Home Bank & Finance Future of economy depends on politics
Bank & Finance - January 1, 2024

Future of economy depends on politics

Mahfuja Mukul : The country’s economy is going through a crisis. Dollar deficit, decline in reserves, scarcity of gas and fuel, strict import conditions, excessive defaulted loans, liquidity shortage, lack of good governance, restrictive fiscal regime, political instability are among them. There is a lack of preparation to meet the new challenges associated with the use of artificial intelligence (AI), preparations for the fourth industrial revolution, and graduation from LDCs. Apart from this, the upcoming elections and the elections of some western countries including the United States are feared to have an impact on the country’s economy, economists and businessmen said. They said that good governance and accountability are needed to deal with these and make the economy dynamic; Which will depend on political commitment or political promise.
The former chief economist of the World Bank’s Dhaka office Zahid Hossain said, “Although there is some good news in the new year, there is no shortage of bad news. The new year is going to start with some crisis in succession; Especially excessive bad loans, high inflation, foreign trade deficit, financial sector irregularities, balance sheet imbalances of various financial institutions, liquidity shortage and lack of enforcement of rule of law in banks and financial institutions. It will not be necessary to make laws to deal with these. The law must be properly enforced. If even that is not possible, weak and evil institutions should be specially monitored. Merger can be done if necessary. For this, compliance, good governance and accountability must be ensured first. For which political commitment is needed. In that case, the coordination of related institutions including the government, political parties, central bank is necessary.
National elections are being held on January 7. Due to this, there is a risk of uncertainty in economic activities. If political stability is not maintained, it will be difficult to control inflation, meet macroeconomic challenges, increase industrialization, investment and employment.
Executive President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Mohammad Hatem said, “The contribution of businessmen to the economy is increasing. But there is no peaceful environment to do business. We don’t think the ban of the western world including the US is much. I have been facing such challenges. But the three major challenges are not being addressed, namely the energy crisis including gas, the ongoing harassment of the National Board of Revenue for mismanagement and the gross disparity in the value of the dollar. There is no use in talking about these things. It is important to solve these problems after the elections. If these are not removed, the order will decrease further. Because the recession in the euro has not improved much. Elections will be held in some countries including the United States. A political solution is needed to speed up business and economy in the interest of the country.
Dollar-crisis reserves are almost at rock bottom. Because nearly $20 billion have been lost in two years. The value of the dollar has increased. Again, the bank introduced a different price for the dollar. The dollar management is about to collapse. Traders are not getting enough dollars to import goods. Again, there are strict conditions on the import of products.
Bangladesh-China Chamber of Commerce and Industry (BCCCI) General Secretary Al Mamun Mridha said, “We are lagging behind in the use of artificial intelligence (AI) and preparation for the fourth industrial revolution and new challenges emerging from LDC graduation.” Preparations should be made from now to deal with these. Dependence on import duties should be reduced. However, these do not seem to be resolved quickly. But a permanent solution is essential. There is no option to increase dollar supply to LC for import of goods. If the country is stable after the election, the economy will do well. Effective initiatives are required for this.

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