Bringing more macroeconomic discipline to Bangladesh should be govt's top priority: Rehman Sobhan

Highlights:

• Bringing discipline into macroeconomic management should be government's utmost priority
• Government can introduce some discipline into regulatory system of banking sector
• Structural reforms needed in banking to be operationalised and made effective are going to take place over a period of time

Bringing discipline into the country's macroeconomic management should be the government's utmost priority, Chairman of the Centre for Policy Dialogue Professor Rehman Sobhan said today (18 January).

At an event in Dhaka today (18 January), while responding to a related question, the eminent economist said, "The interim government would make some attempt to bring about more disciplined macroeconomic management. But even over here, I do not see them being able to effectively take care of the problem of inflation within the tenure which is actually available to them."

During the inaugural session of a symposium, titled "White Paper and Beyond: Economic Management, Reforms, and the National Budget", Rehman said, "They [government] can introduce some discipline into the regulatory system of the banking sector. 

Most of the problems which are inherited by the interim government have been around for a very long time.

"But here again, the structural reforms which are needed in the banking system to be operationalised and to be made effective are going to take place over a period of time."

The symposium was organised by the White Paper Drafting Committee 2024 and implemented with the support of the Citizen Platform for SDGs at the China-Bangladesh Friendship Conference Centre in Sher-e-Bangla Nagar, Dhaka.

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Mentioning that preventing money laundering is a major problem, he said, "I don't know if it will be able to be taken care of anytime soon. After all, money laundering has been going on since Pakistan times. And now that you have got something like $30-40 billion of remittance money from floating around in the Hundi market, to effectively deal with that and to then prevent money laundering with that sort of resource available is going to be again, a very major problem."

Stating that the findings of the white paper will earn the most benefit for the prospective elected government in terms of use, Professor Sobhan said, "Most of the problems which are inherited by the interim government have been around for a very long time. 

"The problems which exist, therefore, have been around long enough to have become deeply embedded in the structures of society," he said, adding that the public debt crisis, which had been slowly materialising, became a much more aggravated problem in the last few years.

"Problems relating to private investment in FDI, the whole issue of one stop crisis, one stop solutions, this is an old problem," he said, adding there are deep structural problems facing the investment sector. 

"The whole weakness of leverage financing and the absence of a functioning equity market where you are generating resources through equity investments. You are over leveraged by heavy borrowing and that has created the prices which you are facing. And this is not going to be a problem which will go away. This has now created a default crisis."