Bring transparency in election expenditures, the think-tank stresses
Youth unemployment is the product of a failing education system, the Centre for Policy Dialogue (CPD) said yesterday at a report lunching program.
The report titled ‘State of Bangladesh Economy and Upcoming National Elections: Priorities for Electoral Debates’ strongly recommended enacting a ‘Benami Property Bill’ to tackle the problem of black money in the economy.
The Center for Policy Dialogue (CPD) also underscored the need in bringing transparency in the election expenditures of the candidates to ensure the participation of honest and competent persons in the polls.
“It is now a big issue whether the election expenditure is becoming a barrier for democracy. We should look into whether the election expenditure can be adjusted with government expenditure in future,” said CPD Distinguished Fellow Dr Debapriya Bhattacharya.
Debapriya was speaking to reporters at the report launching at the BRAC Centre Inn Auditorium in the city.
He said the National Board of Revenue (NBR) should come forward to examine the authenticity of the declaration on the election expenditures.
Debapriya said now election has been made as big investment and eligible and honest candidates are not being nominated.
CPD arranged the program under the Independent Review of Bangladesh’s Development (IRBD) where Bangladesh’s major economic indicators, including revenue mobilization, banking sector, capital market, and balance of payments, unemployment, and agriculture sectors have been highlighted.
CPD’s Distinguished Fellow Professor Mustafizur Rahman, Executive Director Dr FahmidaKhatun, Research Director Khondaker Golam Moazzem and Senior Research Fellow Towfiqul Islam Khan, among others were present on the occasion.
Mustafizur Rahman urged all the parties to give guidelines in their election manifesto in increasing revenue earnings as the country tax-GDP ratio is very low.
On youth unemployment, the report said the average number of years of schooling was higher for unemployed individuals compared to employed individuals, across all age groups.
‘The positive link between higher education and unemployment could be explained by the nature of the nexus between education enrolment, education quality and employment,’ said the report.
To improve the situation, the CPD made a 10-point recommendation.
Improving Education System
One of the points was: Improved education system, availability of technology and internet, skills development through technical and vocational training, fair opportunity for all in the job market, access to information at national, regional and local levels, self-employment through entrepreneurship, students to employers connection, career counseling from an early stage, enabling environment for female youth and employment opportunities abroad.
The CPD in its report said Bangladesh loses a very high amount of resources as a consequence of illicit financial flows (IFF) and black money, saying the significant part of IFF was on account of trade mis-invoicing .
Measures to tackle black money
To tackle the menace, the think-tank put forward a number of suggestions. They are: Coordinated efforts by several policy actors including the Bangladesh Bank and the NBR, strengthen and operationalize the Transfer Pricing Cell under the NBR, data integration process (NBR data centre) should be established to reduce trade mis-invoicing and revenue leakages and introducing a Benami Property Bill .
Other major recommendations made by the CPD are :
Raise revenue-GDP and tax-GDP ratio
The revenue–GDP ratio in FY17 was 10.2%, which was 9.2% in FY09. While it showed signs of improvement between FY15 and FY17, it is still below the level attained in FY12, when the corresponding share was 10.9%.
Although the tax-GDP ratio did not show tangible rise, the share of direct tax did increase in total tax uptake. There was of course opportunity to improve the non-tax revenue component, the report said.
Over the last one decade, the performance of private investment is found to be at two levels during two periods. Growth of Private investment in FY14-18 was higher compared to FY09-13. The distribution of industrial term loan during the last decade reflects major compositional change.
Private sector investment turned out to be one of the critical fault lines in an otherwise robust economic growth performance. Notwithstanding development of infrastructure, the enterprises were deprived of a full support package, causing, among others, increase in cost of doing business. All these had a disproportionate impact on the small and medium enterprises.
Weak engagement of business-related rules and regulations had a discriminatory impact in the manufacturing sector. FDI growth was driven by reinvestment of profit and by inflow of new equity.
Capital market could not emerge as a strong supplement to debt financing and remained in a weak state. There was very low momentum in undertaking institutional and market reform measures in the stock market.
Coordination of industrialization with agriculture is necessary
CPD says, some measure of certain production growth was observed in the crop sector. Lack of diversification in crop cultivation, low yield rate, research-extension gap etc. have held back further improvement of the sector.
Indeed, the farmers suffered from an unpredictable price regime of their products. Climate change is also becoming a concern for the agriculture sector.
The number of judges dealing with the Money Loan Court Act 2003 and Bankruptcy Act 1997 should be increased to ensure speedy disposal of loan default cases and to reduce backlog. Immediate action must be taken against banks that are performing poorly and are ill-prepared for BASEL III. A new exit policy for troubled banks needs to be formulated, particularly taking into cognisance the ineffectiveness of the Oriental Bank model.
Bangladesh Bank should appoint a strong administrator immediately to oversee the operation of troubled banks. A proper audit of the bank should be performed to understand the real health of the bank. The culture of giving licenses to new banks on political grounds should be stopped. Given the size of the economy there is no need for new banks.
Lack of capacity building is a perennial problem that besets the SCBs in Bangladesh. Without human resource development through enhanced skills, SCBs will not be able to handle the emerging challenges facing the sector.
The event moderated by CPD Executive Director Dr Fahmida Khatun. CPD senior research fellow Tawfiqul Islam Khan, Research Director Khondaker Golam Moazzem and Director Anisatul Fatema Yousuf were present the program.