CPD
‘Rich countries ignoring proposals regarding LDC graduation’
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.
Rotary Club of Uttara awards Dr Debapriya , 7 others
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.
Economy needs transitional policy to overcome the crisis: Debapriya
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.
A roadmap needed for debt repayment of 20 mega projects: Debapriya
Economist Dr Debapriya Bhattacharya on Thursday called for a roadmap for debt repayment of the top mega projects which will be started between 2024 and 2026.
“A major shock is coming to the economy between 2024 and 2026 in terms of debt repayments for mega projects that cause concern for the economy. A plan is needed to deal with this situation,” he suggested.
Dr Debapriya, a special fellow of the Center for Policy Dialogue (CPD), a private think tank, spoke to reporters about 20 mega projects in the country in a virtual conversation on Thursday.
Also read: Mega projects won’t affect the economy: PM
He also said currently the ratio of foreign debt to gross domestic product (GDP) is 1.1 per cent which may be doubled by 2026.
In response to the question of whether Bangladesh will be in trouble or not, he said, it will actually depend on how the country's reserve situation is at that time, and how well the economy remains.
Debapriya also said that Russia, China, and Japan will have to pay more for big projects. Among them, China's debt repayment period is quite short.
Also read: Huge amount of money being siphoned abroad from mega projects: BNP
He analyzed 20 mega projects, including Padma Bridge, Rooppur Nuclear Power Plant, tunnel under Karnaphuli River, Matarbari coal-based power plant, metro rail, rail connection of Padma Bridge and others.
About Tk5.57 lakh crore is being spent on these projects. About 62 per cent of this is foreign debt.
Debapriya also said that since 2009 there is a kind of national consensus on taking up big projects. Politicians show interest in it as visible development can be seen if big projects are implemented, he said.
Even though 20 projects are scheduled to be completed by 2028, Debapriya said that it will not be possible to complete all of them in the current decade.
He also pointed out that there is a lack of transparency and accountability in project implementation.
Capacity payment to private sector power plants goes up to Tk 26,505 crore in FY2022: CPD
The Centre for Policy Dialogue (CPD) at seminar on power and energy sector budget has said that the capacity payment to private sector power plants, including rental and quick rental plants, has gone up to Tk 26,505 crore in FY2022 from Tk 5,600 crore in FY2018.
“This capacity payment obligation has forced the government to move for increasing power tariff”, said CPD research director Dr Khondaker Golam Moazzem, while making his keynote presentation titled: “Energy and Power Sector in the National Budget for 2022-23” at a hotel in the city on Sunday.
According to the CPD, the amount of capacity payment could reach Tk 31,600 crore in FY2023.
Also read: Proposed budget’s social safety allocation not enough, speakers say at CPD dialogue
With CPD executive director Dr Famida Khatun in the chair, the function was also addressed by Power Cell director general Mohammad Hossain, eminent energy experts Dr M Tamim, Dr Badrul Imam, advisor of Consumers Association of Bangladesh (CAB) Dr M Shamsul Alam, president of the Bangladesh Independent Power Producers Association (BIPPA) Imran Kabir, former chairman of Bangladesh Atomic Energy Commission Shafiqul Islam, Prof Dr Kader and social worker Khushi Kabir.
Moazzem said that the country’s surplus electricity which was termed as the over generation capacity of electricity has increased to 10,764 MW in 2021-2022 from 8231 MW in 2020-21 with a jump to 42.12 per cent from 37.37 per cent. The current total electricity generation is 25,556 MW.
He observed that the government’s access to electricity target has been achieved, but people are not getting the full benefit because of the lack of transmission and distribution facilities.
He said the budgetary allocation for the FY2022-23 also shows that the two segments of electricity are not receiving the due attention from the government as the generation segment is dominating in the allocation.
Mohammad Hossain disagreed with figures about the over generation capacity and said that it is not logical to show the capacity payment separately as such cost is calculated as production cost.
Dr Tamim said the country aggressively needs to pay attention to the development of the primary energy sector.
Also read: Budget offers no good news for lower, middle income groups: CPD
“But there is no such initiative from Petrobangla to move for local gas exploration”, he said, blaming a leadership crisis in the organisation.
He said it is not clear why Petrobagla failed to prevent the fall in production at its existing gas fields while the foreign company Chevron successfully kept its production at higher level at its Bibiyana field.
“This might be that the government is emphasising on meeting the gas crisis through import”, he said.
He also observed that the Titas Gas’s system loss is 7 per cent which means 150 million cubic feet per day (MMCFD) of gas is being stolen everyday while the country has to import a huge amount of gas from abroad.
Dr Imam said the government has no success story in the energy sector although energy is the primary supplier of fuel to the power sector.
