Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue and convener of the Citizen鈥檚 Platform for SDGs, Bangladesh, observed that interim government has introduced greater transparency in the current economic situation, offering a lesson for upcoming governments.
鈥楾he first challenge of the government has been met by providing an evidence-based transparency to the current economic situation and the evolving challenges the economy is facing. So, this is a fundamental contribution,鈥� he said.
The prominent economist, also chief of the White Paper Drafting Committee, said this during an interview with BSS at the CPD Centre in the city.
Debapriya said it was now 鈥榗ommon knowledge鈥�, following the publication of the White Paper, that the current government inherited an economy which was afflicted by both structural challenges and policy related problems.
鈥楽o, understanding the benchmark situation had been one of the major challenges for this government, and I think that both the government and the society have now a clearer idea about the amount of plundering of public fund which took place in this country over the last one and a half decade,鈥� he added.
Giving credit to this interim government, he said, 鈥楬opefully this trend of transparency will go a long way in preventing incoming governments from mismanagement which was the practice earlier.
He added that the White Paper exposed how an unfolding triangulation of interest groups was responsible for the corruption.
鈥楾he groups included politicians, business people, and the bureaucrats. This led Bangladesh to become a crony capitalism at first and then evolve into a kleptocracy,鈥� he said.
鈥業ndeed, the type of corruption and of malfeasance of the earlier regime, as reported by the White Paper was picked by leading global media including 鈥淣ew York Times鈥� and 鈥淭he Economist鈥�,鈥� he added.
Highlighting the second challenge for the government, the economist stated that, having established the benchmark situation, the government has to embark on the stabilization and consolidation of the macroeconomic situation.
So, he said, it was all about stabilising the economy, generating private investment and employment.
This is about pre-empting further depletion of foreign exchange reserves of the country as well as withholding the depreciation of the national currency, the Taka, he added.
鈥楽o, we have seen that the forex reserves are holding on and the exchange rate has also been largely stabilised. Since the exchange rate management is now more market-based, there will be fluctuations, but no major shocks in the exchange rate are anticipated,鈥� he said.
However, the economist said, the other main component of macroeconomic management, namely controlling the price rise in the market, is yet to show results.
In the effort to mitigate the inflationary pressure, the supply-side responses in the face of monetary control are still very weak, he added.
He said the solution to many of the weaknesses in macroeconomic management lies in institutional and regulatory reforms.
鈥楾hese daunting reforms constitute the third most important challenge for the interim government. Indeed, the success of such reforms will pave the way for sustainable development of the country in the future,鈥� he added.