Economists, policymakers and business leaders deplored inefficient economic management and urged the interim government to give a cohesive roadmap to stabilize the economy, instead of pursuing policy improvisations.
In their deliberations on the economic white paper and the followup from government side, at a cutting-edge policy-review meet Saturday, they called by one voice for remedying yawing economic inequality, slowing growth and rising cost of doing business.
A note of anxiety and wonder over the recent indirect-tax hike that affects all across the board reverberated through the meeting venue.
They voiced concerns regarding the interim government's fiscal and economic policies, including economic mismanagement and systemic inefficiencies, and the stressed the need for a comprehensive reform strategy.
The distinguished speakers urged the government to address the deteriorating confidence of investors and consumers immediately.
They criticized the sudden imposition of increased VAT-SD, instead of raising direct tax, on IMF prescription.
The observations came at a symposium titled 'White Paper and Thereafter: Economic Management, Reforms, and National Budget' at the Bangabandhu International Conference Centre (BICC) in Dhaka
Delivering introductory remarks, economist Dr Debapriya Bhattacharya, the chief of this government-formed white-paper panel, strongly criticised the interim government for raising the value-added tax (VAT) recklessly.
"We are surprised to see how inconsiderately the value-added tax was increased," he told the audience.
Bhattacharya deplored the interim government's failure to present a clear economic manifesto to address the ongoing crisis.
He emphasized that the absence of a cohesive policy framework complicates efforts to assess the current situation.
Dr Debapriya underscored the lack of a comprehensive strategy for establishing a balanced and inclusive economic system, despite acknowledging some isolated measures taken by the post-uprising administration.
"We need a clear roadmap from the government on tackling issues like LDC graduation and providing mid-term support for vulnerable groups."
The chief author of the white paper on the economic situation left behind by the deposed regime
warned of a deteriorating energy situation and highlighted the opaque structure of government spending, particularly regarding subsidies and revenue expenditures.
He questioned the clarity of allocations for education and healthcare and who stands to benefit from such spending.
Commenting on the Aman paddy-procurement drive, he observed that it had achieved little success. Corruption persists, and farmers continue to be deprived of fair prices.
"Maintaining adequate food reserves in government warehouses is essential for inflation control, but reserves remain stagnant," he added.
Regarding the white paper's purpose, Dr Debapriya acknowledged uncertainty about its post-publication impact.
He stressed the importance of incorporating the white paper's recommendations into policymaking, with a focus on medium-term plans and the next budget.
Dr Debapriya also criticized a lack of effective-monitoring mechanisms for managing government expenditures, noting that while steps have been taken in the banking and energy sectors, these initiatives are uncoordinated and ad hoc.
"No new development vision has been articulated," he remarked, adding that the interim government lacks a clear agendum for achieving the Sustainable Development Goals (SDGs), LDC graduation, or reducing inequality.
He also expressed concern over the absence of policies to address project cuts.
He called for extensive discussions on the upcoming budget, pointing to critical issues such as slowing growth, limited private- sector investment, and employment challenges.
"Growth is slowing, private -sector investment is lacking, and employment remains a pressing concern," he notes.
He further criticized the interim government for operating under the budget of the previous Awami League government without presenting a revised version.
Dr Debapriya also highlighted lack of transparency in development projects, stating that without a publicly available policy for evaluating these projects, it is difficult to gauge their feasibility and impact.
Speaking as chief guest, Commerce Adviser of the interim government Sheikh Bashir Uddin defended the interim government's recent decision to raise value-added tax (VAT), asserting that indirect taxes play a crucial role in managing an unregulated economy like Bangladesh's.
"While direct taxes are more suitable for developed economies, indirect taxes are essential for maintaining balance in an unregulated market," he told the meet.
Referring to the July-August uprising last year, Sheikh Bashir highlighted that it stemmed from growing inequality under the previous regime.
He emphasized the need for prudent policies to eliminate such inequality and discrimination.
"Those who sacrificed their lives during the uprising made the ultimate commitment. It is now our responsibility, as representatives of the current government, to create moral benchmarks for our successors to follow," he said.
Sheikh Bashir also stressed the need for the government to clearly outline its priorities, policies, and resources.
He revealed that the digitization of family cards under the Trading Corporation of Bangladesh (TCB) uncovered 3.7 million fraudulent cardholders.
Highlighting the importance of reforming the TCB's financial structure, he notes that the agency spends approximately Tk 120 billion annually to procure essential goods for low-income households at subsidized prices.
He further criticized the banking sector for its record profits in December, calling the trend "immoral" and contradictory to claims of stagnant growth and a lack of business confidence.
"We must carry out necessary reform agenda, and a massive reconciliation of data is critical to these efforts," he added.
Investor and consumer confidence is at an unprecedented low, a situation unseen in recent years, according to Syed Nasim Manzur, managing director of Apex Footwear and one of the country's prominent business leaders.
Speaking during the inaugural session of the symposium, he described the current challenges as the most severe he has faced in his 34-year career in business.
"I have never encountered such a lack of confidence and support. This year has been the most difficult I have ever experienced," he stated.
Nasim Manzur expressed concern over the deteriorating business environment, noting that discussions on improving the ease of doing business have yielded little. Instead, conditions have worsened.
"The cost of doing business has surged -- VAT has increased, and there's now talk of raising fuel prices. At the same time, worker wages have gone up, but productivity has not kept pace," he explains.
He also highlighted the difficulties industries face in securing skilled workers. "Many of those entering the job market lack the required skills."
Criticizing the current tax system, Nasim remarked, "Taxes are increasing every year, and businesses are weighed down by high taxes on investments."
Calling for urgent action from the interim government, he urged, "Reduce tax rates and ensure the right people are appointed to the right positions. Stop overburdening those who are already paying taxes. And please, do not raise energy prices -- we cannot bear it at this time. Simplify the challenges we face."
BIDA Executive Chairman Chowdhury Ashik Mahmud Bin Harun emphasized the value of time in economic progress, which he said had been neglected during the previous regime's 15-year rule.
Unlike the past, he said, the interim government is focusing on developing five well-equipped special economic zones instead of attempting to build 100.
He stated that efforts are underway to ensure adequate gas, electricity, water, roads, and other infrastructure to attract investors.
"We're working to streamline services under a unified platform. Time is of the essence, and we need a stable, competent, and honest government. Push us so we can deliver meaningful outcomes," he urged.
Prominent economist Dr Zahid Hussain said that the country's progress would depend on policies, political stability, and natural circumstances.
Meanwhile, FICCI President Zaved Akhtar called for expanding the tax net through consolidated efforts to mobilize internal resources, instead of hiking taxes.
Eminent economist Dr Masrur Reaz underscored the need for setting clear priorities while formulating the next budget. He also recommended strengthening market-monitoring systems, intelligence, and tools to ease the burden of high commodity prices on the public.
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