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Formulate Mid-Term recovery
Package and expedite reforms

 

In the backdrop of the formidable challenges faced by the economy at present, the design of a comprehensive recovery package for the next 2-3 years, and expediting the long overdue structural reforms should be seen by the GOB as tasks which should be addressed urgently. These suggestions were made by Dr. Debapriya Bhattacharya at the dialogue on Bangladesh Economy and Forthcoming Development Forum 2002 organised by the Centre for Policy Dialogue (CPD) held on 6 March, 2002, at the CIRDAP Auditorium, Dhaka. The keynote presenter also recommended a conscious short-term compromise between the economic growth and macroeconomic stability and drastic structural reforms on the basis of political consensus. He pointed out that the twin shocks emanating from the yawning fiscal deficit and deteriorating balance of payment had exposed the entrenched vulnerabilities of the Bangladesh economy. " It seems that both the pillars of success of the macro-economic stability and growth- are in peril," he noted.

Dr. Bhattacharya suggested a freeze on revenue expenditure in real terms as well as avoidance of any expenditure-enhancing populist decision. Public expenditure growth rate should be lower than the revenue receipts growth rate, he also observed, adding that the government should declare fiscal deficit target for a longer period.

Presided over by CPD Chairman Prof. Rehman Sobhan, the Chief Guest of the dialogue Finance and Planning Minister Mr. M. Saifur Rahman endorsed the views presented in the keynote presentation and added that the key to economic progress was good governance and constructive politics - the two interrelated phenomena that remain absent in Bangladesh. He reiterated that a conducive law and order situation is a precondition for investment and development.

Referring to the downslide of the economy the Minister said, "All existing facts and figures are inherited. The deficit financing ballooned to a jumbo size and the interest payment doubled during the tenure of the previous government. " Speaking on



CPD Chairman and Executive Director with Chief Guest, Special Guest and Guest of Honor at he dialogue on " Bangladesh Economy and the Forthcoming Development Forum 2002"

the development expenditurecut, which the donors are pressing for, Saifur said, " I too, like many others, would not like to cut ADP as it would, to some extent, have negative impact on the employment scenario. But we have no option given the huge deficit financing."

Commerce Minister Amir Khusru Mahmood Chowdhury, the Special Guest, explained that because of the prevailing high interest rates the export sector was losing some of its competitive strength. He was of the view that the crisis in balance of payments was not only caused by the export deceleration but also because of the increased government expenditure and internal and external borrowings with high rate of interest.

Former Commerce Minister and Awami League Presidium Member Tofail Ahmed, the Guest of Honor, said that since its assumption of office the present government has been repeatedly blaming the previous government for all the social or economic hurdles. "But little attention has been paid to the deteriorating law and order situation," he said. Some of the participants,however, underscored the importance of export diversification as a way out of the present slide in exports, whilst some others thought that the GOB should take more pragmatic steps to disinvest the loss-making SOEs.

Among others, former advisor to the Caretaker Government Barrister Syed Ishtiaq Ahmed, former Finance Minister M. Syeduzzaman, former Foreign Minister Barrister Anisul Islam Mahmud, Bangladesh Bank Governer Dr. Fakhruddin Ahmed, former Bangladesh Bank Governor Dr. M. Farashuddin, Planning Commission Member Dr. Toufique-E-Elahi Chowdhury, former Foreign Secretary Farooq Sobhan, Bangladeh Economic Association President Dr. Mainul Islam, Prof. Abu Ahmed, Dr. Azizul Islam, General Secretary of JSD Hasanul Haq Inu, GM Quader MP, FBCCI Director A. Rouf Choudhury, Dr. Rushidan Islam Rahman, Kaniz Siddiqui were also present.

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CPD hosts 3rd BCIM conference
Boost the regional cooperation to tap economic potential
 
The third International Conference of the Bangladesh-China-India-Myanmar (BCIM) Regional Economic Forum has laid emphasis on boosting regional cooperation among the member countries to bolster the economic potentials in the region.

Organised by the Centre for Policy Dialogue the two-day Conference was held on February 6-7, 2002, at BRAC Centre, Dhaka. High level officials, eminent experts, business leaders and members of the civil societies of the four countries participated in the conference. The conference was formally inaugurated by the Foreign Minister Mr. M. Morshed Khan as the Chief Guest with CPD Chairman Prof. Rehman
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CPD Quarterly
January- March 2002