Originally posted in The Daily Star on 6 August 2024
High inflation, banking crisis are key hurdles for new govt: analysts
The interim government’s immediate duty will be to address inflation and repair weak financial institutions as it seeks to rebuild the economy, according to experts.
They added that weak governance in financial institutions and the central bank’s lack of autonomy have been seriously affecting the economy.
“The interim government’s immediate task should be addressing inflation. The economy has been suffering from high inflationary pressure for years,” said Fahmida Khatun, executive director at the Centre for Policy Dialogue.
Annual inflation rose to 9.73 percent in 2023-24, the highest since 2011-12, when it was 10.62 percent, according to the Bangladesh Bureau of Statistics.
She also said financial institutions had weakened immensely due to corruption and a lack of good governance.
The CPD executive director said the nation has witnessed a change and the need now is to rebuild the economy.
According to her, overcoming the destruction of public and private property is not the major challenge. Rather, repairing the country’s image is the major challenge.
Sumon Chowdhury, secretary general of the Bangladesh Steel Manufacturing Association (BSMA), said the interim government needs time to ensure discipline in business.
Although it is unclear what steps the interim government will take, any decision should be made after consulting with all stakeholders, he added.
Chowdhury said businessmen faced huge financial and non-financial losses during the movement, adding that they had already been suffering for a long time due to a gas crisis.
In such circumstances, the interim government should provide incentives or other benefits, he said.
He also condemned attacks by miscreants on businesses, which particularly targeted establishments owned by pro-Awami League (AL) businessmen.
“It is true that pro-AL businessmen got plenty of benefits. But practically all businessmen became pro-AL as the party has ruled the country for the past 15 years.”
Zaved Akthar, president of the Foreign Investors’ Chamber of Commerce and Industry (FICCI), refused to comment in advance.
But he said that the nation sustained a lot of damage, both literally and metaphorically.
“We have to rebuild our nation,” he said.
Syed Mahbubur Rahman, a former chairman of the Association of Bankers Bangladesh, said: “Whoever comes to power, we are looking for good governance in the banking sector.”
Rahman, also managing director of Mutual Trust Bank, told The Daily Star that companies and banks owned by people close to former Prime Minister Sheikh Hasina will have to tread carefully.
He also fears bad loans will rise further as companies owned by political leaders may face trouble.