Middlemen swallow remittance, govt incentives

People are paying dearly as "big fish" and intermediaries gobble up a significant portion of government benefits, including incentives for expatriates' income and their remittance, too.
Such stark alert came from former Bangladesh Bank governor Mohammad Farasuddin at a function at Bangladesh Institute of Bank Management (BIBM) on Thursday night.
Speaking at third AKN Ahmed Memorial Lecture, Mr Farasuddin said the exploitative middlemen are giving small part of the incentives to those who remit expatriate incomes while smuggling the rest themselves.
"Due to this, the amount of expatriate income that was supposed to increase, did not increase," said the former governor while delivering his lecture on the topic organized by BIBM.
Mr Farasuddin said middlemen are the cause of pain in the country.
He also held them accountable for the futility of initiatives taken by the government for consumers to get the benefits.
"Sellers have benefited from the initiative taken by the government to reduce the duty on imported goods--users didn't get it."
From his experience gained for being close to the powers that be at the time, Mr Farasuddin reminded that in 1974, famine occurred also because of these middlemen.
"So the government needs to fight back middlemen with their weapons."
In this case, the former governor of the central bank said fiscal policy should be coordinated with other government policies.
He urged implementation of a unified exchange rate, emphasizing the need to prevent misallocation of remittance incentives.
Turning to the foreign-exchange crunch, Mr Farasuddin was critical of the central bank's current currency swap and called for transparency in managing the US dollar.
He recommends allowing hassle-free fund deposit for six months.
The triangular economic challenges of inflation, fluctuating currency- exchange rates, and bank-interest rates were highlighted, with Farasuddin emphasizing the impact on the impoverished if inflation surpasses 5-6 percent.
Regarding the liquidity crisis in the banking sector, the ex-governor suggests facilitating unrestricted money deposit. He has emphasized the importance of accurate economic data and criticized delayed currency devaluation.
During the event, current Bangladesh Bank Governor Abdur Rauf Talukder discussed measures taken to simplify dollar deposits, addressing concerns about multiple exchange rates.
Governor Talukder defended current policies, stating a unified exchange rate is in effect. He explained the central bank's currency-swap strategy and reassured stability on the forex market, attributing it to political stability post-election.
Talukder emphasized the joint implementation of monetary and financial policies, revealing a 15-percent reduction in the current budget due to decreased government spending.
He asserted that the forex market is stable and currency depreciation is avoided thanks to ongoing political stability and positive economic indicators after the national elections.
Eight Masters in Bank Management (MBM) students were awarded Tk 50,000 and an honorary crest as A. K. N. Ahmed Talent Award for good results on the occasion.
A good number of participants, including former Governors, Deputy Governors, and Executive Directors of Bangladesh Bank, Managing Directors of Banks, faculty members of BIBM, senior bank executives, academics and media representatives participated in the third A. K. N. Ahmed Memorial Lecture.
Late A.K. N. Ahmed was the second Governor of Bangladesh Bank. He served Bangladesh Bank as Governor from November 1 974 to July 1976.

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