Challenges beyond the interim period

The statement by Finance Adviser Dr Salehuddin Ahmed that the interim government is leaving the country's economy in a stable position does not entirely sound like rhetoric, especially when viewed against the backdrop of the looming collapse from which the economy has managed to recover over the past one and a half years. Speaking to reporters after a Government Purchase Committee meeting, he observed that the economy is no longer in a fragile condition as it once was, and that a degree of stability has been restored to its foundations, allowing future governments to move forward with greater confidence. Responding to concerns about record levels of public borrowing, the finance adviser noted that although borrowing increased, a substantial portion of external debt had also been repaid. He pointed out that the government deliberately refrained from taking large foreign loans for mega projects, a policy choice that helped prevent public debt pressure from worsening further. In a time of heightened uncertainty, such restraint arguably reflects a measure of prudence.
There is little doubt that the interim government assumed office amid an exceptionally chaotic situation. The economy was burdened by disorder in the banking sector, dwindling foreign exchange reserves, export slump and a decline in overseas workers' remittances. Steering the country clear through this difficult phase with a sense of resolve and removing the fear of an imminent economic calamity is no small achievement. Efforts to protect the banking sector from further deterioration and to rebuild foreign exchange reserves-even after repaying US$6.0 billion in external debt-are indeed heartening developments. Yet, these gains alone may not be sufficient to justify the claim that the economy has reached a satisfactory and stable footing. Dr Salehuddin himself acknowledged that employment generation remains one of the most pressing challenges. Job creation, he admitted, requires sustained support for small and medium enterprises, support that could not be adequately extended due to limited fiscal space. At another event the following day, while expressing optimism about ongoing reforms, he cautioned that significant challenges still lie ahead. The greater task, he stressed, is to carry forward reforms carefully and methodically-an endeavour that demands time, cooperation and procedural discipline, all of which are often difficult to sustain within Bangladesh's complex administrative framework.
Among the challenges ahead, the banking sector obviously stands out as a persistent source of concern. The burden of non-performing loans continues to threaten the health of the financial system. Addressing this will require transparent loan facilitation, streamlined disbursement mechanisms, and firm accountability-tasks that will test the resolve of future policymakers. Beyond banking, other critical areas demand attention, including containing inflationary pressures, improving productivity, diversifying exports and enhancing the competitiveness of Bangladeshi products in global markets.
With the general elections approaching, the challenges facing the next government are undeniably multifaceted. Any lapse in vigilance or flaw in planning could exact a cost the country can ill afford. The interim government may have steadied the ship, but navigating the waters ahead will require careful judgment, sustained reforms and a clear commitment to long-term economic resilience.