The leaks of funds through open floodgates is a predominantly growing concern in the country from economists, analysts, the civil society and the press these days. Among so many corrupt means of fund leaks capital flight, money laundering, bank heists, false billing on public works not actually done, public job sellout by syndicates, under-and over-invoicing are specially counted. What is being termed “treasury loot” through the cyber-heist in Bangladesh Bank's reserve account with the US Federal Reserve Bank New York epitomizes drain on public money by means of bank burglaries and forgeries.Financial discipline imperative in the banking sector
Those who can invent conduits for
evading the octopus of tax net can get way; those who cannot – the honest ones – get caught in a mesh
Prof. Sarwar Md. Saifullah Khaled
The leaks of funds through open floodgates is a predominantly growing concern in the country from economists, analysts, the civil society and the press these days. Among so many corrupt means of fund leaks capital flight, money laundering, bank heists, false billing on public works not actually done, public job sellout by syndicates, under-and over-invoicing are specially counted. What is being termed treasury loot through the cyber-heist in Bangladesh Banks reserve account with the US Federal Reserve Bank New York epitomizes drain on public money by means of bank burglaries and forgeries.
It has been pointed out by the discussants at a per-budget meeting held on April 24, 2016 in the countrys capital city Dhaka there are legalised ways, too. Indemnity on public purchase and project contracts through unsolicited bids, recurrent extension of mega projects periods and cost escalations, large loan rescheduling, interest waivers and recapitalization are listed as the legal instruments of siphoning funds from the public exchequer. The State Minister for Finance had a cryptic reply to this: Yes, we are tired with the public banks. In this case, we have something to do, and we are doing so.
The State Minister for Finance agreed with the media representatives that banks continuous loss is hurting the countrys economy and he underscored the need for reforms in the public-sector banks. True incremental bigger budget is an imperative for realising Bangladeshs development potential, but the calculations must match with proper policy supports on fund raising and spending. Economists opine failing this, the budgeting ends up in juggling with figures, sans delivering the due goods. Such mismatches also figured high at the pre-budget meeting of governments finance wing with the countrys media chiefs or their deputies.
In an officially sponsored talk at the Bangladesh Institute of Development Studies (BIDS) the same day April 24, 2016 much the same sentiments ricocheted. It came clear from the cutting-edge discussion sessions that there are gaps between big-hearted fixing of figures on budget outlay and revenue collection, priorities of the day and project proposals, targets of project execution and capacity constraints in achieving the ends, the allocations and outcome in real terms, need of management efficiency in various fields and faculties and a shocking shortcoming on that score and the like. Such jumble of paradoxes produce two harms for the nation: firstly, lack of development in real terms and secondly, drain on public money exacted through taxing almost everything common people eat, drink and do.
Those who can invent conduits for evading the octopus of tax net can get way; those who cannot the honest ones get caught in a mesh. Many funk from phoning on their mobile set or cut short talk for the dread of cumulative billing with high call charges of companies and VAT, SD instantly charged by government. At the pre-budget consultations came up the question of endemic taxation on a limited number of taxpayers on the net at high rates and myriad taxable ones ducking. This is seen as one of the fiscal paradoxes. The quality of public investment from the revenues being raised and the service people are receiving were also called to question.
Meanwhile, the Finance Minister has predicted that he is going to present to the nation in the upcoming financial year 2016-2017 with a taka-three-trillion-plus i.e. about Tk. 3.4 trillion outlay, in a major hike from the current financial years Tk 2951 billion outlay. Lack of oversights, maladministration, the weakening of basic institutions, lack of accountability, and venality replacing morality are cited as cardinal factors responsible for the happenings on the financial front. As pointed out by elite analysts at the just-concluded national policy conversation arranged by the official think-tank BIDS, one irreparable damage being done through such malpractices is jeopardizing social equilibrium through huge accumulation of wealth in few hands of plutocrats.
Income inequality is the vicious economic parlance. Such polarization of the privileged rich and the underprivileged, disadvantaged multitude bodes bad omens. Very dangerous are such social fissures. Dangerous crimes are taking place like in a chain and analysts are unanimous in ringing the alarm bell that much worse things might be lying in wait, unless the authorities rose to the occasion before time ran out. They point out political divisions as another device that may turn into the detonator to the powder-keg we all are sitting on. National unity, at least a semblance of political amity, cohesion can save the situation, help avert the lurking perils the precursors of which are evident as public security threats which are being counted out as hoax.
Laudable to all, the countrys economy is moving, albeit for its inner dynamics, development is taking place though investment stagnating and Gross Domestic Product (GDP) is growing at a near-fixed rate. However, governments statistical bureau BBS hopes to break the six-plus cycle in the current fiscal year 2015-2016. But the overwhelming observations that came out from the BIDS concourse is development, GDP lose meaning if real democracy is absent, public security at threat and inequality bedevils society. A human rights activist and TIB chairperson, also ex-adviser of the interim government, was eloquent in voicing such concluding view.
The general consensus of opinion is, Growth without participation and involvement of people does not mean anything to development as there is lack of feeling of sovereignty, gender equality and human rights. So, development should have a human face in a caring and humane society. Budget has to be conceived from the standpoint of a political economy geared towards a welfare state and discipline ensured in the financial sector, to keep a minimum cohesion with the fundamental principles of the restored Bangladesh Constitution.
The writer is a retired Professor of Economics
