Balanced cabinet, well-placed to tackle mounting economic challenges: Masrur Reaz

It seems to me that the cabinet formed by the new prime minister, Tarique Rahman, is overall a strong one.

This is because, in forming the cabinet, various perspectives have been taken into account, and a balanced combination of four key elements is visible: experience, political realities, the energy of youth, and the global context.

First, experienced and successful former ministers have been appointed to lead key ministries, which should help ensure continuity in policymaking and implementation.

Second, long-serving public representatives with direct experience of the country's socio-economic realities have been given important responsibilities.

Third, there is a meaningful representation of youth leaders, which is likely to bring new dynamism and energy to the administration.

Fourth, individuals with experience in international relations, geopolitics, and global economic realities have been included, strengthening the government's capacity to formulate policies in a global context.

For these combined reasons, I believe this is a strong cabinet.

In terms of economic management, the Ministry of Finance has been given experienced leadership, which will be a major strength. Finance Minister Amir Khasru Mahmud Chowdhury has maintained continuous dialogue and engagement with the private sector; such leadership will help boost the confidence of businesses and investors.

Similarly, other ministries related to commerce and the economy have also appointed experienced individuals, such as Abdul Awal Mintoo and Iqbal Hasan Mahmud Tuku, whose practical knowledge should enrich the policymaking process.

As an economist, I believe the government currently faces several major economic challenges.

First, macroeconomic stabilisation must be further strengthened. Inflation needs to be gradually brought down to a tolerable level within the next one to one and a half years. Foreign exchange reserves should be raised to a level that can adequately support growth, and the exchange rate must remain stable even if imports increase.

Second, fiscal discipline must be restored. This will require improving the efficiency and transparency of public expenditure and public investment management, undertaking comprehensive tax reforms to increase revenue mobilisation, and enforcing strict discipline in debt management, particularly with regard to external debt.

Third, the banking and energy sectors are currently in a vulnerable position, and their weaknesses could affect the entire economy. In the banking sector, non-performing loans must be brought under control and, if necessary, weak banks should be restructured or consolidated through market-based solutions, alongside necessary legal reforms.

At the same time, governance and developmental reforms are also needed in the capital market and insurance sectors.

In the energy sector, ensuring long-term energy security is now essential. This will require increasing domestic gas exploration, expanding investment in renewable energy and attracting both foreign and private investment.

Finally, an integrated economic reform programme is urgently needed, with clearly defined targets and deliverables set for six months, one year, two years and three years. This programme should include public finance and tax reforms, improvements in the investment climate, trade policy reforms, supply chain and small business development, and reforms in land and infrastructure management.

Alongside these reforms, it is critically important to establish strong inter-ministerial coordination within the government and a joint public-private monitoring and coordination mechanism to ensure effective implementation.

Overall, the economic challenges ahead are complex and difficult. However, with strong political commitment, sound policy planning, and effective implementation, it is possible to address these challenges.