Economics
Are local brand products disappearing?
During the 70s, 80s, 90s, and the first decade of the 21st century, several popular products dominated the Bangladeshi market. These products not only met local demand but were also exported abroad. Over time, many of these products have become rare in the market. However, a bit of nostalgia can bring these items vividly to mind. Advertisements for these products on black-and-white televisions, and later on color televisions in the 90s, were a source of joy for the general public.
Will high inflation come under control anytime soon?
The current national budget has given special importance to controlling high inflation. Despite efforts over the past one and a half years, inflation remains unmanageable. The budget has set a target to bring down the inflation rate to 6.5% within the current fiscal year. However, most economists in the country believe this target is unattainable given the current state of the economy. They predict that even if inflation does not rise further, it is unlikely to fall below 9% anytime soon. Finance Minister Abul Hassan Mahmud Ali mentioned in a post-budget press conference that inflation would decrease within the next six months, but did not specify how this target would be achieved. A new monetary policy for the first six months of the current fiscal year is expected to be announced soon, and it is certain that controlling high inflation will be a priority. However, it is unlikely that inflation can be brought to a tolerable level through monetary policy alone.
Money laundering threatens to render development meaningless
Former State Minister for Planning, eminent economist Dr. Shamsul Alam expressed his concern over money laundering while delivering a keynote speech at a seminar organized by the Bangladesh Agricultural Economists Association on June 20. The seminar's theme was "Bangladesh's Economy in the Global Context: Growth, Inflation, Food, and Nutrition." Dr. Shamsul Alam stated that each year, 7 to 8 billion US dollars are being laundered from Bangladesh. He identified money laundering as a significant reason behind the ongoing foreign currency reserve crisis in the country. The former State Minister also mentioned that money laundering is creating complex problems for the country's economy.
How did they accumulate so much money from national leadership positions?
Prime Minister Sheikh Hasina, at a recent press conference in Ganobhaban regarding her recent visit to India, hinted at certain wrongdoers, saying, "They have accumulated so much money, but couldn't stay in the country; What's the use of such profits?" The question is, how did they amass so much money? Did government intelligence agencies, ministries, or officials turn a blind eye when they bought acres of land from powerful positions, purchased flats worth millions in prime city areas, built resorts in various parts of the country, created vast estates in their own or their in-laws' names, or deposited hundreds of crores of taka in banks under the names of their spouses and children?
Monetary policy should focus on enhancing tax collection
The first six-month monetary policy for the upcoming financial year (2024-2025) is scheduled to be announced in the first fortnight of July. Bangladesh Bank has nearly completed the preliminary work for formulating this policy. However, there is still uncertainty regarding the specific characteristics of the proposed monetary policy.
No restriction on journalists entering Bangladesh Bank
The journalists boycotted the post-budget press conference chaired by the finance minister due to the ban on their entry to Bangladesh Bank. Traditionally, this annual event includes the governor's significant role in addressing questions on various economic issues such as inflation, government loans, liquidity crisis, defaulted loans, money laundering, and reserves. However, this year, journalists protested by refusing to attend the conference if the governor spoke, leading to his exclusion from the Q&A session. Consequently, questions that would typically be addressed by the governor were instead answered by Finance Minister, Prime Minister's Finance Advisor Moshiur Rahman, State Minister for Finance Wasika Ayesha Khan, and Finance Secretary Md. Khairuzzaman Majumdar.
Deep concern surrounds foreign investment climate
The Foreign Investors Chamber of Commerce and Industries (FICCI), an organisation of foreign investors operating in Bangladesh, expressed concern about the future of foreign investment in the country during a post-budget press conference. They emphasised that investment, whether local or foreign, is a long-term activity, and thus, policy consistency is crucial to attract and retain investment. Frequent policy changes can spook both local and foreign investors. In particular, foreign investors seek policy continuity for the safety of their capital, as withdrawing investment from a country or region is not a simple process.
Opportunity to convert black money into white money, for whose benefit?
Finance Minister Abul Hasan Mahmud Ali has presented a budget proposal for the upcoming fiscal year (2024-2025) with a total size of 7 lakh 97 thousand crore taka. Of this, revenue is 5 lakh 41 thousand crore taka, and the expenditure is 2 lakh 56 thousand crore taka. This means there will be a deficit of 2 lakh 56 thousand crore taka in the budget. To cover the budget deficit, loans totaling 2 lakh 51 thousand 6oo crore Taka will be obtained from various domestic and foreign sources. Of this, 90 thousand 700 crore Taka will come from foreign loans. Additionally, it is expected that 4 thousand 400 crore Taka will be received as grants to help cover the budget deficit. Due to the failure to collect the desired level of revenue from domestic sources, Bangladesh is increasingly becoming dependent on foreign loans. Currently, Bangladesh's tax-to-GDP ratio is 7.6%, which is the lowest among South Asian countries.
Austerity Budget 2024-25
With a commitment to building a happy, prosperous, advanced, and Smart Bangladesh, Finance Minister Abul Hasan Mahmood Ali has presented the new budget for the fiscal year 2024-25 in the parliament. This is his first budget, the 25th budget of the Awami League government, and the 54th budget of Bangladesh. It is also the 21st budget under Prime Minister Sheikh Hasina. The size of the budget has increased rapidly during this government's tenure. In the fiscal year 2009-10, the total budget was BDT 1,10,523 crore. After 15 years, in the fiscal year 2024-25, it has increased by 621.12% to BDT 7,97,000 crore. The proposed new budget is 4.62% higher than the original budget of the current fiscal year and 11.56% higher than the revised budget. The size of this budget is 14.20% of GDP. The original budget size for the current fiscal year was BDT 7,61,785 crore, which was 15.21% of GDP. The size of the first budget after independence was BDT 786 crore. The proposed new budget is 1,014 times higher than that budget.
Budget 2024-25 to increase the tyranny of Black Money Holders
The national budget is not merely an annual account of income and expenditure but, in the current context, it serves as a tool to earn the trust and confidence of the people. The government's vision and goals are not confined within the boundaries of budgetary directives alone. Instead, it reflects the initiatives or measures the government is taking or will take to achieve or address issues related to the country's tendencies, resource acquisition, or problem-solving in various aspects. It provides direction on how the government intends to fulfill or will fulfill the expectations of the citizens.
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