The Centre for Policy Dialogue (CPD), a think tank, on Wednesday suggested taking immediate step to bring 856 hazardous garment factories under monitoring to avoid tragedies. Khondaker Golam Moazzem, research director of CPD, made the suggestion at a briefing on 'Workplace safety in the garment industry: Challenges to sustain achievement' at the CPD office in Dhanmondi. Read: Bangladesh keen to increase its readymade garments exports to Canada: BGMEA chief Executive director of CPD Dr Fahmida Khatun moderated the event. Other researchers of the organization were present at the briefing. Moazzem said, “There are still many risky garment factories in the country. 1887 factories are under the monitoring of the RMG Sustainability Council (RSC) and 350 factories have been identified as safe.” He said that 659 factories are under the monitoring of the Remediation Coordination Cell (RCC) and a total of 2,896 factories are under the monitoring of RSC and RCC. However, 856 factories, which is around 23 percent of the total factories, are currently not under any inspection. Read: Garments workers burn 3 police bikes at protest demanding pay rise An eye should be kept on how these factories can be brought under security, he said. Moazzem said 856 factories are doing business and exports are also going on but there is no monitoring of them. This number of factories without monitoring is likely to increase and it may go up to 30 percent of the total factories in the near future, he added. Read: Tk 6.62cr worth garments seized at Ctg port “If there is an accident in these factories who will take responsibility? BGMEA and BKMEA will not take responsibility. We want all factories to be made accountable to some organization,” Moazzem said. According to the CPD, 2023 marks the 10th anniversary of the Rana Plaza collapse. In the decade following this disaster, significant initiatives have been taken to improve workplace safety in the garment industry in Bangladesh. In particular, the formation of Accords and Alliances and the activities they operate have provided strong guidance for workplace safety oversights, it said.
The Centre for Policy Dialogue (CPD), a think tank, in its traditional post-budget review on Friday (June 2, 2023) said the proposed national budget of Bangladesh for FY 2023-24 projected ambitious targets for both GDP growth and inflation, without putting forth any realistic measures to achieve them in light of global and domestic crises. The CPD said budget focused on increasing tax-GDP ratio, but the revenue growth target is not realistic, so the volume of deficit financing will ultimately widen. CPD Executive Director Dr Fahmida Khatun led the post-budget review, held at a hotel in Gulshan, and televised live on some tv channels. She said the budget has been placed at a time when the macroeconomic stability of Bangladesh has weakened significantly. REad: Proposed budget targets are challenging: FICCI “The macroeconomic stress is visible on lowering growth of revenue mobilisation and shrinking of fiscal space of current fiscal year (FY 2022-23), soaring borrowing from banks, higher price of daily essentials and decreasing foreign exchange reserve,” she added. The private credit growth projected to 15 percent in FY 2023-24 that was 14.1 percent in 2022-23. As of April 2023, private sector credit growth was 11.3 percent, she said. Replying to a query, CPD’s distinguished fellow professor Dr Mustafizur Rahman said the revenue growth projection in 2023-24, compared with actual revenue achievement of FY2022-23, wpi;d be a massive 39 percent, which is "absolutely ambitious" - perhaps even overambitious. The budget’s growth projection occurred based on a wrong concept, so multi sectoral problems would arrive in the implementing stage of the proposed budget. Read more: Budget 2023-24: Govt allocates Tk88,162 crore in education sector, up 8.2% Mustafiz expected a monetary policy reflecting fiscal policy in light of the budget and controlling measures of higher inflation. Khondaker Golam Moazzem, research director of CPD said the budget technically avoided the capital market development policy, which is very essential for such a developing economy. “Without establishing a realistic and sustainable capital market, investment financing cannot grow, the government incentive based capital market cannot play a role in new investment in the capital market,” he added. Towfiqul Islam Khan, Senior Research Fellow in CPD said curiously, no mention was found regarding the accumulation of external payments arrears or new forex reserve. REad: Finance minister unveils the country’s largest ever budget in Parliament Details about critical reforms, including shifting towards market-based dollar exchange rate and interest rate and adoption of periodic formula-based petroleum product prices, have not been explained in the budget speech, he said. The CPD projection said Bangladesh's proposed national budget of FY 2023-24 targets 15.5 percent growth will be around 39.7 percent growth target compared to the current budget achievement and Tk1.42 lakh crore is needed to be mobilized.
