More borrowing from foreign sources sought

FE Report
Economists at a discussion Saturday said the government needs to enhance the fiscal expenditure to 26-28 per cent of the gross domestic product (GDP) from the existing 17-18 per cent to turn Bangladesh into an upper middle-income country by 2030.
They said the government should go for more borrowing from foreign sources, which is much cheaper than the domestic ones, to bankroll the deficit financing of the national budget.
Presided over by former Finance Minister M Syeduzzaman, economists from local and foreign countries took part at the discussion on the "Fiscal policy and capital markets" in a city hotel Saturday.
The newly-formed Bangladesh Economists Forum (BEF) organised its first two-day conference in Dhaka from June 21-22. Executive Director of the Policy Research Institute (PRI) Dr Ahsan H Mansur in his presentation said the government needs to raise the budget expenditure to 26-28 per cent of GDP to become an upper middle-income country.
"Although the 5.0 per cent budget deficit is offers very comfortable situation for an economy, the government needs to boost its expenditure even if it needs to cross the deficit standard limit. Foreign aid is still very cheap. The government should increase its borrowing from foreign sources," he said.
Dr Mansur said: "Bangladesh's 60 per cent people are still poor or close to the  poverty line. If the government does not enhance its budget expenditure for the social safety-net and services, there will be risk in eliminating the poverty in real sense which will affect the economic growth."
Executive Director of the Centre for Policy Dialogue (CPD) Professor Mustafizur Rahman said the government should takes care of the issue enhancing public investment to an expected level for becoming a middle-income country.
He, however, criticised the present tax structure and said the anomalies in the structure should be eliminated to encourage the new tax payers.
Prof Mustafiz said the government should take action against those people who are involved in banking and capital market scams rather than injecting more money from the public tax to those banks and markets for their recovery.
Former caretaker government adviser Dr Mirza Azizul Islam said 1996 and 2010 scams at the capital market should be taken care of and the culprits should be punished.
He suggested offloading of more shares, boosting of corporate accounts, coordination among the regulators, education to the investors, and demutualization and strengthening of the Securities and Exchange Commission (SEC) to establish a strong capital market for the economy.  Prof Mustafizur Rahman said if the government doesn't punish the market players of 1996 and 2010 capital market scams, there would be another such incident in our capital market in the near future.
M Syeduzzaman said the present capital market is not stable. "The government should restrict the exposure limit of the commercial banks, and more coordination of the Bangladesh Bank and the Securities and Exchange Commission."
Senior Research Fellow of the Bangladesh Institute of Development Studies (BIDS) Dr Nazneen Ahmed said a lot of people are still out of tax-net.
"The government should bring such people under the tax-net rather than imposing more tax on the current payers. The revenue then will be enhanced. This will facilitate the budget implementation," she said.