Bangladesh ought to jumpstart policy reforms to overcome macroeconomic crisis, says a leading economist, as he finds "unprecedented and inconsistent" economic-crisis indicators here.
Presenting his views Sunday on the latest state of the country's economy, Dr Zahid Hussain especially focused on banking system's health and called for mergers of weak banks forthwith.
The former lead economist at the World Bank's Dhaka office made a mention of several initiatives taken by the central bank and deplored that the Bangladesh Bank took a long view of the problems in setting time to begin reform in March 2025.
"Our crisis at the present, and reforms should begin now," he said in his recommendation in a lecture delivered at a university on the bumpy rides of the economy.
He unequivocally says that if any banks are reluctant to merge with weaker banks, "the government should let them die naturally".
"Some of them are already in ICU-- the government just can unplug the tube," Dr Hussain adds in his view on the banking affairs.
While highlighting the severity of crises affecting Bangladesh, the economist cited impacts of the COVID-19 pandemic, the Ukraine-Russia war, the dollar crisis, and disruptions to the global commodity-supply chain.
Presenting a keynote paper at the United International University, he stressed the need for urgent reforms in Bangladesh's banking sector and increased foreign income including remittance to navigate the challenges.
Dr Hussain noted a puzzling shift in employment trends between 2016 and 2022, with an increase in the agricultural sector but a decline in the industrial sector.
He also noted the global economic crisis, attributing it to factors such as the dollar crisis, war, and sanctions affecting economies worldwide.
Despite global challenges, he emphasized that successful crisis management varied among countries, with Bangladesh facing intensified issues due to delayed decisions and policy complexities.
"We could have started reforms much earlier, instead we are setting date for reforms," he said in a dig at what he meant procrastination on policy front.
He underlined the urgency of addressing the appreciating dollar value, inflation, and declining foreign earnings, suggesting measures to restore confidence in the banking sector and boost foreign income.
Dr Hussain criticized Bangladesh Bank's direct government payments by printing money, which he says leads to money withdrawal from market and currency devaluation.
Drawing from his extensive World Bank experience, he expressed concern about "unprecedented and inconsistent" economic-crisis indicators in Bangladesh. He urged a market-driven approach to determine the dollar's value.
The ceremony, part of the 'Bangladesh Corpus: Public Lecture Series-2024' at UIU, was presided over by Mohammad Musa, Dean of the School of Business and Economics. The event concluded with thanks from Prof Faizul Kabir Khan and was attended by department heads, teachers, and students.
bdsmile@gmail.com