Economists and business leaders said that the interim government must prioritise data reforms as the previous administration has not only mismanaged but also manipulated data on multiple sectors, making it a challenge to devise effective policies based on the current information.
They raised the question about the effectiveness of increasing interest rates in controlling inflation, particularly amid rising production costs and ongoing gas shortages.
These issues were highlighted at a discussion titled “Dialogue for Democratic Reconstruction” held at the Bangladesh Institute of International and Strategic Studies (BIISS) auditorium in the capital on Saturday.
The Centre for Governance Studies (CGS) organised this dialogue to explore economic policy reform topics, including issues in the banking sector and handling of external loans.
CGS Executive Director Zillur Rahman moderated the event.
Chief Adviser Dr Muhammad Yunus outlined several areas of reforms, which have served as a foundation for these dialogues.
Anwar-ul-Alam Chowdhury Parvez, President of Bangladesh Chamber of Industries (BCI), said, “No one is at ease right now. Inflation is a key factor, and production costs are rising. There is no gas supply, disrupting production. Interest rates are also continuously increasing, making it difficult for anyone to enter the business sector in this environment of uncertainty.”
He said that many now seek an ‘exit policy’ and emphasized the need to restore confidence and ensure security for everyone involved.
Parvez dismissed claims that business leaders were preferential beneficiaries under the previous administration, saying, “It is often said that everyone benefited en masse. I certainly didn’t, and neither did 99 percent of people.”
Mir Nasir Hossain, a former President of the Federation of Bangladesh Chambers of Commerce & Industry (FBCCI), echoed the same, saying that higher interest rates were making business operations challenging.
“Interest rate hikes are being imposed, but which businesses will benefit from this? We need to address these issues. How can any industry survive under such high-interest rates?” he asked, expressing his concerns over the government’s restrictive monetary policy.
Opposing contractionary monetary policy as a means to control inflation, Hossain remarked, “I am surprised to see the focus on reducing money supply in the market to curb inflation. This is just one tool. However, if we ignore the significant costs incurred through illicit market fees across various hubs in Dhaka, inflation won't decrease in any real sense.”
Despite paying increased prices, there are still shortages in electricity and gas, he noted, saying, “I admit that an interest rate of 6-9 per cent might not have been entirely justified, but not every sector has the same tolerance level. Business operations cannot withstand such immense pressure.”
Hossain also raised the question about the future of investments, “If existing investments cannot be sustained, then how will new investments be pursued?”
Debapriya Bhattacharya, head of the white paper preparation panel on the state of the economy, emphasized the necessity of economic and institutional reforms before the next national election.
He warned that without addressing economic stability, the progress of institutional and electoral reforms could face obstacles.
He said, “The idea of moving forward solely on institutional and electoral reforms without tackling the economy’s current vulnerabilities would be a mistake.”
He underscored that current policymakers must prioritize areas requiring immediate attention, adding, “Economic stability can only be ensured if fair wages for workers and just prices for agricultural goods are achieved."
Md Sabur Khan, chairman of Daffodil International University, highlighted that nearly all data in Bangladesh is unreliable due to malpractice.
“If you’re basing your policies on inaccurate data, how can those policies yield positive outcomes?” he questioned.
He pointed out that while the population is estimated at 18 crore, the actual number is likely much higher.
With an inaccurate population count, other data—such as food demand and per capita income—fails to reflect the real figures, he noted.
“The primary priority should be to correct the data and establish a sustainable and accurate data system,” he added.
The speakers included Munira Khan (Chair, CGS), D. Rashed Al Mahmud Titumir (economist), Parvez Karim Abbasi (East West University), Prof Sayema Haque Bidisha (DU Pro-VC), Shahidul Islam Zahid (Professor, DU), Abdul Awal Mintoo (former FBCCI President), Muhammad Abdul Mazid (Chairman, Social Development Foundation), Md Jashim Uddin (former FBCCI President), Shahedul Islam Helal (former BCI President), Asif Ibrahim (FBCCI Committee Chair), Abdul Haque (Barvida President), Sabur Khan (DIU Chairman), Prasenjit Chakma (Chief Consultant, Padeco Co Ltd), MS Shekil Chowdhury (Centre for Non-Resident Bangladeshis), Dr M Abu Eusuf (DU), Suprova Suvha Zaman (DU student), Sadik Mahbub Islam (DU alumnus), and Saleh Ahmed (political analyst).
Zillur Rahman observed that the term ‘reform’ has long been part of Bangladesh’s national vocabulary, and once a disparaged concept, it has resurfaced with prominence after the mass uprising. People are now seeking change, as many institutions are not functioning as intended, he added.
Munira Khan talked about corruption, noting that it would be less problematic if illicit funds remained within Bangladesh. However, a significant amount of these funds is laundered abroad, a trend that must be halted.
Rashed Titumir addressed rising prices, noting that Bangladesh is a substantial importer of food.
Although past narratives blamed external factors for price hikes, particularly oil affecting fertiliser costs, he questioned why importers have not engaged in dialogue with the government.
He also asked why a comprehensive social welfare system, using the National ID system, has not yet been implemented.
Titumir questioned why the previous government’s budget framework is still being followed, despite insufficient industrialisation. Bangladesh could leverage Professor Yunus’s international reputation to attract industry but has yet to take full advantage of this.
Parvez Karim Abbasi stated that Bangladesh’s economic recovery prospects for the next few years remain slim. He argued that the prior government mismanaged rather than misgoverned the economy, leaving Bangladesh to bear the cost.
While US imports of Bangladesh RMG have increased, exports to the US have declined, partly due to Indian competition and lobbying efforts portraying Bangladesh as unstable.
With international debt continuing to rise, Abbasi stressed that addressing corruption and retrieving laundered money, though popular topics, require political will and unity, especially as significant reforms are nearly impossible under an unelected government.
Abdul Awal Mintoo explained that only 5% of the workforce enters government jobs, leaving the private sector as the primary employer.
He pointed out that investment, crucial for job creation, depends on a stable socio-political environment. But, he said, Bangladesh’s low savings rate hampers investment.
Mintoo argued that political and economic issues are intertwined, and without political stability, economic recovery will remain out of reach.
Asif Ibrahim highlighted that Bangladeshi youths often feel excluded from the political process, as many have never voted. Survey data indicates that young people view a lack of transparency, accountability and vested interests as detrimental to the economy.
Ibrahim proposed a job registration system and a youth credit card programme to facilitate access to loans and employment, and called for a commission to monitor essential commodity prices, as well as long-term private-sector financing mechanisms.
Prasenjit Chakma suggested that digital platforms could disrupt market syndicates by linking producers directly with consumers, and called for affirmative action and tax incentives to support Aboriginal communities and SMEs.
Former BCI President Shahedul Islam Helal criticized the prevalence of corruption, saying, "Nothing happens without bribery. We are losing a generation to this culture, which must change."
Shekil Chowdhury, President of the Center for Non-Resident Bangladeshis, commented that banks have become political tools, noting that many entrepreneurs are now political figures rather than commercial leaders.
