Economic reforms list long but some measures need to start now: Fahmida Khatun

Executive Director of the Centre for Policy Dialogue (CPD) Dr Fahmida Khatun said the list for the interim government for immediate and midterm measures is long but some of the measures have to start during its term.

She said the measures taken by the interim government should be carried out by the next government also when the new elected government comes.

“But the initiatives have to be taken now, and this is the time,” she said while speaking at a webinar, noting that the challenges for the interim government are humongous.

The economist said first of all, the interim government has to ensure political stability and also restore the law and order situation because these are preconditions for economic prosperity and economic growth.

She said the political turmoil which they have observed, during the student-led movement and also some of the actions by the previous government like Internet blackout, have an impact on the economy in the immediate term, and it will also have an impact in the medium term.

Dr Fahmida said these challenges are very difficult to deal with within a limited time. 

She said the economy observed a reasonable rate of growth but there was a lack of authenticity of data during the past regime and the numbers were inflated as those were far from reality.

“I have written earlier, that Bangladesh’s growth story lacks justice and humanity, and this, I described from the point of the distributional aspect of the growth and the qualitative part of the growth,” she said, adding that that is why the student movement for quota reform was the manifestation of bigger problems that policymakers had overlooked for decades.

In fact, Dr Fahmida said, the economy now requires reforms and there is a need for institutional reforms to bring discipline in the economic system.

She said the corruption model which has been created over the decades, has benefited certain groups which she has mentioned by depriving the larger sections of the people.

Dr Fahmida observed how the political turmoil in Bangladesh during the student-led mass uprising in July and August led to the collapse of the government on 5th August 2024.

“So with this change, the interim government has to work on almost every front to fulfil the ambition of the students and people of the country. This is extremely challenging as the system has almost collapsed during the last 15 years,” she said.

Dr Fahmida said the challenges on the economic front are formidable. Some of these challenges include high inflation, dwindling foreign exchange reserves, inefficiency and corruption in public project implementation, low tax GDP ratio, low private and foreign investment, a weak financial sector, high nonperforming loans in the banking sector, illicit financial outflow, unemployment, and also poverty and inequality.

Right to Freedom Board Member Jon Danilowicz moderated the webinar while Right to Freedom Executive Director Mushfiqul Fazal Ansarey gave a brief introduction of the panel of speakers and Ambassador (retd) William B Milam, Board President of the R2F offered opening remarks.

Director of the South Asia Institute at Wilson Center in Washington, D.C. Michael Kugelman and Secretary, Citizens for Good Governance Dr. Badiul Alam Mazumdar spoke at the webinar which aimed to foster conversations on critical aspects of Bangladesh’s new journey under the leadership of Nobel Laureate Professor Muhammad Yunus.