Inflation, revenue shortfall, dollar crisis the major challenges for economy ahead of election-year budget
Preparations for Bangladesh's national budget for the 2023-24 fiscal must balance expectations in an election year with the conditions of the International Monetary Fund (IMF), and tackle inflation, foreign exchange crisis and revenue shortfall. Balancing public satisfaction and protecting the economy is a major issue. Economists say it has been seen in the past that election year budgets often prioritise public satisfaction over the improvement of the economy. As such, the opportunity to deliver a budget that is satisfactory is very limited, said macroeconomist and public policy analyst Dr Debapriya Bhattacharya, who is also a Distinguished Fellow at the Centre for Policy Dialogue (CPD). Read more: Safeguards are needed to protect vulnerable people under IMF-backed reforms: Debapriya He told UNB, "Before the election, all governments want to give a budget that satisfies the people. But due to the financial situation, fiscal deficit, and trade deficit, the opportunity is very limited for the government. If such a big effort is made, it will have a negative impact on the overall economy." "It is important to remember that this budget will be implemented by two governments. In this budget, flexibility must also be preserved. Because, if the government makes any big promises, there is doubt as to how much they can implement," he pointed out. Dr Debapriya said that the budget is coming at a time of political uncertainty in the country. Plus exit from LDC, and the Covid-19 response revival are issues hanging over the budget. Also read: 11pc of Bangladesh budget allocated for disaster risk reduction: State Minister “Compared to any other year, this year's budget has to be prepared in a very complicated situation. Because earlier, there would be a deficit in terms of income and expenditure in the country, but there would be comparative relief in terms of foreign transactions. But this time it is not,” he opined. Dr Debapriya said, "There has been a major disruption in the growth rate. It is going down further because there is no money, no dollar. There is a huge deficit in both areas to be dealt with together.” So the government has to control imports and limit its investment program. As a result, next year's growth target should also be moderated. Read more: Despite many challenges, Bangladesh remains one of the fastest growing economies in Asia-Pacific: Visiting IMF team "The financial structure has actually weakened," he said. Executive Director of the South Asian Network on Economic Modeling (SANEM) Salim Raihan, also a professor of economics at Dhaka University (DU), said that in the previous election years, the economy was not in such a crisis as this time. "As a result, no new major pressure was created in the economy despite budgeting for public satisfaction at that time. But this time, if the budget is made considering only public satisfaction in view of the election, it will create new pressure on the economy," Professor Raihan said. Read more: Bangladesh’s GDP growth rate will overtake China’s in current fiscal year, IMF predicts
Debapriya Bhattacharya, public policy analyst and distinguished fellow of Centre for Policy Dialogue (CPD), said on Monday that when the IMF takes a reform programme for a country, sometimes inequality increases, because of the conditions they attach. So, safeguards are needed when the IMF is involved in any major reform agenda, said the prominent economist. He made the statement in a dialogue of the CPD-Citizen Platform titled 'How the concern of disadvantaged people can be reflected in the upcoming national budget during the IMF reform period’, held at Bangabandhu International Conference Centre (BICC) in the capital on Monday. Presenting a keynote paper on the topic Debapriya said, when the IMF programme is taking place in a country, it tries to impose an authority on the economy of that country. Similarly, in Bangladesh the global lender imposed conditions of cutting subsidies on energy, electricity, advocated for market-based foreign exchange and interest rates, which could trigger sufferings of the disadvantaged groups. In addition, the IMF has spoken of additional tax-revenue collection. Debapriya said. He said there is no room to disagree with this, but from whom the tax will be collected, that is a big question. He also complained that there is no standard system of tax collection in the country so far. Planning minister MA Mannan was present in the function as the chief guest while Rana Mohammad Sohail MP, member of parliamentary standing committee on finance ministry and barrister Rumeen Farhana, an ex-MP of the current parliament from BNP, were present as the special guests. Advocate Sultana Kamal chaired the discussion while former NBR Chairman Dr Muhammad Abdu Mazid, economist professor Mustafizur Rahman, CPD’s executive director Dr Fahmida Khatun, among others, spoke in the function. Representatives of different disadvantaged groups including old aged, youth leaders, students, physically challenged people, farmers, tribal groups, fishermen, women and cleaners’ community were present. Planning minister MA Mannan said despite efforts made by members of the parliament, the government's allocation often fails to reach the country's underprivileged people. The minister emphasised on how the underprivileged were deprived in different sectors. But Prime Minister Sheikh Hasina understands the sufferings of the disadvantaged groups and she is trying to allocate more in the budget to save them, he said. "Bangladesh is not dependent on the International Monetary Fund [IMF]. The budget is entirely the government's own plan. The IMF is merely a side-actor," he said. The minister also highlighted inflation as the biggest challenge at the moment, though he noted that it had slightly decreased last month. Debapriya said, according to the data of the Bureau of Statistics, poverty has decreased but inequality has increased. The disparity has also increased, alongside consumption inequality, he said. He, however, noted that data on wealth inequality was not available. He also expressed doubts about how much reform could be done depending on indirect taxes. Debapriya recommended the government should maintain a balance between sectors in terms of reforms and sectoral disparity. He also emphasised on the need to raise direct taxes to minimise the tax burden on the lower income group of people.
