The White Paper Committee report: How goes the reform?

As the interim government of Bangladesh inherited a struggling economy from the ousted Awami League regime, in order to start the recovery process, it formed a 12-member White Paper Committee on 29 August 2024. 

Led by economist Dr Debapriya Bhattacharya, the White Paper Committee was charged with dissecting the economic mismanagement of the previous regime and charting a path toward reform. 

The committee also comprised eminent economists and policy experts, including Professor Mustafizur Rahman (CPD), Dr Selim Raihan (SANEM), and former World Bank lead economist Dr Zahid Hussain. 

Their 397-page report, submitted in December 2024, was a damning indictment of systemic corruption, cronyism and institutional decay. 

The document revealed shocking financial irregularities across key sectors of Bangladesh's economy, painting a picture of systemic corruption that had become deeply entrenched in the nation's institutions. 

Recognising the urgent need for reform, the committee put forward seven key recommendations designed to stabilise and restructure the economy. These included immediate measures to restore macroeconomic stability, the creation of a new budget framework for the 2025–26 fiscal year, the development of a medium-term plan for 2025–27, the prioritisation of critical reforms, strategies for LDC graduation, acceleration of SDG achievements, and the organisation of a high-level dialogue with development partners.

Yet, four months later, the implementation of its recommendations has been sluggish, mired in bureaucratic inertia and political hesitancy.

The Business Standard spoke to Professor Mustafizur Rahman, distinguished fellow at the Centre for Policy Dialogue (CPD) and a member of the committee. 

"We can see some visible changes. We talked about banking sector reforms and curbing default loans. They [the government] have created a taskforce to oversee the banking sector reforms. There are attempts to bring back some of the laundered money from abroad. For NBR [National Board of Revenue] reforms, the separation of revenue policy and enforcement has been carried out," he said. 

"Megaprojects are being scrutinised, and public spending is being reviewed for different projects," he added. 

Ferdaus Ara Begum, a member of the White Paper Committee and CEO of BUILD, a public-private dialogue platform that works for private sector development, also said that there have been some visible changes. 

She mentioned two such cases. 

"There have been many investment agencies, with a number of ministerial agencies involved in the process. So, the investors had trouble registering their business, since they could not understand whom to go to. Based on our recommendation, BIDA [Bangladesh Investment Development Authority] has started to streamline the process to create an improved one-stop service which will benefit the investors," she said. 

"Also, we proposed the separation of revenue policy and enforcement at NBR to ensure better domestic resource mobilisation. It has been carried out, which is also a good example, even though we do not know how helpful it will be on the ground yet, since it will be enforced from the next fiscal year," she said. 

As a whole, we have yet to see any major change. Also, we have no clue on how the changes will be done or to what extent reforms will be carried out. The White Paper Committee has concerns regarding the slow pace.

Ferdaus Ara Begum, member, White Paper Committee and CEO, BUILD

However, there has been disappointingly little progress on implementing other crucial recommendations. While the interim government has taken some limited steps to control inflation and stabilise foreign exchange reserves, the broader structural reforms needed to address systemic corruption and mismanagement remain largely untouched. 

Both Dr Mustafiz and Ferdaus Ara expressed concerns about the slow pace. 

"The pace of change has not been as per our expectations. We expected more proactive action," said Dr Mustafiz. 

"As a whole, we have yet to see any major change," said Ferdaus Ara. "Also, we have no clue on how the changes will be done or to what extent reforms will be carried out. The White Paper Committee has concerns regarding the slow pace." 

There are cases where ministries have barely acted. The advisory council directed ministries to pick one recommendation each for implementation, but even this diluted approach has seen no action. 

For instance, the proposal to privatise parts of Bangladesh Biman was ignored by the Civil Aviation Ministry. 

The White Paper specifically recommended targeted support for approximately 1,500 export-oriented firms that each generate over $1 million in annual foreign sales — a strategic move to boost Bangladesh's export competitiveness. However, investigations reveal the Commerce Ministry has yet to implement any substantive measures to operationalise this proposal.

Now this begs the question: Why is the government dragging its foot on the reforms??

There has been institutional resistance being caused by the powerful bureaucrats and business elites in past corruption. Their reluctance to dismantle entrenched networks is palpable. Moreover, there seems to be bureaucratic inertia when it comes to taking actions based on the White Paper recommendations, said Dr Mustafiz. 

Some complex reforms (eg, banking sector cleanup) though, require time and technical capacity the interim administration lacks. 

"There are some medium-term recommendations. Those cannot be done overnight. Reforms will take time in sectors like education or health. The short-term progress is underway. We expect more speedy and energetic action in solving the problems we have identified to ensure our economic stability," Dr Mustafiz said. 

Moreover, as the demand for elections grows louder, the interim government seems wary of rocking the boat with bold reforms that could disrupt stability. Their focus is not limited to the economy only; hence, the slow pace. 

"The interim government needs to deal with law and order, macroeconomics and social issues. They cannot dedicate enough time for economic reforms," said Dr Mustafiz. "Therefore, we need the political parties onboard too. They need to include the plans to reform the economy based on our recommendations in their manifesto as well. We need a wider political consensus for the medium-term goals.

The lack of meaningful action on the White Paper's proposals raises serious questions about the political will to tackle the deep-seated issues plaguing Bangladesh's economy, leaving many to wonder whether this comprehensive diagnosis of the nation's economic ills will ultimately lead to meaningful treatment or simply gather dust on bureaucratic shelves.