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restrictions on luxury goods, and set a priority as to what goods can be imported in the current situation, said Prof Rehman, a former member of the advisory council of the caretaker government in 1991.

“Will we bring eggs, food, or BMW cars? I do not see any ban on bringing BMW cars, though the duty is high on the vehicle. Time has come to tighten import restrictions further,” he said.

‘DANGEROUS TERRITORY’

He also warned against bad loans, saying defaulted loan is a big problem for the banking sector, which began in the 1980s when two financial institutions sanctioned loans without analysing the business viability to create a capitalist society.

Later, the two institutions – Shilpa Bank and Shilpa Rin Sangstha – went bankrupt. Now, the entire banking system is plagued by the problem as banks allow rescheduling progressively, he said.

As a result of non-payments, poor people’s money is accumulating in the hands of the rich, he noted.

“It is not only a matter of economic inefficiency; it is also a serious injustice,” he said, adding that defaulted loans have already reached a “dangerous territory”.

“Defaulted loan is now an in-built practice in the business model,” he said, adding that bad loans continue to rise as businesspeople and people in politics are out to help each other for mutual benefits.

FALLING REMITTANCES

The macroeconomic indicators were doing quite well for many years riding on high export earnings and remittance.

However, some indicators felt pressure in recent times as the Russia-Ukraine war escalated fuel and food prices on the international market, said Prof Rehman, also former director general of Bangladesh Institute of Development Studies.

On the other hand, remittance earnings dropped although a large number of migrants went abroad in recent months.

“It is contradictory,” he said, adding that the reason behind this contradiction is that remittance is coming to the country through hundi instead of the official channel.

This process facilitates money laundering, and the potential forex earnings are not adding to the reserve. Instead, they are accumulated outside the country and, subsequently, the local currency gets devalued.

However, unlike many other economists, he does not support the market-based exchange rates to address this.

“I do not agree with the opinion of market-based exchange rate,” he said, citing examples of India and China that did not float their exchange rate.

BAD DEALS FOR POWER

He appreciated the government’s move to enhance power generation capacity, but said the distribution channel is still not up to the mark due to the absence of a comprehensive plan.

“Rental power plants were justified for a few years, but their existence for 15 years has created all the problems. The problem lies in the agreements that were made between the government and power suppliers in the private sector,” he said.

The profitability was in-built for the private sector and the risk was borne by the government by giving them the assurance of buying power in the name of paying capacity charges, he noted.

As a result, many entrepreneurs with no experience in power generation secured contracts by using their political clout and built power plants, although the distribution system did not receive enough investments.

“The result is the government is paying capacity charges even without using any power,” he said.