The economy will not progress without political reform.
The Center for Policy Dialogue (CPD), a private research organization, believes that economic reforms will not progress without political reforms. According to the organization, despite the change of power, the macroeconomic situation has not returned to normal in the current fiscal year 2024-25, and there are still no signs of improvement. At the same time, there is a recession in investment and employment has not increased. Fahmida Khatun, the organization’s executive director, presented this information while presenting the main article at a media briefing titled ‘Bangladesh Economy 2024-25: The Challenge of Meeting Expectations in a Time of Crisis’ at the CPD office in Dhanmondi, the capital, on Wednesday (January 29).
The CPD said that domestic and foreign investment will not come if there is no political stability and institutional stability in the country. Therefore, the main goal of the interim government should be to create an environment for elections as soon as possible. The organization also said that without political commitments, reforms are not possible by confronting powerful vested interests. Therefore, in addition to increasing institutional capacity, internal discipline and good governance, reforms must be made sustainable through political commitment.
The CPD Executive Director said that the country’s economic situation was weak during the previous government. Even after the change of power, there has been no significant recovery in the economy in the last six months. The main reason for the July movement was the economy. More specifically, the lack of employment. This was exacerbated by the discriminatory policies of the previous government. The interim government could not increase employment even after taking responsibility. Stating that there is a recession in investment, Fahmida Khatun said that the investment situation in the country is bad now. There is a recession in foreign investment. How can there be employment if there is no investment? Unemployment was 4.07 percent in September 2024. This year, it has increased to 4.49 percent. Due to the ongoing uncertainty, business organizations are not getting the confidence to invest by taking loans. Again, the government’s dependence on internal sources (for borrowing) is increasing, which will have a negative impact on the economy as a whole.
Fahmida Khatun said that a three-pronged approach can be taken considering the multidimensionality of the ongoing economic challenges. The first of these is to address the challenges of everyday life of the common people, so that they have some time to recover from the economic shock. Second, to address the challenges that have accumulated over the years. Third, to adopt reforms to strengthen the fundamentals of the macro economy and make them sustainable.
CPD believes that to address the economic challenges of Bangladesh, the interim government must adopt a balanced and effective strategy that simultaneously addresses the immediate crisis and initiates medium to long-term reforms for the next politically elected government to implement.
In the main article, Fahmida Khatun said that the growth in revenue collection till October of the current fiscal year has been only 3.7 percent. Last year, it was 17.7 percent at the same time. This shows that there has been a significant deterioration in revenue collection. In addition to revenue collection, there has been no visible improvement in the implementation of the Annual Development Program (ADP), inflation, employment, and private investment. The interim government has taken several initiatives, but success has not been seen yet.
Regarding the power and energy sector, he said, this government had promised to make public the power purchase agreements. But so far, these agreements have not been made public. The power and energy sector is in a debt trap. It is trapped in a vicious cycle of debt. He further said that the energy sector is in a serious financial crisis, for which the policy framework of the previous government is mainly responsible. This crisis has spread from government institutions to the National Board of Revenue.
Do Follow: greenbanglaonline24