One of the country's leading think-tanks, the Center for Policy Dialogue (CPD), is working with a political motive to bring a particular party to power, Agriculture Minister Abdur Razzaque said on Monday. “CPD conducts many polls with political motives in mind. They want to bring a particular political party to power and are affiliates of that party,” he said. The AL leader made the remarks while speaking to reporters in the conference room of the Ministry of Agriculture at the secretariat. He questioned the results of CPD's recent survey, 'Corruption Still the Biggest Barrier to Business in Bangladesh,' saying, "People need to know their survey method. Their survey method and objectivity are highly questionable. They are neither sinless nor unbiased." Also read: Business environment in Bangladesh deteriorated in 2022, says CPD He stated that countries such as the United States, Japan, and India experienced negative growth as a result of the Covid pandemic and the Russia-Ukraine war, and asked, "How does the CPD perceive Bangladesh's positive growth despite this situation?" Abdur Razzak also stated that corruption exists in countries such as the United States and Germany, as well as in Bangladesh. "Khaleda Zia was imprisoned on corruption charges. Corruption has not yet been completely eradicated," he said. During the meeting, the minister discussed increasing agricultural exports and the progress of implementing export roadmaps. He said that two roadmaps were implemented in order to increase agricultural goods and potato exports. He also mentioned that the ministry is working to reduce some barriers, such as banking complications and the allocation of export incentives.
Centre for Policy Dialogue (CPD), a think-tank, has raised questions about the necessity of power tariff enhancement against the backdrop of the concerned ministry’s reported proposal for an allocation of Tk 56,860 crore as subsidy. “We don’t understand why the Ministry of Power, Energy and Mineral Resources wants to raise power tariff at the retail level when it seeks such a huge amount as subsidy,” said CPD research director Dr Khondaker Golam Moazzem while making a presentation on the interim report on the proposed “Integrated Power and Energy Master Plan (IEPMP) on Thursday at CPD office. Referring to the report, he said that of the total proposed amount, Tk 32,500 crore was sought for state-owned Bangladesh Power Development Board (BPDB) for power sector, Tk 19,360 crore for Bangladesh Petroleum Corporation(BPC) for petroleum import and Tk 5,000 crore for Petrobangla for LNG import. Read more: BERC now to consult with govt before any move on retail power tariff hike proposals “We don’t agree with a proposal of reducing subsidy by raising power tariff,” he said adding, Rather, the government should go for a phase out plan to retire the costly rental and quick rental power plants to reduce the cost of power generation. The CPD research director said state-owned BPC is now making huge profit instead of incurring loss in its petroleum business after enhancement in fuel prices as the global fuel price is showing a declining trend. He claimed that the BPC is now making a profit of over Tk 30 per litre in selling the diesel. Responding to a question, he said the ministry sought such a huge amount as subsidy might be due to an inflated calculation. CPD executive director Dr Fahmida Khatun also spoke on the occasion. Appreciating the government’s initiative for adopting the Integrated Power and Energy Master Plan (IEPMP) , Dr Golam Moazzem said this has some positive and negative aspects. Read more: Raising retail power tariff: 3 more distribution companies submit proposals "But despite that we appreciate the move as it has much more focus on renewable energy promotion than before,” he said. He, however, said that the government is now shifting from its original target of generating 40 percent of electricity from renewable energy by 2041. “We see a major change in the statements as they now say the target is “up to 40 percent” by inclusion of word “Clean Energy” instead of renewable energy,” he added. He also observed the government was trying to shift from the coal-fired power’s phase out plan by introducing “Carbon Capture Technology”. The developed world is now coming away from this technology because it is not environment-friendly as such technology is used to capture carbon from the coal-fired power plants. He said the cost of solar and other renewable energy (RE) options is coming down globally and generation of 16,000 MW of electricity, which is the targeted 40 percent of total planned power generation, is very much possible. Many local and foreign investors are ready to invest in the RE sector. “The RE technologies are getting cheaper day by day. The government should go for proven technology in this regard instead of unproven ones,” he said. He also observed that the government ultimately wants to promote import of LNG (liquefied natural gas) through the proposed master plan while the RE did not get proper attention in it. “RE has not been avoided in the proposed master plan, but it was ignored,” he said.
