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Finance Minister Abul Hasan Mahmood Ali is trying to put an end to years of extravagant budgets with large deficit-to-GDP ratios and bring spending under control amid pressure on financial resources.
The Tk 7.97 trillion budget he is preparing to propose in parliament on Thursday has a deficit roughly equivalent to 4.5 per cent of the GDP.
An attempt is usually made to keep budget expenditure lower than 5 per cent of GDP. However, since the fiscal year 2013-14, the deficit has always been more than 4.9 per cent of GDP. It rose to 6 per cent during the pandemic.
Shifting away from that trend, Mahmood Ali has arranged government spending with a somewhat more restrained hand.
When attention was drawn to this matter, the finance minister told bdnews24.com on Thursday afternoon, "We have tried our best to provide a budget for the welfare of the people despite various adversities. We have cut back as far as possible because adding money unnecessarily to the budget will not help. Preparations for that are going on now, which you will see after a while.”
Mahmood Ali, who started his career with a brief stint as an economics teacher, spent most of his life as a diplomat for Bangladesh in various parts of the world. Prime Minister Sheikh Hasina gave him the responsibility of foreign minister after he successfully completed his job in the foreign affairs cadre and joined politics.
After that, he saw a five-year break from the cabinet. With 81 years of accumulated experience, he took on the responsibility of the Ministry of Finance. He has been busy at home and the office for the past few days trying to reconcile the expenditure of nearly Tk 8 trillion in his first budget.
Former finance minister AHM Mustafa Kamal presented five budgets and former finance minister Abul Mal Abdul Muhith presented 10 before the start of the fourth consecutive term of the Awami League government.
Mahmood Ali’s first - the 54th budget of an independent Bangladesh – comes at a difficult time.
The economy is plagued by a range of serious problems, including inflation, the dollar crisis, devaluation of the taka, and the difficult realities that have arisen in implementing various reforms suggested by the IMF.
The finance minister’s budget will also be the government’s final opportunity to prepare the country as it transitions away from the status of a least developed country.
Mahmood Ali, a distinguished student of economics at Dhaka University, taught in his department for some time in 1964 before joining the Pakistan Foreign Service in 1966. After two years, he was posted as the vice-consul in New York.
When the Liberation War started in 1971, Mahmood Ali renounced his allegiance to Pakistan and was appointed as the representative of the Provisional Government of Mujibnagar to the United Nations. He played an important role in gaining international support for independence.
Even after the independence of Bangladesh, the professional diplomat played various important roles in New Delhi and New York, Beijing, Germany, Nepal, and the United Kingdom.
Following his retirement in 2001, Mahmood Ali entered politics. He has been serving as a Member of Parliament since 2008. Following his term at the Ministry of Foreign Affairs, he was assigned to the Ministry of Disaster Management and Relief for some time.
Now he is taking on the responsibilities of finance minister. His partner in this new endeavour is former banker Waseqa Ayesha Khan, Bangladesh's first female state minister of finance.
Recently, while speaking to journalists about the budget, the finance minister said, “Challenges exist. There is inflation, reserves, revenue, the value of the dollar, etc. Now the loan defaulters have to be caught. I want to catch them."