Collaborative reforms for Bangladesh's sustainable development
Faria Sultana | Source : Daily Observer, 20 January 2025

The White Paper provides an in-depth analysis of the current economic landscape, highlighting a range of concerning issues that have emerged in recent times. It notes the persistent inflation that has penetrated various sectors, affecting purchasing power and living standards for individuals and families alike.
Additionally, the document addresses the significant fiscal constraints that governments are facing, which limit their ability to implement effective economic policies or provide necessary support to struggling communities and businesses. Moreover, the White Paper observes a marked decline in public trust in financial institutions, a sentiment fueled by perceived mismanagement, lack of transparency, and previous economic crises. This erosion of trust has far-reaching consequences, leading to decreased consumer confidence and participation in the economy.
The authors of the White Paper emphasize the immediate need for macroeconomic stabilization, arguing that without decisive action, these challenges will only worsen. Although the paper lacks a significant methodological challenge, the gist and the outputs deserve attention. The authors were able to propose a detailed agenda for policy adjustments, urging stakeholders to reconsider current economic strategies to better align with the realities on the ground.
In addition, the document advocates for a series of institutional reforms aimed at improving accountability and governance within financial systems. By addressing these pressing challenges head-on, the White Paper asserts that it is possible to restore trust, stimulate economic growth, and create a more robust and resilient economic environment. Key points outlined in the document include:
* Persistent Inflation and Livelihood Crisis: Since 2021, inflation has surged, disproportionately impacting low-income households. This situation has raised serious concerns about the safety of savings, particularly in distressed banks, exacerbating the financial insecurities faced by these vulnerable groups.
* External Sector and Forex Reserves: There has been a temporary stabilization in the exchange rate market, yet the economy requires sustained improvements in its external sector and a boost in export growth to solidify this progress and ensure long-term stability.
* Fiscal Constraints: The current limited fiscal space restricts necessary support for both productive sectors and vulnerable populations. For private investment to flourish and job creation to gain momentum, policy guarantees must be implemented, including enhancements in logistics, utilities, and industrial harmony.
* Compartmentalized Responses: Existing policies, particularly the contractionary measures implemented by the central bank and tax adjustments made by the National Board of Revenue (NBR), have proven inadequate. There is a critical need for a stronger supply-side support system tailored to agriculture and various industries to foster growth.
* Banking Sector Reforms: Troubled banks require strategic capital infusions and effective asset recovery strategies. It's essential to rebuild depositors' confidence through transparent actions and consistent communication, which will help stabilize the banking environment.
* Public Finance and Debt Management: A thorough revision of the budget with realistic financial projections is crucial. Additionally, eliminating tax evasion and broadening the tax base are imperative steps. External debt restructuring and establishing partnerships with development organizations will also play vital roles in enhancing fiscal health.
* Economic Stabilization Programme: The Interim Government must spearhead a coordinated action plan, drawing guidance from an economic council composed of experts, policymakers, and business leaders. Monitoring progress, engaging in transparent communication, and involving stakeholders are essential practices that will guide this initiative.
* Phased Reforms: Immediate measures for stabilization should be prioritized, laying the groundwork for subsequent medium-term reforms. These reforms should concentrate on essential regulatory changes and effective macroeconomic management to secure a resilient economic future.
The recommendations highlight the critical importance of a well-structured and sequenced approach to achieving a sustainable recovery. This process should be anchored by principles of transparency, accountability, and robust collaboration among both domestic and international stakeholders.
The White Paper on the State of Bangladesh's Economy outlines a comprehensive reform agenda that necessitates a united front from political parties and civil society to achieve meaningful implementation. Given the acute economic challenges presented in the White Paper, it is clear that a synergistic effort, harnessing the strengths of each sector, is essential.
Political parties have a pivotal role in steering the macroeconomic stability of the nation. This includes tackling pressing issues such as soaring inflation, mounting fiscal deficits, and the struggling banking sector. For the reform agenda to be successful, it is imperative that these parties engage in constructive dialogue and foster a spirit of consensus around critical policy decisions.
