7 days ago

Dealing with data disaster

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That the government entities have been juggling with data is not actually news. It had long been suspected that crucial export data, deliberately or otherwise, were not collated and disseminated properly. This has, firstly, made the economic outlook appear rosy, and secondly, helped the country's international ranking in the various indices. However, both these took a serious hit last week when Bangladesh Bank (BB) revised the country's export-earnings downward by over US$12 billion for the July-April period of the fiscal year 2023-24. Needless to say, this is unheard of and has come as a shock to both policymakers and economists alike. Apparently, we are now being told that this massive revision is due to 'confusion' about the exact definition of 'export' in different laws and policies of the government. What does that even mean?

'Export' apparently means different things to different government bodies. For starters, the Customs Act 2023 has no definition of it and then there is the VAT and Supplementary Act of 2019, where export has been termed as both overseas and in-country export (from Export Processing Zone). To make matters more convoluted, "only overseas shipment is considered export in the Export Policy Order of the Ministry of Commerce". Different definitions by different arms of the government and this has been going on for years. The matter was only laid to rest when the national board of revenue (NBR) redid calculations at the customs level and hence the export value is now down by US$12 billion.

Regardless of any attempt that may be made to downplay the seriousness of the situation, it is a clear indication about the utter lack of seriousness in dealing with proper scrutiny the accuracy of the country's export earnings. Economists have rightly pointed out that this 'data correction' is going to adversely impact Bangladesh's ranking on export and there will be a fallout on the trade deficit and adversely affect current-account balance among major economic indices. While quick admissions of 'errors' at ministerial level may be commended, the question remains precisely why no proper audit system is in place to check these double-entries and duplications of data? Why are different government departments maintaining different sets of data in the first place? Isn't Bangladesh on track to becoming a 'SMART' country through digitisation of records and systems? BB has been right in resizing export data because of the confusing manner in which export data has been compiled. It is interesting to note that customs officials maintain that the Asycuda World system that is used to maintain export-import data which was launched back in 1993 has never had any audit done to crosscheck intentional or 'unintentional' data inputs at customs stations. 

This is a data 'disaster', not a 'correction'. Experts believe since inflated data has been used, a slew of recalculations are in order in terms of GNP, balance of payments, etc. With a drop in export earnings comes GNP/GNI drop, precisely how much is now a matter of calculation. It is now imperative to re-calculate the previous few years to see precisely what has been going on with data because so much depends on export earnings.  Bangladesh may have to pay a cost for this 'error' as it has damaged the country's reputation internationally. However, time has surely arrived for policymakers to swallow the bitter pill of truth and take corrective measures so that public agencies stick to facts, instead of fiction to make the books look good in the future.

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