He said the gas production is decreasing day by day and it will be fully depleted in the next few years.
“But no initiative is visible from the government to drill for gas exploration”, he said in the last 26 years only 26 wells were drilled while there are huge prospects for gas and oil in the country as it is the biggest delta in the world.
Most of the oil and gas reserves were discovered in the deltas in the world, he added, saying the US Geological Survey study shows the country has a prospect of 42 trillion cubic feet gas reserves.
He said the government has to annually spend Tk 44,000 crore to import gas from abroad to meet the local demand.
Dr Shamsul Alam said the government is giving huge benefits to the private sector power producers through “predatory cost” which plays a major role in increasing power tariff.
He alleged that the government is paying Tk 92 per litre of furnace oil for power generation at private plants while the state-owned Bangladesh Power Development Board (BPDB) is costing this furnace oil at Tk 72 per its own plant.
He said 95 percent of furnace oil based power plants are being operated by the private sector and for this way the government is paying Tk 8,100 crore to the private power plant operators.
He said the power sector has been a good ground for looting of state wealth. Without preventing this theft, the crisis in the power and energy sector will not be resolved.
Imran Karim said the country’s actual power generation capacity is 16,000 MW while the daily production is 13,500 MW as many plants are not being operated due to the gas crisis.
Defending the private sector’s role in power generation, he said electricity generation cost will be lesser if furnace oil is used for power generation instead of imported LNG as the price of furnace oil has decreased in recent days.
Proposed budget’s social safety allocation not enough, speakers say at CPD dialogue
The allocation for the social safety programmes in the proposed budget for FY2022-23 is not enough, experts at a dialogue of the Centre for Policy Dialogue (CPD) said Thursday.
The inclusion of pension benefits and interests on saving certificates included in social safety programmes is depriving the lower-income group, they said.
The experts also called for increasing allocation for labour welfare and keeping a portion of industries' or factories' profit for workers.
Dr Famida Khatun, executive director of CPD, chaired the discussion. Dr Khondaker Golam Moazzem, research director of CPD, delivered the keynote presentation on the proposed budget.
Planning Minister MA Mannan joined the dialogue as chief guest.
Chairman of the Parliamentary Standing Committee on the Ministry of Expatriates Welfare and Overseas Employment Anisul Islam Mahmud, Member of the Parliamentary Standing Committee on the Ministry of Finance Kazi Nabil Ahmed, and former commerce minister Amir Khosru Mahmud Chowdhury attended the discussion.
Mannan said, "The government cannot slash incentives in different sectors suddenly. It will take time."
"The government provides food assistance to the lower income groups through family cards and open market sale (OMS),” he said.
Amir Khosru questioned the transparency of the government's inflation and forex reserves data.
The Bangladesh Bank has so far disbursed $7 billion EDF loans from its reserves.
However, the International Monetary Fund said the central bank overstated foreign exchange reserves by showing the EDF with it.
At the dialogue, different NGOs urged the government to make the grant disbursement process, which also adds to the forex reserves, easier.
At present NGOs are receiving around $700 million as grant.
Also read: Budget offers no good news for lower, middle income groups: CPD
Gender budget framework needs to be redesigned, say discussants at a pre-budget dialogue
Increased collaboration between ministries and data-based monitoring of expenditures are required for a better implementation of gender budget, said discussants at a pre-budget dialogue on Monday.
Ahead of the national budget, Plan International Bangladesh and Centre for Policy Dialogue (CPD) organised the dialogue titled “National Budget Addressing Gender Based Violence” at Pragati Insurance Building, Karwanbazar in Dhaka.
The discussants said, women’s development is at the core of the overall development plan of Bangladesh. In the national budget, the gender budget is allocated for a number of ministries.
Collective data on the specific expenditure of the ministries preventing child marriage and violence and proper monitoring will play an effective role in reducing gender-based violence through further planning.
Also read: Fiscal policy support needed for economy to tackle inflation: CPD
Nadia Nawrin, Programme Associate, CPD made an introductory presentation at the programme on “Budget Framework Analysis on Challenging Fear of Violence”, a recent report produced by Plan International Bangladesh and CPD.
While presenting the analysis, she said that Bangladesh has made significant progress on several Sustainable Development Goals (SDGs).
This progress is also evident in SDG 5 on gender equality and women's empowerment. Despite Bangladesh's remarkable economic progress, violence against women is still widespread and unstoppable, said the paper.
In addition, other factors remain: lack of adequacy, monitoring and reporting mechanism and lastly, the relevant budget does not address fear of violence.
The analysis recommends that in order to address and eliminate the fear of violence among girls and women, the current gender budget framework has to be redesigned.
Awami League MP Aroma Dutta said, the government prioritises gender budget. There are 36 ministries under which gender budget is allocated.