This involves collaboratively working on strategies to stabilize the economy, curb tax evasion, and ensure prudent public expenditure management. Additionally, political parties must endeavor to enact the necessary legislation, cultivate policies that bolster business confidence, and guarantee that reforms are operationalized at every level of government.
They bear the responsibility of managing the transition toward a more sustainable and equitable economic framework, particularly in anticipation of graduating from Least Developed Country (LDC) status. Through proactive legislative actions, political entities can significantly shape the overarching economic strategy and lay the groundwork for successful reform implementation essential for this transition.
Equally significant is the role of civil society in ensuring the reform agenda's success. Civil Society Organizations (CSOs) offer invaluable insights, advocating for the interests of marginalized and vulnerable populations who may face disproportionate impacts from economic reforms. Their involvement is vital for monitoring the execution of these reforms, ensuring that they are not only technically sound but also socially inclusive.
Acting as vigilant watchdogs, civil society groups hold political parties accountable for their commitments and emphasize the need for transparent and effective governance practices. By supplying critical data, conducting research, and providing expert analysis, CSOs help to pinpoint deficiencies in policy execution and propose alternative solutions aimed at ensuring equitable distribution of the benefits arising from economic reforms. Through these efforts, civil society plays an essential role in shaping a more inclusive economic landscape for all.
The formulation of the national budget is a critical task that requires political parties to create a budget that is both realistic and aligned with long-term national development goals. Civil society plays a vital role in this process by offering insights on effective resource allocation, emphasizing the importance of a people-centered budget. This approach prioritizes sectors such as education, healthcare, and social protection, which have a direct impact on the lives of citizens. Through public forums, workshops, and consultations, civil society can facilitate the inclusion of ordinary people's voices in budgetary decision-making, ensuring that the budget addresses the needs of all sectors of society rather than just the interests of elites.
In the context of mid-term planning, particularly following the postponement of the 8th Five-Year Plan, collaboration between political parties and civil society is essential for creating a coherent national development strategy. While political parties lead the development of the mid-term plan, civil society should contribute input based on their understanding of ground realities. This collaborative approach ensures that the mid-term planning framework is politically feasible, socially acceptable, and aligned with sustainable development goals.
Another significant area for collaboration is in the transition strategy for graduating from Least Developed Country (LDC) status. Political parties need to develop policies that support Bangladesh's transition by promoting sustainable economic growth, diversifying the industrial base, and attracting foreign investment. Civil society has a crucial role in ensuring that the benefits of this transition are equitable, particularly for disadvantaged groups. Civil society organizations (CSOs) can monitor and evaluate the social impacts of this process, making sure that no group is overlooked.
The acceleration of Sustainable Development Goals (SDGs) implementation also requires coordinated efforts. Political parties are responsible for incorporating the SDGs into national policies and ensuring proper resource allocation for their achievement. Meanwhile, civil society can monitor progress on SDG implementation through various networks and advocate for stronger government commitments. They can also hold authorities accountable for any shortcomings, ensuring that economic challenges do not overshadow the pursuit of the SDGs.
Additionally, hosting forums for dialogue with development partners is an important arena for enhancing Bangladesh's external relations and economic recovery. Political parties should actively engage with international partners to secure funding, trade opportunities, and diplomatic support. Civil society must ensure that these partnerships are transparent and genuinely benefit the people of Bangladesh, especially in critical areas such as climate resilience, social protection, and infrastructure development.
In conclusion, the successful implementation of the reform agenda outlined in the White Paper depends on a dynamic partnership between political parties and civil society. Political parties are charged with providing leadership, strategic vision, and necessary legal frameworks, while civil society advocates for inclusivity, transparency, and accountability in the reform process. Through collaboration, both sectors can work towards stabilizing the economy while promoting equitable and sustainable development for all Bangladeshis.
The writer is a health economist with expertise in cost-effective healthcare solutions for diabetic populations in developing countries, holding a PhD from Universiti Sains Malaysia, a master's in political economy from Xiamen University, and a bachelor's in economics from North South University