Originally posted in The Business Standard on 6 August 2024
Getting Bangladesh back on track: How to restore normalcy to the economy
While the country bled and burned over the past weeks, its economic challenges have been ramping for much longer — some structural problems stretching as far back as the first tenure of the recently ousted Awami League government. These challenges will have to be dealt with by the interim government set to take charge soon. TBS reached out to some experts and economists to analyse these challenges and the probable solutions the new government will have to consider in the coming months.
I would suggest that the interim government start off by preparing, very speedily and efficiently, a white paper on the state of the economy, so that we have a bit of transparency on the current state of affairs of the economy.
Firstly, the white paper could focus on problems such as the economic challenges that were triggered by the recent movement in the last month or two.
The second set of problems [they could focus on] include macroeconomic stability, the foreign exchange reserve, the power situation, the inflation rate, etc. that affected us in the recent past.
The third set of problems are the structural problems that we have carried forward in the last decade or so: the fault lines in the development approach we pursued, including revenue mobilisation, banking reforms, capital market reforms, how to improve private investment, etc. and also the backlog on the longstanding reform agendas.
So, I see three sets of problems. Immediately to bring back economic normalcy, we need to first ensure that exports, remittances, employment, wages, etc. are in line at the moment and stabilise the market to the extent possible for the commodities, which are very much necessary for the lower-middle class or middle class.
On the other hand, [we also need to address] the problems we saw in the recent past, partly because of the global situation, and partly because of our own mismanagement and then thirdly, [we need to address] the reform of the long outstanding issues.
So, the white paper will bring some transparency and help the interim government to prioritise its actions. If the document is prepared in a professional and participatory way through discussions with all the stakeholder groups, then the government may draw up an action plan, depending on the timeframe within which it will be in power. If it remains for three months, then it is one thing, if it remains for a longer period, it is another thing.
So, my advice is, prepare a white paper on the state of the economy so that all the confusion about the data and the information gap we have are cleared, and one can have an informed judgment regarding how to move forward.
– Dr Debapriya Bhattacharya, Distinguished Fellow, Centre for Policy Dialogue (CPD)