Sohrab Hassan
Economists and politicians failed to deliver any message of hope at the symposium ‘White Paper and Thereafter: Economic management, reforms and the national budget’. There was an underlying sense of frustration in everyone’s words. Their contention was that the interim government was not giving as much attention to economic management as it was to administrative and institutional reforms. A month and a half has passed since the White Paper drafting committee submitted its report, but the government has done nothing towards its implementation. It has inconsiderately hikes Value Added Tax (VAT) and made life for the common people all the more difficult.
After the interim government took over power, it has formed many commissions for state reforms, but has come up with no guidelines, said economist and head of the White Paper committee, Debapriya Bhattacharya, adding, “Many are of the opinion that this government is performing like the previous government where the economy is concerned.”
The question in the public mind is that if the interim government is doing the same as the previous one when it comes to the economy, then why was there such a massive mass uprising in July-August. Why did so many people lay down their lives? The July-August uprising resounded with slogans against discrimination, but the government took no measures to prevent economic discrimination.
Stating that the government paid less attention to economic management, Debapriya Bhattacharya pointed out that the interim government was running on the lines of the Awami League government. With no revised budget being drafted, all indicators involving the last budget have become irrelevant. As a result, it remains unknown as to what steps have been taken about those who do not pay taxes and this is a matter of concern. This economist expressed apprehension that the state of energy would deteriorate further in the coming summer.
In the World Bank’s report, ‘World Economic Prospects’, it has been predicted that GDP growth this fiscal may fall to 4.1 per cent. The World Economic Forum (WEF) has identified five risks to the economy – high inflation, extreme weather conditions (floods, heat waves), pollution (air, water, soil), unemployment and lack of economic opportunities as well as a downward turn in economy (recession, stagflation). While the government does not have control over all of these issues, it can at least take up pragmatic and people-friendly measures against high inflation and economic recession.
Speaking to Prothom Alo, professor of the economics department at Dhaka University, Selim Raihan said that the neighbouring countries had taken effective measures against inflation and got good results. Bangladesh did not take the right steps at the right time. The new government does not seem to be doing anything much different.
Referring to the inflation, former lead economist of the World Bank’s Dhaka office, Zahid Hussain said the high price of commodities have decreased elsewhere in the world, but not in Bangladesh. There is no reason for this. The fire brigade turned up too late and poured oil on the market flames rather than water. Global market prices are used as an excuse for high prices here, but the prices have gone down in the global market. But who will answer why the high prices have not decreased here?
Entrepreneur Syed Nasim Manzoor perhaps expressed the most concern at the seminar that day. He said, “I have been running business for 34 years. I have never seen such a situation in all these years of my business. If things continue in this manner, investment will go to other countries.” If this is the worst time for businessmen in 34 years, when will good times come and who will bring in the good times?
Economist Hossain Zillur Rahman, speaking to Prothom Alo recently in an interview, also raised the issue of economic crisis. He said that while the government has displayed a degree of success to restoring discipline to the indiscipline in the economy, it has failed to lend momentum to the economy. Commenting in the increase of VAT on over 100 items, he said, “The interim government has also chosen the old path as the easy way out.” Awami League had acquiesced to conditions and took loans from IMF.
While discussion and debate rages between the student community and the political parties over credit for the July mass uprising, when no decision can be reached even at the all-party meeting, what is the state of the general people who took part in the movement? The working people who took part in the July-August uprising have returned to their respective professions after 5 August. None of them search to take credit for the movement or seek to contest in the next election. All these nameless people wanted was a little relief, which they have not received. To the contrary, the steadily rising prices in the market have made their lives all the more difficult.
According to a study of the Research and Policy Integration for Development (RAPID) on 15 December, in the two years following 2022, the purchasing power of people in Bangladesh declined due to high inflation, bringing 7.8 million anew to the poverty line and around 10 million at the risk of poverty. Among those who were already poor, 3.8 million fell below extreme poverty. In other words, 17.8 million people become poor or faced the risk of poverty anew, because their income did not increase in comparison to the high inflation.
The policymakers of the government must understand that no reform programmes will be effective if people remain hungry.
A UNDP report published on 18 October last year said that 41.7 million people in Bangladesh were living in extreme poverty. Of them, 6.5 per cent were in a dire state.
According to this “Global Multidimensional Poverty Index 2024: Poverty and Conflict,” the standard of living was a major indicator of poverty in Bangladesh (45.1 per cent). The next was education (37.6 per cent) and health (17.3 per cent).
This writing began with the White Paper. The White Paper committee submitted its report a month and a half ago, and it is unfortunate that there are no visible measures undertaken by the government in this regard. The government has also formed 11 commissions, and four have given in their reports so far — the constitution, electoral system, police and anti-corruption commission reform commissions. The remaining commissions are to submit their reports this month.
These are perhaps good initiatives to take the country on the path of democratisation.
However, the government has not taken any effective measures to resolve the risks of poverty and hunger that have increased due to the spiralling prices of essentials. No commission has been formed to this end. Does that mean Debapriya Bhattacharya’s contention is correct, that the government is not placing as much importance on economic reforms as it is to institutional reforms? The policymakers of the government must understand that no reform programmes will be effective if people remain hungry.
prothom alo