Planning Advisor Wahiduddin fears chaos could trigger ‘economic recession'

There is no investment in the private sector. The interest rates have also increased a lot, the advisor says

Planning Advisor Wahiduddin Mahmud is wary of an economic recession if the government does not raise development spending in the wake of the political and labour unrest and new investments drying up due to the high bank loan interest rates.

Speaking to the media after a meeting of the Executive Committee of the National Economic Council, or ECNEC, on Monday, the advisor said, “Stagnation is being seen in the private sector production alongside in the garment sector because of the political uncertainty and chaos.”

“There is almost no investment in the private sector. The bank loan interest rates have also increased a lot, discouraging entrepreneurs from making new investments. In these circumstances, an economic meltdown is likely if the government does not raise development spending.”

Asked what the government would do in this situation, Wahiduddin said the interim administration is planning to initiate new projects at the earliest for the development of new “innovative and human resources.”

He said a letter would be sent to all advisors to this end upon consultation with the chief advisor, calling for speeding up the implementation of the projects.

The advisor promised that efforts to keep the projects 'corruption-free' would continue.

Asked what will happen to growth if there is no investment in the private sector, he said: “A significant amount of growth is possible even if there is no investment in the private sector for a year."

DEVELOPMENT BUDGET SHRINKING

Wahiduddin also disclosed the decision to cut the size of the Annual Development Programme, or ADP, taken by the deposed Awami League government.

"We had said at the beginning that every year the implementation remains less than the budget. This time, the development budget will be reduced for several reasons.”

"Many old projects and those that were proposed have been dropped. Many of them appeared politically motivated and not profitable compared to the cost."

Regarding the size of the reduced plan, he said: “We have yet to plan the size of the budget this year. The revised budget is usually presented in December."

When asked about the ADP implementation rate in the first four months of this year, which was the lowest in the past 15 years, the advisor said: “This is the previous government’s budget, not ours.”