Political consensus needed
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estate, textiles, transportation, chemicals and fertilisers, plastics, IT, and telecom.
“For instance, the Public Service Commission was supposed to hire government officials based on merit, but it did not do its jobs properly. And the central bank allowed a few to loot public money. That is why institutional reforms are needed to make them functional, independent, and untouchable by political parties.”
Mintoo’s comments come as the Muhammad Yunus-led interim government formed 10 commissions for reforms in areas of constitution, judiciary, police, election, anti-corruption, and public administration, among others.
He, however, urged the interim government to sit with political parties after getting the reform proposals and come to a consensus on what type of reforms it should initiate and what proposals it should keep for the next elected government.
“Otherwise, reforms may not be sustainable,” said Minto, also a vice-chairman of BNP.
The previous caretaker government headed by Fakhruddin Ahmed took up an initiative to reform as many as 189 laws, and the deposed prime minister Sheikh Hasina also committed to implementing those.
Only six of those were passed into law, and even then, those were changed so much that they were worse off than before, he said.
“So, if you do something for six months and it is not sustainable, then there is no use for reforms -- it is just a waste of time. What we need is a kind of new social contract between the citizens and the state as well as the politicians.”
But that cannot be done by a government that has not come to power through a public mandate.
“You need the public consent. Without public consent, any reform you do is not going to be sustainable. There should be a political consensus that whoever comes and forms the government, they must carry out these reforms based on public consent.”
Although the AL is gone and an interim government with absolute independence is in place, problems faced by businesses, such as shortages of raw materials in factories owing to the curb on the opening of letters of credit for imports, the gas and electricity crisis, and labour unrest, remain, he said.
“With these have been added law and order that have not improved enough to give confidence among businesses. First of all, I think they are not very attentive to the problems on the economic front in terms of production, banking, law, and order. These three are fundamental to economic growth.”
Businesspeople are complaining that neither the labour problem has been contained nor the localised problems such as extortion and interference in the production process have been solved, he said.
“Everybody is saying the same thing. All these have increased. If you add all these together, I think the situation has not improved. If somebody surveyed the confidence of people involved in production and business, they would find that the level of confidence has substantially fallen.”
Many people think that the labour issues will not be solved so soon, said the 75-year-old businessman.
Inflation has not come down either, said Mintoo, who is critical of the way the Bangladesh Bank is trying to control prices spike.
Whenever there is inflation, the authorities in general look to contain the money supply.
“But there is another side to it. Once you restrict the money supply, production will drop, demand will drop, and thereby prices will go up,” he said, adding that there are 18 factors that influence prices and inflation.
One of them is the inability to open LCs to import raw materials owing to margin requirements by the central bank and shortage of dollars, said Mintoo, also the chairman of National Bank.
“If the factories cannot produce for shortage of raw materials, there will be a shortage of products. If there is a shortage of products, the price will increase.”
Except for jute mills, almost all the industrial sectors have to import most of their raw materials to produce goods for domestic and export markets.
In addition, the rising interest rate, which is now almost 16 percent, will increase the financial cost of businesses, and it will ultimately be passed on to consumers.
“So, prices will go up.”
The overall growth of the economy may be lower than the four percent projected by the World Bank.
“Consumption has shrunk for two reasons: first, you don’t have any money. Secondly, because of the price increase, you cannot buy enough. Inflation has been well above the wage rate growth for nearly three years, and it has affected consumption.”
Besides, public expenditure has been reduced, which is clear from the low implementation of the Annual Development Programme.