The three main challenges for the Bangladesh economy were persistent inflation, rising debt burden, and slow economic growth, said Distinguished Fellow at the Centre for Policy Dialogue (CPD) Dr Debapriya Bhattacharya on Sunday.
The think tank emphasized strengthening transparency, participation and oversight in the budget delivery process.
They also urged the government to allow local level citizens to be involved in the budget delivery and monitoring process including selection of participants in social protection programs and implementation of public investment projects to reduce leakages and corruption.
The CPD, in association with Citizen's Platform for SDGs, made the observations at a dialogue titled "New Government, National Budget and Citizens' Aspirations."
Citizen’s Platform’s field survey showed that 64% respondents had no expectations from the government’s upcoming budget for FY25.
Debapriya, in his keynote presentation, said: “The unabated higher inflation is pushing low-income and marginalized people to the wall. They are facing intense problems in affording food, health and health services.”
He urged the government to allocate more funds for social protection, education and health.
He also demanded allocating funds for ensuring decent employment and labour rights for all.
Debapriya recommended the government increase allocation for education (to over 3% of the GDP), for health (over 2% of the GDP) and for social protection programs (to over 3% of GDP).
Take away the pension fund out of the total social security allocation and distribute it to the actual social safety items for disadvantaged communities, the CPD distinguished fellow also said.
"Create an accurate database of disadvantaged communities for better integration and to mitigate the 'exclusion and inclusion error' regarding the social security programs delivery, and sector-specific allocation," he added.
He informed that the country's reliance on borrowing for debt servicing was increasing, along with the debt risk.
If the private sector debt is taken into account, Bangladesh's debt-to-GDP ratio is 42% now, he stated in his keynote.
"Bangladesh has never fallen behind on debt payment, but we know that around $5 billion in debt is unpaid in the energy sector," he said.
Economic slowdown
In terms of the economic growth slowdown, the economist first pointed out towards the contractionary monetary policy.
Apart from this, disruption in power and energy supply, import restrictions, restrained public expenditure, slowing manufacturing sector growth, dwindling export earnings and fall in import payments were also identified behind the slowdown.
The report also highlighted that there were a number of transitional challenges -- LDC graduation, SDG delivery, 8FYP's completion and geo-strategic issues.
Debapriya emphasized technical and vocational skill development as per the global standard by considering the 27.4% Neet (not in employment, education or training) youth population.
Regarding subsidies, he suggested enhancing it to sectors such as agriculture, small and medium enterprises (SMEs), food security programs, and other sectors such as health and education (where the out-of-pocket expenditure is very high) to ease the inflationary pressure.
Dr Bhattacharya, however, also urged the government to ensure strong leadership and coordination among the government agencies, while devising and implementing policy decisions.
He recommended ensuring disaggregated budget reporting using real time data at the national parliament under the Public Money and Budget Management Act 2009.
He also urged the government to ensure regular monthly meetings of the critical parliamentary committees related to public finance management such as Standing Committees on Ministry of Finance and Ministry of Planning, Public Accounts Committee, and the Committee on Estimates and Committee on Public Undertakings with opportunities for public hearings involving relevant stakeholders and citizens groups as well as briefings by amici curiae.
MA Mannan, now the chairman of the standing committee on Planning Ministry, said the government is giving different allowances for the welfare of the people.
"The government is providing different allowances which have a huge impact. So, the government should expand the areas of this allowance in the upcoming budget," he added.
Deputy Leader of the opposition in the national parliament and former minister Anisul Islam Mahmud thanked CPD for organizing the dialogue and said this kind of dialogue can have a good role in the budget preparation process.
Executive Director of Campaign for Popular Education (CAMPE) Rasheda K Choudhury and CPD Distinguished fellow Dr Mustafizur Rahman, among others, also spoke on the occasion.
CPD Executive Director Dr Fahmida Khatun chaired the event.
At the dialogue, representatives of various civil societies also placed their budget proposals.
