister said pointing at the city-based economists and researchers.
On the challenges of budget implementation, Saifur said nowhere in the world budget is Implemented 100 percent. "Comparing to many other countries, our process of budget implementation is in much better, position," he claimed. "collective failure."
He stressed the need for political dialogues to overcome the failure.
Saifur claimed the proposed budget was the reflection of the philosophy of the current political government. "This is a political government, we have the people's mandate and it is normal that our commitment will be reflected in the budget."
The minister claimed that whatever measures were proposed in the budget were in the right directions. "We know very well what people want and what are their requirements because we move around the country," he noted.
"But it is very difficult to understand people's norms sitting in a five-star hotel and living in the capital," the minister said pointing at the city-based economists and researchers.
On the challenges of budget implementation, Saifur said nowhere in the world budget is implemented 100 percent. "Comparing to many other countries, our process of budget implementation is in much better position," he claimed.
About the continuation of the provision for whitening black money, the minister said the measures were taken considering the economic reality of the country.
Explaining the reality, Saifur referred to various decisions taken recently to bring dynamism in the economy. In this regard, he mentioned the introduction of floating exchange rate, full freedom of import and enacting Anti-Money Laundering Act.
Responding to the criticism of keeping huge amount of money as block allocation in the budget, the finance minister said the money has been kept to face natural disaster or any emergency situation in the country.
The minister denied the allegation of ignoring the areas belonging to the opposition lawmakers while making budgetary allocations for development. "It might happen as an isolated case but it is not our policy," he said.
CPD Chairman Prof Rehman Sobhan chaired the dialogue which was addressed, among others, by former finance ministers AMA Muhith and M Saiduzzaman, Opposition Chief Whip Abdus Shahid, Mushfiqur Rahman MP, GM Quader MP, Abdur Razzaq MP, Abdul Khaleq MP, Finance Secretary Zakir Ahmed Khan, Bangladesh Bank Governor Salehuddin Ahmed, World Bank Country Director Christine Wallich, DCCI President Sayeeful Islam, Dr Mamtaj Uddin, Dr Masud Ali, Prof Abu Ahmed, and Prof Ashraf Ali.
AMA Muhith strongly criticised the budget saying that it was just a
prescription of indiscipline. Suggesting structural reforms in the budget, he said the government's implementation capacity of the budget is questionable.
Muhith said the government has failed to handle the power crisis, which is fundamental requirement for investment in the country.
Criticising the proposed budget for keeping huge amount of money as block allocations, he alleged that the money would be spent for the election purposes of the ministers and the treasury bench lawmakers.
The former finance minister also opposed the practice of issuing statutory regulatory order (SRO) before and after the presentation of budget in parliament.
Former finance minister M Saiduzzaman said the budget lacked measures to reduce wastage of money and resources in the country. He observed that the government subsidy in agriculture hardly reaches the genuine farmers.
He suggested providing the
farmers with direct cash incentives.
World Bank Country Director Christine Wallich said the government should be watchful so that projects are not influenced by undue political pressures.
She said the tax on the SIM (subscriber identity module) card of mobile telephone would affect the growth of telecommunications sector in the country. She stressed the need for detailed discussion of budget in parliament.
Awami League lawmaker Abdur Razzaq alleged the areas belonging to the opposition lawmakers were being deprived of development budget allocation. He urged the development partners to see whether their money was being distributed equally.
Razzaq said the government has made a budgetary allocation of Tk 60 crore for Gram Sarker, a local government body which is not functioning at all.
Opposition Chief Whip Abdus Shahid said the opposition bench lawmakers are not in a position to join parliament because they hardly get floor to speak. Besides, objectionable comments are often made against the leader of the opposition, he pointed out.
Finance Secretary Zakir Ahmed Khan said the block allocations were kept for facing unforeseen circumstances. He said the spending process of the money is also completely transparent. "No money is spent on any unapproved project," he claimed.