Structural flaws, governance issues hamper economic reforms: Debapriya

Despite early signs of economic stabilisation such as easing inflation and efforts to maintain a stable foreign exchange market Bangladesh’s broader reform agenda remains constrained by structural weaknesses and governance shortcomings, said Dr Debapriya Bhattacharya on Sunday.

Speaking at a policy dialogue titled “Bangladesh Economy 2025–26: Policy Reform and National Budget,” organised by the Citizen’s Platform for SDGs, Bangladesh, at Dhaka’s Lakeshore Hotel, Bhattacharya criticised the lack of substantive economic transformation.

“We are not seeing the kind of structural shift or reduction in anti-equity bias that would indicate meaningful progress in economic management,” said Bhattacharya, who is also a distinguished fellow at the Centre for Policy Dialogue (CPD).

He noted that economic reforms have received significantly less attention from the government compared to other areas. “Without economic stability, no other reform will be sustainable,” he added.

Bhattacharya identified three critical deficits shaping the upcoming FY26 national budget: a lack of cooperation and inclusivity, poor coordination, and limited transparency.

“There has been minimal public engagement in the budget process. Dialogue outside Dhaka has been virtually absent, and diverse voices within the capital have also been excluded,” he said.

On the separation of tax policy from tax administration, he supported the move in principle but criticised its execution.

“Splitting the tax system into two divisions was a correct step and aligns with recommendations from our white paper,” he said. “However, the implementation was flawed—done without proper consultation, reducing professional input, and increasing administrative control.”

Bhattacharya warned that the ongoing pen-down strike by National Board of Revenue (NBR) officials could further hamper revenue collection, compounding the challenges facing the country’s fiscal framework.