The latest hike in gas and power tariff has again put to question the role of different regulatory bodies that are supposed to ensure transparency and accountability in the areas under their respective jurisdiction and protect the interests of the people best, whenever and wherever necessary.
Most energy experts and others, if not in the case of gas, have found the decision of the Bangladesh Energy Regulatory Commission (BERC) to hike the power tariff illogical and unjustified.
They have alleged that the energy regulator instead of exercising its wisdom and prudence has given in to executive pressure while deciding on the proposal to hike power and gas tariff.
However, it is not the sole instance where a regulatory body has faltered in taking right decision. Other so-called regulators are also found shying away from taking appropriate decisions on a number of occasions for explained and unexplained reasons.
In fact there are two types of regulators in Bangladesh. The first type includes the entities that carry out some regulatory functions are purely government entities and controlled by their respective ministries.
And the regulators belonging to the second category are legally empowered to exercise some amount of independence in their operations and decision-making.
A number of commissions, including the Bangladesh Securities and Exchange Commission (BSEC) and the BERC, constituted under separate laws are such regulatory bodies.
The Bangladesh Bank (BB) being the central bank acts as both banking sector and money market regulator. In accordance with the law it has full independence in regulating the operations of all private banks, both foreign and domestic. It enjoys immense controlling power over the private sector banks. It can direct changes in the boards of directors of these banks, if needed.
But the same is not true in the case of public sector banks. The Ministry of Finance exercises its full control over the affairs of these banks. The central bank enjoys the power to take disciplinary actions against the top officials of the state-owned banks but not against any members of the board of directors of those.
It has been observed time and again that the government is unwilling to give up its control over the public sector banks despite the fact this attitude has been responsible for many unpleasant developments in the banking sector.
A number of unscrupulous people could manage their entry into the boards or secured top management positions of the public sector banks and played key role in siphoning off billions of takas through fraudulent means. The government had to face lots of criticism for overlooking the management problems in public sector banks. But it is yet to take proper corrective measures.
The BSEC, the capital market regulator, is yet another case of regulatory malfunctioning. Its failures have caused enormous loss to the economy and untold sufferings, financial or otherwise, to millions of investors twice since 1996. The stock market which could be a very effective alternative source of capital mobilisation for companies has been struggling to make a comeback. Had the regulator been assertive and efficient, manipulations on such a massive scale would not have taken place.
Unfortunately, not a single regulatory body, be it fully government-controlled or partially independent, until now has been able to perform in line with the objectives behind its creation.
The malfunctioning on the part of the regulatory bodies has something to do with the overall quality of governance in this country. If any government worth its name wants to govern the country efficiently, it would, of necessity, strengthen all the national institutions and regulatory bodies -- not by just words but by deeds.
Competent and efficient people would have to be put at the helm of these institutions and bodies so that they can bring about necessary reforms and changes there to suit to the needs of what is called good governance. However, the key to ensuring a high level performance on the part of these organisations is their operational independence.
One might find the above-mentioned expectations something utopian that would never be materialised in this country. True. The track record of the successive governments is enough to make the people extremely pessimistic about their future. But what alternative do we have other than hoping for something good?
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