Economists, during a discussion today, said the country’s banking sector is under threat due to lack of trust and good governance in banks. Certain groups are influencing Bangladesh Bank’s regulatory decision-making, which is alarming for the economy, the economists added. They made the observations at a discussion on ‘Managing the Economic Crisis’, organised by the Centre for Policy Dialogue (CPD), at a Dhaka hotel on Saturday. Minister Abdul Mannan attended the event as chief guest while Professor Dr Rehman Sobhan presided over the function. Former governor of Bangladesh Bank Dr Salahuddin Ahmed; economist Dr Ahsan H. Manur; former Chief Economist of World Bank’s Dhaka Office Dr. Zahid Hossain; Professor Abu Ahmed; Barrister Shamim Haider Patwari, Member of Standing Committee on Ministry of Law, Justice and Parliamentary Affairs; Rupali Haque Chowdhury, Managing Director, Berger Paints; Kamrul Islam, secretary of Bangladesh Garment Workers Solidarity, also spoke at the function. Dr Salehuddin said, “If Bangladesh Bank can handle policy implementation rigorously, including defaulted loan collection, I believe the situation will improve.” “But the central bank has to take the right policy independently, not look at anyone's face, as the current economic situation demands it,” he added. Read more: Stick to global lending sources for long-term, low-interest loan, CPD tells govt Any delayed decision of Bangladesh Bank, and the situation will worsen, he said. Citing an example, he said the total volume of non-performing loans (NPLs) has increased by more than three times in the last 10 years since 2012. The NPLs increased over Tk 1.34 lakh crore in the first quarter of the fiscal year 2023 from Tk 42725 crore in the fourth quarter of FY2012, as per a report of the central bank, he said. He said the economy is standing at a point where it has to have proper reforms or be ready to see its collapse. Executive Director of Policy Research Institute, Dr Ahsan H. Mansur, said deposits in the Brac Bank grew 27 percent in the last month as people are looking for good banks for the safety of their money. “So, trust and good governance can save a bank.” He said that rigorous and exemplary punishment for loan scams is needed to gain people’s trust, appointing an observer is not enough. Dr Zahid said the inflation is not created by external effects, domestic demand and GDP is growing, it does not match with the economy. CPD Executive Director Dr Fahmida Khatun placed a report titled "Managing the Economic Crisis: CPD's Policy Recommendation" at the event. "Actual NPLs will be much higher if loans in special mention accounts, loans with court injunctions, and rescheduled loans are included," the report said. Read more: No need to hike fuel price if BPC’s corruption and mismanagement end: CPD The CPD mentioned that appointments of bank directors based on political connections, loans sanctioned on political grounds, rescheduling of loans despite poor record of repayment, and writing off loans to reduce the tax burden and clean balance sheets of banks are among the reasons behind the high volume of NPLs in the country. Besides, the weak internal control and compliance risk management of banks, lack of independence of Bangladesh Bank, dual regulation by the Financial Institutions Division and the central bank, and flexibilities given to defaulters by the central bank are also responsible for the high volume of the NPLs, it said.
Speakers at a discussion meeting said the proposals that had been placed in the 12th ministerial conference (MC-12) of the World Trade Organisation (WTO) in Geneva were not getting prioritised due to the negligence of developed countries. They gave the opinion at a discussion titled “WTO-MC12 Outcomes: Next Steps for Bangladesh as a Graduating LDC”, organised by CPD in partnership with Friedrich-Ebert-Stiftung (FES), Bangladesh, held at the CIRDAP conference hall on Sunday. They said Bangladesh is the only country that has adequately utilised the opportunities available as an LDC. The speakers said the country has increased exports using preferential market facilities, but the question now is whether such opportunities will continue. They said the announcement of MC-12 mentions several challenges after graduation, but no promises were made to overcome them. Read: Global trade will grow a lackluster 1% in 2023, WTO predicts CPD’s distinguished fellow professor Dr. Mustafizur Rahman presented a keynote paper on the topic, highlighting that the demands of least developed countries have been ignored in the WTO-MC12. The conference prioritised important agenda for developed and wealthy countries. Dr. Mustafizur said the main agenda of Bangladesh is the LDC graduation. “Most of the six countries with earlier graduations are small economies. Bangladesh is a country that was able to take maximum advantage. But many benefits will be lost after graduation from the LDC. Almost 90 percent of the benefits in the export sector will not be there for Bangladesh,” he said. He said if export performance is to be sustained and improved, shifting from the choice-driven competition to efficiency and productivity-driven competition is very vital. He said that the government should set up a separate and dedicated cell to exclusively discuss and secure Bangladesh's interests in international trade platforms. Read: WTO Conference: Bangladesh speaks against sudden ban on food export He also said that because of the negligence of the rich countries, the graduating countries weaken. “We need to change our mindset considering the future as non-LDC developing country. Priority should be given to issues related to regional cooperation and bilateral trade agreements,” Dr. Mustafiz said. Yussuf Abdullah Harun, MP, Member, Standing Committee on Ministry of Commerce, was present as chief guest while Dr. Debapriya Bhattacharya, Distinguished Fellow of CPD, chaired the programme. Tapan Kanti Ghosh, Senior Secretary, Ministry of Commerce, Md. Jashim Uddin, President, Federation of Bangladesh Chambers of Commerce and Industries (FBCCI), Hafizur Rahman, Director General, WTO Cell of Ministry of Commerce, and Dr. Mostafa Abid Khan, Trade specialist and former Member of Bangladesh Tariff and Trade Commission, Felix Kolbitz, Resident Representative of FES spoke at the event.
