Measures underway to stop money laundering, says finance adviser

Finance Adviser Dr. Salehuddin Ahmed has said that the interim government is taking measures to prevent future governments from laundering money abroad.
"We are creating a legacy of reforms to guide the next governments. They will be unable to exploit these systems," he said at a seminar on 'Actionable Financial and Economic Policies for an Inclusive, Equitable, and Prosperous Bangladesh' arranged by BRAC University in the city on Saturday.
The finance adviser highlighted the severe damage inflicted on the country's economy, describing it as unparalleled globally.
He voiced grave concern over the present state of the country's institutions, as most of them have been badly damaged due to the absence of good governance, transparency, and accountability.
He was critical of the former governor of the Bangladesh Bank (BB), saying that the BB head stayed in office until 9:00 pm only to grant approvals.
"This is how the organisation operated. Now, Bangladesh Bank is clearing previous arrears without selling a single dollar from reserves. During the tenure of the previous governor, $12 billion was sold from a $42 billion reserve."
Dr. Ahmed, who earlier served as the BB governor until 2009, noted that the situation has deteriorated significantly since his tenure. "Back then, the non-performing loans stood at approximately Tk 180 billion ($1.8 billion). Today, they have ballooned to Tk 2.5 trillion ($25 billion). Everyone knows why and for whom this default crisis has worsened," he stated.
Lambasting the country's development approach, Dr. Ahmed said, "Our strategy has been flawed, emphasising the growth without assessing the underlying weaknesses. Policymakers showcased growth, reserves, exports, and low inflation, but failed to examine whether these were sustainable or inclusive. It was their responsibility to ensure broad distribution of these benefits, but financial transparency was glaringly absent instead. Still, I will say there is no reason for fear."
To address inflationary pressures, he highlighted inefficiencies in the supply chain. "From Bogura to Karwan Bazar, traders have to pay in 17 different points. Intermediaries are necessary at times, but some individuals extort money by doing nothing except standing on the roadsides. This inflates commodity prices."
Dr. Ahmed noted that some order is returning to the banking sector, revenue management, and the stock market, but challenges still remain.
"People are protesting in the streets over falling share prices, demanding the chairman's resignation, and even blaming me," he said.
Despite hurdles, Dr. Ahmed acknowledged progress towards achieving middle-income status, but attributed it to the resilience of ordinary people rather than any previous governments.
"Farmers and common people deserve credit for their courage. Farmers feed 170 million people today, compared to 7.5 million in 1971. In our industries, it is their labour that sustains growth. Similarly, expatriate Bangladeshis are the true drivers of net foreign exchange earnings," he said.
Speaking on the occasion, distinguished fellow of the Centre for Policy Dialogue Debapriya Bhattacharya also expressed concerns over Bangladesh's development narrative, citing issues of politicised data and economic imbalances.
"GDP growth has not translated into increased private-sector investment. While there has been a rise in GDP, the tax-GDP ratio has stagnated at 8-9 per cent for years. Where has the money gone?" he asked.
Calling for urgent economic stability, he urged the interim government to focus on controlling the prices of essential goods and stabilising the exchange rate.
"Without strengthening state institutions, superficial reforms will not suffice," he said.
He alleged that the previous regime has destroyed all the institutions. "The central bank which was supposed to oversee the banking sector actually helped the looters to loot the banks."
The previous government had depicted a growth narrative where all the misinformation and disinformation were used, said the economist.
He further alleged that the previous government intentionally picked two sectors -- financial and energy -- to plunder the state.
"The financial and energy sectors, two pillars of the economy, were severely compromised by oligarchic influences. These two sectors were eaten up," he said.
CEO and Managing Director of BRAC Bank Selim RF Hossain said a few conglomerates looted the country's banks with the help of the central bank. He stressed the need for a very robust regulatory framework.
Commissioner of the Bangladesh Securities and Exchange Commission Farzana Lalarukh said that the government has been working to implement reforms in the capital market.
"The first step in this regard is to restore the confidence of the investors. We're trying to do that", she added.
She said the BSEC will implement reforms to ensure accountability and transparency through a digital platform.
Professor Syed Ferhat Anwar chaired the event while acting Dean of BRAC Business School Professor Mujibul Haque moderated it.
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