Fiscal reforms not possible even after elections: Ahsan H Mansur

*It will be difficult to ensure the necessary fiscal reforms even after the parliamentary elections as the main beneficiaries of the mismanagement in the financial sector will remain regardless of the polls' outcome, Executive Director of the Policy Research Institute (PRI) Ahsan H Mansur said today (21 November).* Speaking at a press conference titled "IMF and Bangladesh'' at the PRI's office in Dhaka, he said, "The chairman of the National Board of Revenue may be changed. But most others in the system will remain. They don't want any reforms or automation. They only want to maintain the status quo." Against this backdrop, he said "The next government would have a difficult time tackling fiscal issues such as those related to revenue collection, government expenditure, monetary and exchange rate policies." Mansur also said there was no obstacle to releasing the $681 million of the second instalment of the IMF's loan programme next December. The situation, however, may change if a "powerful country" intervenes, he added. Mansur also highlighted the economic pressures due to high inflation, revenue collection shortfall, dwindling reserves and the exchange rate hikes, saying IMF prescribed reforms would ensure macroeconomic stability and inclusive growth. He, however, said, "These reforms would not be possible before elections, so inflation would hover around 10%." Adding that there was also no opportunity to bring any major reforms to the currency exchange rate at this time, the economist said it was hard to predict where the exchange rate would land. He said, "The dollar rate set by the central bank was not being followed while the banking regulator is not acknowledging the existing exchange rate in the market." He said the dollar exchange is taking place at the unofficial rate in the official interbank market. The unofficial rate is close to the rate in the kerb market. Calling such management of the exchange rate unexpected, the economist said it was causing a lot of distortion in the market. Mansur instead suggested that the exchange rate be left to market forces. The PRI executive director also rubbished the statistics being released by the Bangladesh Bank, saying all of those were fake. "They are being forced to create fake statistics," he said. Besides political instability and economic uncertainty, Mansur also said that the new government would have to face other international challenges. "This is the first time that external forces are extensively discussing the election of Bangladesh. At this time, the labour issue has gained a lot of significance. Speaking on the occasion, PRI's Research Director Dr MA Razzaque said this was the first time that political instability and economic uncertainty were both seen ahead of the elections. He warned that prolonged political unrest would only delay macroeconomic stability.
Published on: 2023-11-21 12:52:39.800224 +0100 CET