But, for monitoring its proper implementation, “we must ensure collective data on the expenditure. This will also support addressing the challenges of the existing laws and acts against gender-based violence.”
Also read: CPD, ILO bring together stake holders to develop national industrial safety framework
The MP also urged a greater campaign against gender-based violence.
Girls’ Rights Director of Plan International Bangladesh, Kashfia Feroz, said, the fear of violence exists everywhere- from home to public space.
In a recent survey of Plan International Bangladesh, we have found that, 35% of the survey participants believe sexual harassment is one main reason behind child marriage, while 25.6% believe parents marry their daughter off at a young age due to fear of violence. 62% parents shared that they fear to send their daughters to school picnic while 54.1% fathers fear sending their daughters to private tutors due to the same fear.
Executive Director of CPD, Fahmida Khatun, said, fear is an intangible thing which makes it difficult to reflect in the budget. Fear is increasing everywhere in the world. This impacts not only the individuals but the entire society and the state affecting the economy.
She also called for ensuring budget allocation to ensure strengthened implementation of existing laws and acts preventing gender-based violence.
Among others, Shima Moslem, General Joint General Secretary of Bangladesh Mahila Parishad, Dr. Tania Haque. (Professor). Department of Women and Gender Studies of the University of Dhaka, Nobonita Chowdhury Director of Gender, Justice and Diversity (GJD) at BRAC, Sharmind Neelormi, Associate Professor of Economics Department of Jahangirnagar University were present as discussants.
Fiscal policy support needed for economy to tackle inflation: CPD
The economy is under pressure due to challenges caused by global and domestic factors, that are apprehended to continue for some time in view of slower growth in the world economy.
This view was put forward in the Independent Review of Bangladesh’s Development (IRBD) conducted by Centre for Policy Dialogue (CPD), a private think tank, released in a media briefing in the capital on Sunday.
Dr Fahmida Khatun, executive director of CPD, briefed the reporters on the review report. Dr Mustafizur Rahman, distinguish fellow, Khondaker Golam Moazzem, research director, and Towfiqul Islam Khan, senior research fellow, among others, spoke on the review report.
CPD carries out an interim review of the national economy towards the end of every fiscal year. Accordingly, the third interim review of Bangladesh’s macroeconomic performance for FY22 has been undertaken.
Also read: CPD, ILO bring together stake holders to develop national industrial safety framework
The average cost of living on a “regular” diet for one household of 4 persons living in an apartment with one bedroom outside the city centre in Dhaka in May 2022 would be approximately BDT 42,548, the review said.
The review found that higher living costs in the capital are pushing up inflation.
The average cost of living on a “compromised” diet for one household of 4 persons living in an apartment with one bedroom outside the city centre in Dhaka in May 2022 would be approximately BDT 29,206. The difference goes to show the impact of food inflation in particular on ordinary families.
Apart from the high price of basic food items, the high prices of non-food items were putting a huge burden on households. Available data shows that maintaining even a modest standard of living was becoming prohibitively expensive for households in Dhaka.
In the absence of support from the government, out-of-pocket expenditure on health for a household of 4 persons was equivalent to Tk 2,625 per month in 2019, at purchasing power parity, said CPD.
It is apprehended that many households are at risk of falling below the poverty line due to out-of-pocket expenditure on health, CPD predicted.
“This is worrisome for the overall macroeconomic situation and it requires proactive measures by the policymakers both in the immediate and medium terms,” the CPD study recommended.
The quality, reliability and consistency of data of economic indicators will be the first step towards enacting proactive measures since the effectiveness of policy making depends on credible real time data.
Also read: High value public debt spent on nonproductive sector causes imbalance in economy: CPD
Policymakers will have to come out of growth obsession and focus on the quality of growth in terms of distribution of the benefits of growth more equally.
Since the poor and disadvantaged people are yet to overcome the impact of the pandemic and have been affected further due to high prices of essential commodities, the policy should protect the purchasing power of the poor and low-income groups, the study said.
CPD has been proposing various measures to ease the burden of rising prices and shrinking purchasing power of low- and fixed-income earning people including selectively reducing taxes at import and domestic stages and expanding social protection.
Besides, strategic sectors such as energy and agriculture will have to be supported through subsidies for economic growth and food security.
These measures should be combined with higher efforts for domestic resource mobilisation and reduced unnecessary and less important expenditures.
In the FY23 budget, fiscal measures pertaining to the external sector should focus on addressing the adverse impacts of imported inflation, CPD said.
CPD, ILO bring together stake holders to develop national industrial safety framework
The First Industrial Safety Forum in Dhaka organized jointly by the International Labour Organization (ILO) and the Centre for Policy Dialogue (CPD) was held on Thursday.
