Handing over port operations to foreign firms “not right decision’: Mirza Aziz

Former caretaker government advisor AB Mirza Azizul Islam has said the interim government’s plan to transfer terminal operations of Bangladesh’s main seaport in Chattogram to foreign companies is “not the right decision”.

Speaking on bdnews24.com's policy programme Inside Out, the economist pointed out that, despite isolated incidents of financial irregularities such as under- and over-invoicing, Chattogram Port has not faced significant complaints that would justify foreign oversight.

“We have institutions like the Anti-Corruption Commission and Customs. If these bodies are empowered and supported legally, there is no need to outsource port operations to a foreign firm,” Mirza Aziz said.

His remarks come at a time of heightened political tensions, with opposition parties divided over key government moves, including election scheduling and the creation of a humanitarian corridor to Myanmar.

The economist, who crafted two national budgets during the 2007–08 military-backed caretaker government, warned that the current climate of political instability makes it particularly difficult to draft a coherent budget.

“Back then, political consensus provided a sense of calm. Now, fragmented and often incompatible demands from different parties are creating a volatile policy environment,” he observed.

This atmosphere, he added, is also dampening private investment. “In an uncertain environment like this, private sector investment rarely grows. Our priority should be to reduce this uncertainty,” he urged.

BUDGET CHALLENGES AND ECONOMIC HEADWINDS

Discussing the challenges facing the upcoming national budget, the former finance advisor noted that the government must strike a careful balance in revenue generation, spending, and deficit financing: whether through domestic or foreign borrowing.

He also flagged the recent decline in GDP growth as a major macroeconomic concern.

"Many are saying the growth rate will fall below 5 per cent. That means fewer jobs. Without employment generation, poverty reduction efforts will inevitably stall," he warned.

INFLATION SQUEEZING THE POOR

Addressing Bangladesh's ongoing inflation crisis, Mirza Aziz said rising prices are disproportionately affecting the country’s poorest citizens. “Inflation remains stubbornly high, still above 9 per cent, even if it has dipped slightly. At this level, savers are actually losing money by keeping it in banks, as returns are outpaced by inflation.”

He cautioned that this erodes public confidence in financial institutions and disproportionately hurts low-income populations who lack savings.

“The affluent can dip into their reserves during tough times, but the poor don’t have that option. That’s the real tragedy of inflation,” he said.

The full Inside Out episode aired Sunday on bdnews24.com’s Facebook page and YouTube channel.

UNEMPLOYMENT ON RISE, WHAT SHOULD GOVERNMENT DO?

Bangladesh is facing mounting economic pressures, with unemployment on the rise and inflation remaining stubbornly high. According to the latest figures from the Bangladesh Bureau of Statistics (BBS), the unemployment rate rose to 4.48 per cent in 2024—up from 4.15 per cent the previous year, bringing the total number of unemployed to 2.7 million.

Amid this bleak outlook, former finance advisor Mirza Azizul Islam is urging the government to expand social safety nets, accelerate public investment, and resolve structural barriers to private sector growth.

“We talk of a contractionary budget due to falling revenues,” Mirza Aziz said in the interview. “But social safety net allocations must increase, even under such constraints.”

However, he warned that implementation remains deeply flawed. “Due to political interference, many unqualified people are included, while those in real need are excluded. There are frequent allegations of misappropriation of funds.”

To address this, he called for better governance of safety net programmes alongside expanded funding to support vulnerable groups and unemployed youth.

PUBLIC INVESTMENT DELAYS, PRIVATE SECTOR PARALYSIS

With just 41.3 per cent of the revised Annual Development Programme (ADP) implemented as of April, development spending remains sluggish.

Mirza Aziz noted that in some cases, funds are released even before actual work is completed, leading to poor-quality outcomes.

On the private sector side, he said the country’s chronic energy shortages—particularly in gas and fuel supply—are stifling industrial production. “Factories can’t operate, and sectors like ceramics that use gas as a raw material are hit hard. Without solving the

energy crisis, private investment won't rebound.”

He added that the broader investment climate is being further undermined by ongoing political uncertainty. “Investment won’t grow in this environment. A political consensus on core economic issues is essential.”

Asked whether the financial sector crisis, blamed by the current interim administration on alleged looting under the previous Awami League government, is easing, Mirza Aziz was cautious.

“The root problem is the volume of non-performing loans. This undermines banks’ ability to lend, affecting capital flows and the advance-to-deposit ratio.”

He also voiced concern over the government’s push to merge banks without a clear roadmap. On the stock market, where investor confidence remains fragile, he called for the listing of more credible domestic and international firms and action against corruption within regulatory bodies.

REPATRIATING LAUNDERED MONEY: A LEGAL LABYRINTH

The interim government, led by Muhammad Yunus, has pledged to recover illicit funds allegedly laundered abroad. But Mirza Aziz was sceptical.

“This is no simple task,” he said. “Funds deposited in foreign banks, say, in Singapore or Hong Kong, can only be retrieved through their legal processes. Without a court order, those funds won’t return.”

He cited the Philippines' struggle to recover assets looted under Ferdinand Marcos as a cautionary tale. “After years of efforts, only a fraction was recovered.”

On the government’s controversial proposal to outsource the management of Chattogram Port to foreign companies, Mirza Aziz pushed back.

“Bangladesh has been handling its imports and exports effectively. There are issues like under- and over-invoicing, but those can be addressed by strengthening the Customs Department and Anti-Corruption Commission,” he said.

INDIA’S IMPORT BAN: A BLOW TO TRADE

India’s recent decision to ban imports of key goods from Bangladesh, such as garments and processed foods, via land ports is likely to harm bilateral trade, Mirza Aziz warned.

“This will raise transport costs and disrupt exports. If Bangladesh retaliates, import costs will rise further, especially if we turn to markets like China.”

He called for diplomatic engagement with the Indian leadership to reverse the restrictions.

SUDDEN NBR SPLIT MAY UNDERMINE REVENUE

Finally, Mirza Aziz cautioned against the interim government’s recent move to split the National Board of Revenue (NBR) into separate entities.

“While this model exists in other countries, it requires planning. The decision should not have been made without consultation with current NBR officers.”

He warned that tax officer protests over the reform could negatively affect revenue collection, urging a more inclusive, phased approach.

Even in a contractionary budget, he said, critical spending on health, education, infrastructure, and social protection must not be compromised.