The riddle of the missing figures

The country's leading economists have all along raised questions about the authenticity of Gross Domestic Product (GDP) figures provisionally announced by Bangladesh Bureau of Statistics (BBS), even claiming that growth rate figures have now assumed the shape of political numbers. Executive director of Centre for Policy Dialogue (CPD), a leading think-tank, had commented in the past, "A kind of infatuation appears to have grown among the country's policy-makers regarding growth. Growth data are therefore being used politically. Exaggerating growth cannot be beneficial; it does not help policy-making". Even a former secretary of the government's statistics division had claimed at a citizens' dialogue in 2019 that she had seen how development-related statistics were polished or doctored during her tenure. The problem becomes even more acute when an authoritarian regime tries to paint a rosy picture of the economy in an attempt to hide its democratic deficits cum deviations as well as political cum financial repression.

A recent example in this area has been the fog surrounding the export statistics of the country, which does not seem to disappear with the passage of time. The Export Promotion Bureau (EPB) had claimed at the end of fiscal year 2022-23 (FY23) that commodity exports had risen by 6.67 per cent during the outgoing year, but the information provided by the National Board of Revenue (NBR) showed that the exports actually declined by 5 per cent. And the Bangladesh Bank (BB) informed last week that the actual export earnings received by Bangladeshis banks was about US$ 12 billion less than the figures provided by the EPB.

An autonomous entity under the Ministry of Commerce, the EPB regularly publishes preliminary statistics on commodity exports from the country. However, it initially collects these figures from the NBR. And it is the Bangladesh Bank that formally provides official statistics on the country's export earnings. According to the EPB, the exports from Bangladesh during FY22 was US$ 52.08 billion, which rose to US$ 55.55 billion in FT23. Based on those figures, the exports during the outgoing fiscal year increased by US$ 3.47 billion.

However, the EPB figures have been contradicted by the NBR. The board counts export figures in Taka denomination based on taxes and duties imposed. For example, it claimed that commodities worth Taka 4,240 billion were exported during FY22. As average exchange rate of US dollar during the year was Taka 86.30, the export figure in US dollars during that fiscal year was US$ 49.13 billion. By applying the same formula, export receipts during FY23 were Taka 4633.70 billion. As the average exchange rate of US dollar was Taka 99.445 during that year, the export receipts stood at US$ 46.59 billion in FY23. This implies, export receipts have declined by US$ 2.54 billion, or about 5 per cent if NBR estimates are to be trusted.

Not only in terms of US dollar, the volume of exports has also declined during the past two years. According to NBR, 60.018 million tons of commodities were exported during FY23 fiscal year. But exports during the previous fiscal year was 67.079 million tons. Based on that, the export volume went down by about 750 thousand tons or 11 per cent in the outgoing year.

On the other hand, BB said that export receipts deposited in banks during the FY23 was US$ 43.57 billion, and the receipts during the previous fiscal year (FY22) was $ 43.60 billion. It implies that the export receipts actually declined by US$ 30 million.

When the export figures presented by the EPB, NBR and BB are analysed over the years, it is seen that lesser export earnings are received in the country when the export volume falls. If the FY23 figures of EPB are taken into account, then it is found that an amount totalling US$ 11.98 billion did not land as export earnings in the country during the fiscal year. Similarly, US$ 5.53 billion worth of export earnings did not reach the country during FY22.

According to insiders, the differences between the estimates presented by BB, NBR, and EPB can never be bridged. This is because, EPB accepts 'freight on board' (FoB) statistics as export figures. On the other hand, BB arrives at those figures when export earnings reach Bangladeshi banks. However, some of the shipped commodities are often returned, which are not deducted by the NBR authorities from the export figures. Besides, there may also be other reasons for receipt of lesser export earnings, including money laundering. As the exchange rate of US dollar is showing a rising trend in Bangladesh, some exporters may also feel that it would be wise to delay the remitting of export earnings to the country, as a better rate may be obtained later on.

About 84.50 per cent of Bangladesh's export earnings come from the readymade garments (RMG) sector. Many RMG entrepreneurs have been expressing doubts about the EPB figures for quite some time. Their logic is, inflation had increased in the US as well as in the European Union (EU) following the start of Russia-Ukraine war. As a result, the buyers have reduced the import of those commodities that are not essential. The country's RMG exports went down as a consequence. Besides, industrial production has been hampered in the country due to power and gas crises.

Some of the trade and industry insiders also opine that the government has a tendency to show export figures in excess of actual earnings to gain political mileage, and the government leaders cite EPB figures whenever they get an opportunity to boast about fictitious growth in exports. But this tendency harms both the exporters and the economy through generation of wrong or misleading information. Therefore, steps should be taken for swift redressal of these anomalous figures. Economists and private sector people outside the government should also get involved in this exercise, as it taints the country's credibility cum image in the outside world.

The anomalies with regard to data, statistics and information observed in Bangladesh are rarely seen elsewhere in South Asia, including our neighbour India, Sri Lanka, and Pakistan. Their statistics are much clean and more transparent. Some problems undoubtedly exist in Bangladesh, as there are significant differences between the export figures of EPB, NBR, and BB. If these figures are published in a coordinated fashion by the relevant agencies, then the problems could be identified and overcome.

It is recognised all over the world that statistical discrepancies or anomalies create problems for policy making and governance. It is unfortunate that Bangladesh has not yet been able to develop a credible statistical system even after 52 years of existence. This lack of credibility in statistical methods and figures needs to be addressed with utmost seriousness. There should be a transparent dialogue on the subject by involving all stakeholders, in addition to streamlining the statistical system. Otherwise, the real picture of the country's socio-economic status can never be gauged properly, which in turn can act as a hindrance to undertaking socio-economic analysis, adopting appropriate policies and programs, and conducting governance in a realistic and fact-based manner. The government should wake up to solve this longstanding issue and make the balance of payment figures more transparent and accurate for both domestic and external audiences.

Dr Helal Uddin Ahmed is a retired Additional Secretary and former Editor of Bangladesh Quarterly. [email protected]