FOLLOWING the fall of the authoritarian Awami League regime in August, one challenge Bangladesh faces as it moves forward is the sheer size and untenable budget of the Bangladesh Civil Service. The budget for the financial year 2023–2024 reveals that 22 per cent of our national budget goes into public administration, which is a clear marker of the inefficiency, redundancy, and clientelist nature of our civil service. Meanwhile, only 5 per cent is allocated to health and only 5.5 per cent to defence. It is a sector that has grown to be an unsustainable part of the national economy, as well as being the highlight for political patronage that has long supported political parties.
Ìý
Unjustifiable allocation
BY THIS measure, Bangladesh’s budget allocation to public administration is one of the largest in the world. Pakistan, which faces arguably greater fiscal constraints than Bangladesh, allocates only 6.3 per cent of budgetary expenditure to civil administration. In Europe, one of the world’s most sophisticated and extensive administrative systems, less than 10 per cent of the budget goes to public administration. In Texas, 3.4 per cent of the state budget is spent on general government operations. Bangladesh’s allocation of funds to public administration is drastically disproportionate and urgently needs reform.
The Global Health Security index shows that Bangladesh has one of the least-performing health sectors in the region. In comparison, Bangladesh’s neighbours India, China, Bhutan, and Myanmar all score better in the index. Bangladesh requires funding for its healthcare, manufacturing industries, defence, and finance sectors. The government should be playing a critical role in developing these crucial sectors for the country’s economy.
Ìý
Problem of redundancy and political loyalty
THE civil service has become a bloated, inefficient, patronage-driven sector that rewards political loyalty rather than merit. The political appointments enforced by the ruling party have solidified this sector as one of the most effective and loyal clients of the government. The government has only further politicised this inefficient bureaucracy by expanding it.
Such a system not only squanders precious resources that could otherwise be devoted to health, education, or infrastructure; instead, it perpetuates inefficiency itself. Lacking accountability, the sector’s public funds are routinely wasted, and reforms that would increase effectiveness are resisted by the entrenched interests that benefit from the status quo. This overwhelming clientelist bureaucracy in public administration becomes a hindrance to the country’s development.
Ìý
Economic impact and missed opportunities
AN INEFFICIENT civil service absorbs of the national budget, which leaves less money for investments in growth-driving sectors such as technology, manufacturing, and renewable energy. By failing to modernise the economy and stagnating it with a vast, rent-seeking bureaucracy, Bangladesh continues to deprive its people of chances at a decent life. According to the different reports, tax laws in Bangladesh are written in English and are often complicated for tax payments by the citizens, or confusion around tax rebates should be addressed and modernised to increase the collection of income tax from eligible income earners in the country. For example, consider the recent debate on raising car taxes on people with more than one vehicle, which would only incentivise car owners to purchase fewer cars and eventually reduce the tax income from this source. In addition, there were talks of adding fees to government services, which could open doors to corruption; increasing source tax for land registration; and introducing travel tax, which would potentially adversely affect the travel industry. Without addressing the elephant in the room, which is reforming the direct tax laws and mechanisms, the previous government often thought of increasing the indirect tax and increasing VAT on specific goods and services. This shows that the previous government was struggling to increase tax revenue without trying to expand the tax base, and these piecemeal tax policy measures showcase the short-term thinking of the previous government, lacking the initiative to modernise the tax collection system and burdening only a small segment of the middle class to pay the taxes. While the country still struggles with tax evasion and corruption from larger business entities and influential people.
The money-whitening scheme is also a defeatist strategy that fails to combat the critical problems of financial crimes. These arbitrary adjustments do little to change the bigger structural problems with the Bangladesh fiscal policy, which is something that needs to be challenged and discussed. Bangladesh can start by modernising the tax administration, reducing bureaucratic inefficiencies, and later updating the tax laws to make it easier for tax collection.
Ìý
Urgent need for structural reforms
BANGLADESH needs to think differently about public administration. The new government has the unusual chance to put the badly needed reforms on the agenda that previous administrations avoided. The following steps should be taken forward:
— The civil service budget must be brought down to a global standard level; however, this cannot be done overnight; we need a roadmap to downsize the civil bureaucracy over the long term through the implementation of a new public management model of public offices. Savings from these cuts are to be diverted to infrastructure, healthcare, education, and innovation.
— Implement performance-based evaluations and accountability in the civil service to weed out inefficiency. Lean management and a meritocratic public administration will serve the nation better than the oversized, politicised structure that currently stands. Legally, the Bangladeshi civil servants are protected from scrutiny and are not held accountable for their lack of performance; this law will need to be repealed and replaced with a law that supports new public management and that goes in line with the student’s movement demanding a meritocratic society.
— The deeply entrenched clientelist system of appointments and promotions in the civil service based on political loyalty must be replaced by a system of merit. The recent and future quota systems should be reformed or abolished to prevent further politicisation. The public service must be depoliticised.Ìý
— Instead of relying heavily on indirect taxes, a more systematic and equitable tax system will raise more revenue for the government and have a more equalising effect on society. It can also consolidate tax revenue.
— The digital transformation of public services has the potential to decrease costs and deliver efficiencies. Investment in technology will modernise public administration and make it more responsive to citizen needs.Ìý
Bangladesh is at a tipping point. An unsustainable share of the budget is being spent on public administration. This symptom of deeper malaise reflects more than three decades of inefficient civil service that is politically driven rather than public-interest driven. The interim government should take advantage of this moment to finally make the reforms we so desperately need. Without addressing the underlying sources of inefficiency and clientelism in our public administration, Bangladesh cannot build a more prosperous and equitable society. The country cannot afford to continue on this path.
Ìý
Ahmed Ashfaque Shahbaz is a PhD candidate at the University of Exeter, United Kingdom.