Think tank CPD brought together national safety regulators, policymakers, academics, employers, workers’ representatives, civil society members and development partners under the ISF to discuss the development of a national industrial safety framework for Bangladesh.
“The infrastructure and institutional preparedness for industrial safety are still at emerging stages in the country. Particularly the building safety, occupational safety and health and environmental sustainability remain outside the core activities in most industrial sectors,” ISF meeting opined.
The ISF aims to inspire and engage the relevant stakeholders to establish a sustainable and transparent industrial safety framework, which will act as a foundation for ensuring workplace safety in all industries across Bangladesh.
Also read: High value public debt spent on nonproductive sector causes imbalance in economy: CPD
Industries Minister Nurul Majid Mahmud Humayun attended the forum as the chief guest.
The minister noted that the forum provided a knowledge sharing platform for the stakeholders to collaborate for ensuring a safe working environment in industries.
Md. Ehsan-E-Elahi, secretary, Ministry of Labour and Employment, stated that the ministry has formed two tri-partite committees to review and amend the labour law to maintain decent workplaces and industrial safety.
“For inclusive growth of the country, the government and the public bodies need to work with the employers and the civil society collaboratively”, said Elahi.
Also read: Under Muhith's leadership economy achieved a number of milestones: CPD
Tuomo Poutiainen, Country (Bangladesh) Director of ILO said, “ISF provided a
platform to discuss, engage and collaborate for improving workplace safety and health in all economic sectors across Bangladesh. We hope the recommendations and commitments shared at the forum will drive the process of developing a national industrial safety framework.”
Speaking at the forum Ardashir Kabir, president of Bangladesh Employers
Federation (BEF) said this will help create interaction to work together for the common cause of raising industrial safety standards.
High value public debt spent on nonproductive sector causes imbalance in economy: CPD
Though Bangladesh remains in a suitable position on public debt, it may be pushed to yellow rate after FY 25 as spending of high value foreign debt increases at the nonproductive sector, a CPD study says.
Both public and private sector debt from external sources have increased in recent past , which would create stress on forex reserves and widen the imbalance of trade, according to the study.
The Centre for Policy Dialogue (CPD), a think tank, presented the study in a programme titled ‘Deconstructing Public Debt of Bangladesh: Trends, Status and Outlook’ organized virtually on Monday.
Debapriya Bhattacharya, distinguished fellow of the CPD, presenting the overall scenario of Bangladesh’s debt said total national debt is increasing at a faster rate than Gross Domestic Product (GDP).
Also read: Sovereign debt set to edge upwards in coming years
He said the macro economy of the country will face pressure if the government does not take cautionary measures from now to spend debt money in the nonproductive sector.
If the current tendency of national debt continues, the economy will witness weakening of external balance, deteriorating current account and balance of payment, fall in external financial flows including export revenue, remittance income, FDI, income on assets overseas, he said.
As a result, the situation may arise as debt default, fall in economic growth, high inflation, foreign exchange reserve depletion, exchange rate depreciation, loss of economic competitiveness and lowering of credit rating, Debapriya observed.
Replying to a query he said, if the GDP ratio of Bangladesh is not matching with other indicators of economy and different economic indicators are interrelated, while one of it is rising, the changes also affect others indicators.
He urged the government to continue the quarterly budget review and debt situation review so that parliamentary standing committee members can discuss the matter for national interest.
Also read: Bangladesh’s foreign debt far below risk limit: Economic review tells PM
Bebapriya also urged the government entities to be more friendly and transparent in releasing economic data and easy access to it for the researchers.
Bangladesh’s total public debt (as % of GDP), 34.7 percent, was among the lowest in South Asia in FY20, with Sri Lanka (112.2%) and Bhutan (120.7%), being the highest, source: IMF.
The total outstanding debt amount in FY21 in Bangladesh was $131.14 billion, it increased by $16.45 billion on average for the past 3 years, which was about 2.5 percent of GDP.
In FY21 only, total public debt increased more than $18.64 billion (additional 2.2 percent of GDP) of which more than 54 percent was domestic debt.
The total debt as percentage of GDP decreased in Bangladesh between FY08 (38.8%) and FY17 (28.2%). It has since increased between FY18 (29.5%) and FY21 (36.9%). The linear decadal growth rates were 44.1% (FY02 to FY11) 66.6% (FY12 to FY21).
Per capita outstanding debt – $432 (FY21), the annual increase of outstanding debt (FY20 to FY21) – $9.62 billion and annual increase in DSL – (FY20 to FY21) – $ 0.7 billion.
Total outstanding external private debt amount in Bangladesh was $18.69 billion in FY21, the share of external private debt in total debt increased between FY03 (3.9%) and 2021 (14.5%)