Eight prominent personalities have been awarded by the Rotary Club of Uttara, a leading club in Bangladesh, recognising their contributions to society. Dr Debapriya Bhattacharya, an economist and distinguished fellow of the Centre for Policy Dialogue (CPD), was among the awardees for his role as a policy analyst at home and abroad, said a press release on Saturday. The other awardees are educationist and former Principal of Dhaka College Professor Jahanara Begum, Debate for Democracy Chairman Hassan Ahmed Chowdhury Kiron, Jamuna TV Special Correspondent Mohsin Ul Hakim, Bangladesh Tennis Federation’s Secretary General ASM Haider Ali, Corporate Sector personality Maruf Satter, Exim Bank’s Managing Director Haider Ali and Agriculturist Professor Md Abdul Wahab. Also read: 10 banks, 5 NBFIs get BIBM awards for sustainable financial performance Commerce Minister Tipu Munshi attended the programme as the chief guest.
Noted Economist Dr Debapriya Bhattacharya on Thursday called for a ‘transitional policy understanding’ to overcome the ongoing financial turmoil in the country’s economy. "The main villain of the economy is the weakness of the financial sector. The reason for this is the lack of reforms that have been accumulating for a long time. Its effects are now visible. We are unable to move forward without a transitional policy,” he said. Debapriya, a distinguished fellow of think tank Centre for Policy Dialogue (CPD), made the remarks at a media conversation with economic reporters on “Overcoming the Current Economic Challenges – Towards a Transitional Policy Understanding.” Also read: A roadmap needed for debt repayment of 20 mega projects: Debapriya “The current crisis is only a symptom of the disease, because of the lack of reform. He said that the government has to reduce the subsidy to deal with the crisis in the financial sector. But now it was more necessary to give subsidies to protect poor people to control inflation,” he said. He said Bangladesh’s economy is yet to go back to the pre-COVID benchmark and experiencing fragmented recovery and macroeconomic stability is under high stress, particularly due to inflationary pressure and unstable foreign exchange rate with the local currencies. Besides, the global economy’s prospects for FY23 --commodity price rise, supply chain disruption, and logistic, increase in transportation cost – are bad for Bangladesh, he argued. In such a situation the economy needs a transitional policy understanding for a period of 2-3 years to overcome the uncertainties (national and global) for stabilization and consolidation of the economy with a short-term outlook. Export-Import deficit of USD $33.25 billion, the current account deficit of $18.70 billion, and the overall external deficit of $5.38 million, these are the symptoms of the disease, not the disease itself, he mentioned. The revenue share in GDP did not go up more than 10 per cent of GDP, the share of income and asset tax in total revenue stagnated at around 30 per cent, and the budget deficit was increasingly being funded by borrowing from banks, all are the elements of fiscal mismanagement, he said. Also read: Food production, price control should get prioritised in budget: Dr. Debapriya In reply to a query, he said the recent fuel oil price hike is disagreeable and imprudent, the economy will not be benefited from this move in the current context domestic economic situation, he said. Debapriya pointed out that the government has cut subsidies in the oil sector, which are now diverted to pay the capacity charge of rental power plants. He urged to increase the interest of bank lending to 12 per cent for a moderate credit growth, and protect depositors increasing its rate to 8-9 per cent. He also called for ending the direct central bank’s interference in fixing the exchange rate, rather it should be fixed by the competitive market rate. In reply to another query, he said people will pay revenue eagerly when they can see transparency and adaptation in government expenditure including procurement.