Loan default becomes ‘business model’

Loan default has become a 'business model' in the country as borrowers who defaulted on loans believe that they can manage to escape the situation, eminent economist Prof Rehman Sobhan said on Monday.

The amount of defaulted loans keeps multiplying over the last four decades, he mentioned.

"…and now it (loan default) has got incorporated into a business model of the country, he said.

He added: "A section of people have started believing that they will get out of the situation if they became defaulted once, twice or trice. So, there is an issue of governance."

Mr Rahman, also chairman of the Centre for Policy Dialogue (CPD), observed that the laws are seen to be applied severely to the people who belong to opposition parties, but the situation is almost reverse to the people having strong political engagement.

"We must have a uniform rule of law which will be applicable to all under any circumstances," he said while moderating the closing plenary of the 2-day critical conversation by Bangladesh Institute of Development Studies (BIDS).

Highlighting the importance of structural change in the political parties, he said the political parties lack active representation from various segments of the society and this will help the parties know pains of different classes.

Executive chairman of Power and Participation Research Centre (PPRC) Dr Hossain Zillur Rahman said the country managed to reach the economic growth at this level mainly because of the contribution of the citizen's initiative.

Referring to the current state of the banking system, he said the authority should not put law violators in the driving seat at policy level.

Dr Imtiaz Ahmed of International Relations Department at Dhaka University said the positive outcomes in politics, economy and political economy will not come unless dreamers and people with democratic mindset come to the streets in large number.

Dr Anu Muhammad, economics professor at Jahangirnagar University, was critical of the government after terming Bangladesh as a surveillance state.

He said the government keeps talking about higher economic growth but it does not talk about the other side of the equation like how it costs socially and environmentally.

In the name of development, the government is destroying the ecology with paying no attention to the logical demand of the people.

Speaking as the chief guest, Dr Mashiur Rahman, economic affairs adviser to the Prime Minister, said the government is trying hard to take the scale of development to the level that the people are expecting.

He admitted that there are some weaknesses persisting in the system but the government is working on it to make the growth more equitable by lessening the level of inequality.

Barrister Sara Hossain and Professor Tasneem Siddiqui, among others, also spoke at the plenary session.

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