Finance Adviser Dr Salehuddin Ahmed said on Saturday that Bangladesh's economy was beginning to stabilize despite earlier challenges, with foreign currency reserves showing positive growth.
He credited foreign partner organizations for their encouraging response to the current economic measures.
Dr Salehuddin was speaking at a business conference organized by the Dhaka Chamber of Commerce and Industry (DCCI) in Dhaka.
The finance adviser acknowledged that undoing the irregularities and corruption inherited from the previous government is a gradual process.
“Rectifying what happened in the economic sector over the last 15 years is unimaginable within two to four months. However, in the future, no one will be able to launder money,” he asserted.
He also highlighted recent interventions, saying: “Tk22,000 crore was recently provided to banks. The central bank governor was initially reluctant, but I insisted on stabilizing the situation. However, newspapers have reported that new currency will be printed. Naturally, money must be printed, as currency depreciates over time. What else can Bangladesh Bank do? But this isn’t like printing Tk60,000 crore as before.”
Dr Salehuddin added that the government is taking measures to ensure the credit supply to the private sector does not shrink significantly, though it has slightly declined.
On private sector credit, he noted that the policy rate will not be increased for now. “The government is focused on maintaining credit flow to the private sector,” he said.
Dr Salehuddin stressed the need to separate revenue collection from policy making within the National Board of Revenue (NBR). He assured that the country’s graduation from LDC (Least Developed Country) status would not have a negative impact on the readymade garment (RMG) industry.
-Law and order deteriorating-
The interim government has failed to tackle the country's law and order situation, business leaders said at the conference.
It will be difficult to maintain the economy if the situation does not improve soon, they also said.
The government is trying to rebuild the institutions which were destroyed over the years, said Selim RF Hussain, managing director of Brac Bank.
However, he stated that the government has failed to handle the law and order situation. "I am sorry to say that the interim government has been a total failure in this regard."
He called on the government to fix the situation promptly. "Otherwise, it would be very, very difficult to pick up the economy."
The banker also said the banking landscape would change significantly in the coming days.
He emphasized focusing on the exchange rate, lowering the inflation rate, and maintaining a conservative monetary policy.
Incepta Pharmaceuticals chairman Abdul Muktadir Rahman said that the law and order situation has declined sharply. Nothing can be more important than this now."
He called on the government to fix a timeline to fix the situation. "Let us not close our eyes. We have to keep our eyes open and face reality."
Stating that energy supply to industries is facing a shortage, he said: "We are looking to find out the new sources of gas to supply those in the industrial belt. There are controversies and different opinions, but this is the reality. We have to look for new sources."
BKMEA President Mohammad Hatem alleged that Mahmud Group's Deputy Managing Director Rafee Mahmud, who is also the son of the owner, was attacked on Friday when he went to talk to protesting workers in the presence of the army.
"Such incidents will send a negative message to buyers. The entrepreneur [Mahmud Denim MD] had to close down two of his factories due to gas shortage. The workers' salaries have been paid. Talks are ongoing with banks to clear their service allowance. The attack took place at such a time," he said.
In support of Mahmud Group, he said: "If the owner did not want to pay the workers, he would have fled."
Also condemning the attack on Rafee, Bangladesh Association of Banks (BAB) President Abdul Hai Sarker said if the situation does not improve, investments would not come.
Responding to the concerns of the business leaders, Commerce Adviser Sheikh Bashir Uddin said: "The law and order situation is improving but anarchy is being created deliberately."
In response, Salehuddin Ahmed said: "The government is doing its best. It would not be right to think that 15 years of mess can be fixed in three months."
He said corruption during the Awami League government has damaged the economy to the point that it would be impossible to fix it within two to four months. "But the damaged economy has started to stabilize. Reserves have increased slightly."
Speaking about the reforms in the finance sector, the adviser said: "Policy rate would not be increased for now. The government is also focusing on maintaining the loan inflow in the private sector."