Dr Debapriya Bhattacharya currently serves as a Distinguished Fellow at Centre for Policy Dialogue, Dhaka. He is also a Non-Resident Fellow at the Center for Global Development in Washington DC. He was Bangladesh’s Ambassador and Permanent Representative to the World Trade Organization and UN Offices in Geneva and Vienna. Additionally, Dr Bhattacharya is involved in various international development networks, holds positions in the governing bodies of several leading institutions including BRAC International, and is the Founding Chair of two global initiatives, viz. LDC Monitor and Southern Voice.
What key drivers are anticipated to influence Bangladesh’s economic performance in 2024?
Restoring Bangladesh’s economic stability requires addressing inflation, stabilising the foreign exchange regime, and managing external debt. Aligning the Taka’s exchange rate with the market and ensuring flexible interest rates in the banking sector are crucial steps.
Securing a stable flow of foreign exchange earnings, particularly through enhanced net exports and accessing more remittances from expatriate workers, will be necessary not only for meeting our outstanding demands for external payments but also to finance the stalled private investments. We may need to allocate a larger amount of foreign exchange in the near future to import food grains so as to ensure food security at the household level. Incremental foreign currency will also be necessary to service the burgeoning foreign debt liabilities.
To protect the consumption level of low-income households in the face of high market prices of food items, the To protect the consumption level of low-income households in the face of high market prices of food items, the government will have to scale up the open market sales by the Trading Corporation of Bangladesh.
Key development issues include diversifying exports beyond garments, enhancing agricultural productivity, and investing in quality education and healthcare. We must also tackle widespread inefficiencies and corruption, ensuring public services to disadvantaged communities.
What are some major challenges that Bangladesh may encounter in its economic development?
One of the biggest hurdles lies in the uncertainties surrounding the new government’s ability to undertake significant economic reforms. Success hinges on a strong political will to implement long-awaited institutional and regulatory changes, meeting international commitments, and navigating geopolitical influences in national development.
Amidst these uncertainties, a profound question echoes: how do we ensure that Bangladesh’s economic growth translates into shared and inclusive prosperity for all? On the one hand, in the recent decade, we have witnessed impressive GDP growth, infrastructure development and social welfare measures; on the other hand, income and opportunity gaps have deepened alarmingly. This discernable rise in inequality concerns not only income but also asset accumulation, consumption trends, as well as education and health indicators. We must confront this rising inequality, seeking ways to uplift those who have been ‘left behind’ in the march towards a higher-income country.
Neglecting the plight of our marginalised communities facing discrimination and deprivation of their civil rights not only hinders social justice but also undermines our economic potential. Integrating all sections of society into the national development narrative is not just a moral obligation, but a strategic imperative for sustainable growth.
With the possibility of a receding economic recession in the developed world, stable commodity prices in the international markets, and a decline in global inflation, potential opportunities await us. We must not let domestic political uncertainties, geopolitical factors, or any other unforeseen challenges prevent us from seizing them.
NEGLECTING THE PLIGHT OF OUR MARGINALISED COMMUNITIES FACING DISCRIMINATION AND DEPRIVATION OF THEIR CIVIL RIGHTS NOT ONLY HINDERS SOCIAL JUSTICE BUT ALSO UNDERMINES OUR ECONOMIC POTENTIAL. INTEGRATING ALL SECTIONS OF SOCIETY INTO THE NATIONAL DEVELOPMENT NARRATIVE IS NOT JUST A MORAL OBLIGATION, BUT A STRATEGIC IMPERATIVE FOR SUSTAINABLE GROWTH.
In your view, how can Bangladesh’s government strategically address issues related to inflation and maintain stable price levels?
There is no silver bullet for tackling inflation. It requires a comprehensive and coordinated strategy, particularly focusing on a dynamic interface between monetary and fiscal policies. Primarily, a prudent approach involves monetary control, involving a reduction in credit to the private sector and cutting down on government borrowing. Careful consideration must be given to interest rate adjustments to prevent the pass-through of imported inflation.
Managing the political and social fallout from public distress due to inflation is also pivotal. Thus, more domestic resources are necessary for underwriting expanded social protection programmes.
There are no supply-side failures when it comes to domestically produced goods and there is high demand for them. But the government’s measures had been pretty ineffective in controlling the syndicates that manipulate the prices and markets. Addressing price manipulation by such syndicates in the domestic market demands improved information flow, heightened oversight by governmental bodies, and broader engagement of the trade bodies and public representatives.
What role do you anticipate technology playing in Bangladesh’s economic growth and resilience in 2024?
The country must prioritise technological innovation as the pivotal force for achieving high-middle income status through economic structural transformation. Such transformation has manifested across diverse sectors, be it agriculture, manufacturing, or the high-value service industry.
Despite the emergence of new industrial activities, labour productivity has lagged behind the country’s competitors. To bridge this gap, fostering technological innovation is imperative. Meeting this demand requires a significant reservoir of high-calibre human resources, which Bangladesh currently lacks.
Entering the Fourth Industrial Revolution demands a reassessment of sectoral development programmes. The growing impact of Artificial Intelligence highlights the need to align technological transformation with the evolving ‘future of work’ to address the risk of job redundancy. Foreign recruitment at mid and high levels addresses the skills gap. Supportive policies and knowledge dissemination are crucial. Protecting intellectual property attracts foreign investments. Notably, advancements in information technology indicate potential leapfrogging, even with a modest developmental base.
Photograph: Shahinur Islam