Capacity to shoulder further pressure diminished, says Dr. Selim Raihan

In a comprehensive interview with a vernacular daily in Bangladesh, Dr. Selim Raihan, renowned economist and executive director of the South Asian Network on Economic Modelling (SANEM), delivered a critical assessment of Bangladesh’s latest budget, expounding on its implications for the economy and the welfare of its citizens.

Dr. Raihan's analysis began with a sobering reflection on the high expectations surrounding the budget, framed against Bangladesh’s prolonged economic crisis exacerbated by global upheavals and internal challenges. "The economic woes, compounded by the Covid-19 pandemic, the Russia-Ukraine conflict, and persistent inflation, have created an urgent need for decisive fiscal policies," he noted. However, he expressed disappointment that the budget failed to provide sufficient measures to address these pressing issues.

"The targets set for economic growth, inflation control, and private sector investment appear ambitious and not grounded in current economic realities," Dr. Raihan remarked, pointing out the adverse impact of additional taxes on essential services like mobile phones and internet usage, which disproportionately affect low-income and middle-class citizens.

Dr. Raihan underscored the imperative for comprehensive tax reforms, emphasizing the necessity of increasing tax revenues from the wealthy elite who often evade taxes. While acknowledging a modest increase in social safety net allocations, he argued it was insufficient given the deepening economic distress faced by vulnerable populations. "The government’s optimism about reducing inflation to 6% lacks realism," he observed, attributing this to ineffective adjustments in interest rates and monetary policies.

Turning to the budget's allocations for education and health sectors, Dr. Raihan expressed dismay at their continued neglect, despite commitments outlined in national development plans. "Investments in education and health are pivotal for human development and sustainable growth," he stressed, cautioning against the long-term consequences of underfunding these critical areas.

Addressing contentious provisions in the budget, Dr. Raihan critiqued the amnesty for holders of black money, arguing it contradicted the government's proclaimed stance against corruption. He warned against the ethical and societal implications of such measures, which he believed could erode public trust and discourage honest taxpayers.

In his concluding remarks, Dr. Raihan called for a fundamental rethink of fiscal policies to prioritize the welfare of all citizens, particularly those most affected by economic hardships. "Many families have reached their breaking point," he emphasized, urging immediate measures to alleviate their burdens and restore economic stability.

Throughout the interview, Dr. Raihan’s analysis resonated with a sense of urgency and a commitment to equitable economic policies, urging policymakers to address systemic deficiencies and uphold their obligations to the nation's development. His critique served as a poignant reminder of the challenges ahead and the need for bold, inclusive economic strategies to navigate them effectively.