The country lost $16 billion annually on an average between 2009 and 2023 because of the illicit fund flow amid systemic tax evasion, misuse of exemptions, and poorly managed public finances under the authoritarian Awami League regime ousted amid a mass uprising on August 5.聽聽聽聽聽
The illicit financial outflows are more than double the combined value of net foreign aid and Foreign Direct Invest, according to the White Paper on the State of Bangladesh Economy, submitted to chief adviser Muhammad Yunus on Sunday by a 12-member committee headed by economist Debapriya Bhattacharya.
The white paper, underscoring the significant fiscal opportunities lost to corruption, stated that halving tax exemptions could double education funding and triple health allocations.
Income tax exemptions were granted to selected large conglomerates,聽 including Summit Group for its Liquefied Natural Gas terminal and 15 power plants, S Alam Group for its coal-based power plants and BEXIMCO Group for its Sukuk Bond, according to the white paper.聽聽聽聽聽聽
The white paper also highlighted that $14鈥�24 billion was lost to political extortion, bribery, and inflated budgets with the annual development programme projects worth $60 billion in the past 15 years.
Chief adviser鈥檚 press secretary Shafiqul Alam in a briefing on the day said that the chief adviser was stunned by the plundering of public money during the AL regime.
Calling the white paper an autopsy of misappropriation of public funds by the authoritarian regime, he said that the interim government would start meetings with international agencies including the Federal Bureau of Investigation of the United States from December 10 to bring back the stolen assets.
On August 29, the white paper committee was appointed after the interim government assumed power on August 8, three days after deposed prime minister Shekh Hasina fled to India on August 5.
Exploring the overall economy left behind by the AL regime in 23 chapters, the 385-page white paper revealed that protracted periods of deceptive data, lax financial management, reckless macroeconomic management, public finance pilferage, and external sector imbalances had created deep wounds in the economy.
The deceptive economic outcome indicators, coupled with serious institutional flaws in sectors like banking, non-banking financial institutions, capital market and the energy sector are linked to the launch of overpriced mega projects and the huge outflow of illicit finance, said the white paper.
The white paper showed that the lack of democratic accountability from the fraudulent national elections of 2014, 2018 and 2024 shaped the authoritarian government that promoted collusion between the ruling politicians, a section of the bureaucrats and certain business elites for its sustainability.
It also said that the unholy alliance eroded institutional integrity of legislature, executive and the judiciary and paralyzed the non-state actors like media, civil society and private sectors, through intimidation, self-censorship and cooption leading to the rise of the oligarchs who ruled the political governance and economic management.
鈥楥onsequently, the government lost its policy sovereignty. These oligarchs influenced and manipulated key facets of the economy to serve their vested interests, concealed by an illusory development narrative sustained by inflated and misleading data,鈥� said the paper.
Identifying two dozen channels of corruption, the paper puts the banking sector on top of the most corruption-ravaged sector, followed by physical infrastructure and energy and power while information and communication technology was also identified as one of the most corruption-affected sectors by its operational and technological novelty.
The banking sector crises have deepened due to politically influenced lending practices overburdened with distressed assets of Tk 6.75 lakh crore as of June 2024, equivalent to the cost of constructing 14 Dhaka metro rail systems or 24 Padma Bridges, according to the paper.
鈥楾he S Alam Group alone took about Tk 2 lakh crore from the banks,鈥� said the white paper.聽
The paper also said that manipulated domestic production figures and understated demand for key commodities, such as rice, edible oil, and wheat, had destabilised markets while erratic and politically influenced procurement policies benefited powerful business groups and exacerbated consumer hardships due to almost double-digit inflation over the past two years.
The paper identified that聽 Tk 13.4 lakh crore had been funnelled through hundi transactions in the past decade by recruiting agencies for visa purchases 鈥� an amount four times the cost of constructing Dhaka metro rail between Uttara and Motijheel.
The paper classified 73 per cent of social safety net beneficiaries as non-poor until 2022.
Receiving the white paper, the chief adviser thanked the committee for doing a landmark, saying it should be published once it is finalised and be taught in textbooks in national college and university curriculum according to the press wing of the chief adviser.
Committee member Mustafizur Rahman said that they examined seven large projects costing over Tk 10,000 crore each and found that the initial estimate of Tk 1,14,000 crore was revised to Tk 1,95,000 crore, recording聽 70 per cent increase by adding many components, showing an inflated land price, and manipulating the purchase.
This happened without analysing the cost benefit, he said, adding that total expenses on 29 large projects were $87 billion, or Tk 7,80,000 crore.
Committee member AK Enamul Haque said that in the past 15 years over Tk 7,00,000 crore was spent on the ADP, and 40 per cent of the money was plundered by bureaucrats.
M Tamim, another member of the committee, said that $30 billion was invested on power generation, and if the kickback was considered 10 per cent, the amount would be at least $3 billion.
