Importance of economic governance

While speaking at a discussion meeting titled "Bangladesh Economy 2025-26: Policy Reform and National Budget", a number of leading economists of the country have recognised slight improvement in inflation and stability in the foreign exchange market but felt disappointed at the interim government's failure to effect any structural construct and improved governance in the economic sector. The economic reforms and strategies recommended in the white paper and the task force report respectively have been ignored, they complain. Essentially, the economists including Dr Debapriya Bhattacharya, head of the 12-member committee responsible for preparing the white paper on Bangladesh's economy, and other members of the committee have raised the issue of leadership in the financial sector at a time when Bangladesh finds itself at a crossroads. A highly challenging time demanded a bold and innovative recipe for initiating the process of economic transformation if not an outright turnaround by this time.

Such an active, innovative, dynamic and strategic shift is missing.  The spirit of the July-August uprising backed such a paradigm shift in economic transformation but this has not happened. Why the interim government could not do justice to the hope reposed in them is their overreliance on the bungling bureaucracy. Dr Debapriya has cited a specific example on this. According to him, of the nexus of looters of national wealth, corrupt 'politicians have fled, business groups have become subdued and the bureaucrats have now reinvigorated'. It is quite natural that the bureaucrats have become accustomed to seeing not much merit in any radical shift in economic policy formulation and implementation. The kind of structural transformation needed to reduce or eliminate anti-equity bias is unlikely to be favoured by the bureaucracy known for maintaining status quo because their interests, sometimes unholy, are best served in the process. They consider a pro-people stance a threat to their lofty and secure position.

It is exactly at this point, a more dynamic leadership was in demand for lifting economy from the morass largely a creation of the previous government of Sheikh Hasina. The economists feel aggrieved because to them economic reform should have received the highest priority but, they allege, it has not. If economy wobbles providing no comfort for the nation, other reforms which allegedly are getting higher priority will not be sustainable, they warn. Economic reform directed towards narrowing the yawning gap in wealth distribution and income can certainly address social inequality and disparities.

However, it is a daunting task for any government, let alone an interim one. This world has witnessed the crumbling of socialist economy in former Soviet Union, other East European countries and China to the cheer of market economy that encourages private entrepreneurship and business conglomeration. Perhaps a middle way allowing both big private manufacturing units and businesses to flourish and small and medium enterprises (SMEs) at the grassroots level to take roots with government backing may be an appropriate answer to the economic dilemma. The unemployed figure of 3.02 million recorded in the last quarter of 2024 may reinforce the compulsion for a happy combination of productive sectors in order to create employment. But this has to be complemented by streamlining education, particularly technological and technical types, along with improvement of law and order situation in the country.