Next govt must tackle banking woes, inflation, weak revenue base in first year: RAPID
The organisation also stressed the need to raise domestic resource mobilisation, increase investment in health, education and social safety nets
Bangladesh's next government must act within its first year on 12 urgent socio-economic priorities, including fixing the banking system, controlling inflation and strengthening public finances, according to the research organisation Research and Policy Integration for Development (RAPID).
The priorities were outlined by RAPID chairman Dr Mohammad Abdur Razzaque while presenting the keynote paper at a seminar in Dhaka today (15 December).
The seminar, titled "Immediate Socio-Economic Priorities Facing the Next Government", was held at the CIRDAP auditorium and attended by economists, business leaders and journalists.
According to RAPID, the key areas requiring the next government's immediate attention include a decision on whether to seek an extension for Bangladesh's graduation from Least Developed Country (LDC) status, inflation control, repairing the banking system to avert a wider financial crisis, restoring confidence in private credit and investment, job creation and rebuilding external reserves.
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The organisation also stressed the need to raise domestic resource mobilisation, increase investment in health, education and social safety nets, address debt pressure and rising debt-servicing costs, ensure energy security, remove barriers to women's economic participation, improve the credibility of official data and strengthen state capacity to manage geopolitical risks.
Banking sector reform critical
The banking sector featured prominently in Abdur Razzaque's presentation, with RAPID warning that governance and accountability must be restored to prevent further deterioration.
The organisation said ensuring the independence of the central bank and avoiding political interference would be critical for the next government.
It also called for cleaning up banks' balance sheets through credible resolution and recapitalisation measures, including proper loss recognition, time-bound recovery plans and conditional public support backed by stronger enforcement and recovery mechanisms.
Razzaque said political considerations in the past had worsened the non-performing loan problem.
"In the past, non-performing loans were treated politically for political gain," he said. "The central bank must be made fully independent, away from political considerations. Otherwise, a major crisis awaits in the future."
Low tax-to-GDP ratio raises concern
RAPID also highlighted the need to increase domestic revenue collection to ensure fiscal sustainability. The presentation noted that while the average tax-to-GDP ratio in lower-middle-income countries is above 12%, Bangladesh's ratio fell to 6.8% in the 2024-25 financial year.
RAPID further suggested developing a national strategy to manage geopolitical risks to development.
"Geopolitical issues must be kept in mind when making any economic decision," Razzaque said.
Speaking at the event, National Board of Revenue (NBR) Chairman Abdur Rahman Khan said individual and corporate tax rates had been reduced significantly over the past few years and there was no further scope for cuts.
However, he said the government hoped to increase revenue by removing barriers to doing business and making the business environment easier. He also said tax files would no longer be selected for audit based on officials' discretionary power.
Raising questions over the falling tax-to-GDP ratio, Abdur Rahman said, "Our average revenue growth is 15%, yet the tax-to-GDP ratio is declining. We need to research whether there are distortions in our GDP figures."
Business leaders flag law and order, investment fears
Anwar-Ul-Alam Chowdhury Parvez, president of the Bangladesh Chamber of Industries (BCI), said the law and order situation had not improved and people were yet to feel secure.
"We had hoped the law-and-order situation would improve, but that has not happened; instead, a mob culture has developed," he said, adding that business and investment will depend on how the next government addresses these issues.
Parvez, also a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), expressed concern over new investment.
"Classified loans stand at Tk6.44 lakh crore, inflation is over 8%, and businesspeople are afraid because interest rates will not come down anytime soon," he said. "There is no energy security. Port charges are being increased in the name of efficiency."
"If costs rise everywhere and businesspeople are then told they are all the same and shown no respect, why would they come to invest?" he asked. "If businesses do not come and the economy does not run, it will become a risk for everyone."
Rights and safety concerns raised
Former adviser to a caretaker government, Rasheda K Chowdhury, raised concerns over citizens' safety and state responsibility while responding to a recent remark about women's rights pioneer Begum Rokeya.
"At state programmes, the slogan is 'I am Rokeya', yet that 'I' becomes a murtad and a kafir. But I have not heard any statement from the government," she said.
"So when I go to vote, when I pay my taxes – who will ensure my safety? After all, I am considered 'murtad' [an apostate], I am considered 'kafir' [an infidel]. Who will guarantee my safety when I move around in public?"
The comments referred to a statement made on 9 December by a teacher of Rajshahi University, who described Begum Rokeya Sakhawat Hossain, a pioneer of women's awakening and rights movements, as a "murtad, kafir"
