Hasina's development model Bangladesh's unique contribution: Muhith

In the best of moods before placing a national budget, Finance MInister AMA Muhith is offering the world a new model for economic growth and development.

The 83-year old former bureaucrat now seeking to break the record for placing national budgets calls it the "Hasina model".

“The world has seen Malaysia's growth on Mahathir's model. Now it will see Bangladesh grow with Hasina's model,” Muhith says with exuberance.

In an interview to bdnews24.com at his ancestral house in Sylhet recently, Muhith said “all seemed well” for Bangladesh's economy.

"The political climate looks stable, the present government will be around until 2018, the disturbances have hopefully ended and we will not allow that to happen again,” Muhith said.

“The economy is on firm foundations, our forex reserves are rising, so are both exports and imports.” 

Muhith said his government will go for massive investments in infrastructure and key industrial sectors showing potential for growth.

“That will spur all round inclusive growth, the quality of life for all our countrymen will improve dramatically.”

Muhith will place the national budget on June 4 and hopefully it will passed on June 30.

Detailed interview:

Q: Anything dramatic that the country can expect in this year's budget?

A: Can’t say what is going to be dramatic. But the size of my budget this time will be bigger than what has been anticipated so far. After revised estimates, it seems the size of the ADP will be Tk 4 billion more than the original estimate.

Revenue expenditure would also be more than original estimates. The budget will cross TK 3 trillion, it will not be around that figure as was originally anticipated.

The current domestic and international situation has given me courage to risk such a jumbo budget. I have never presented a budget before in such a relaxed state of mind. The political climate is stable and I think we have managed to put an end to blockades and shutdowns.

Peace has returned and this will continue. Any kind of disturbance and violence will not be tolerated. Our entrepreneurs have regained the confidence. They will now invest and do business without any fear. They will contribute in country’s progress. On the other hand, fuel prices have dropped by half in the global market. Food prices are also low. Inflation is also under control. Foreign exchange reserve has touched $24 billion. Remittance by expatriates has also increased. Import is going up but so are exports.

Q: After a long time, we have got back the enclaves from India. Will you have a package for these areas?

A: Of course, my budget will have a special package for the enclaves. We have got them back from India after a long time. It is our duty to develop these enclaves which have remained backward for a long time. There will be special allocation for the enclaves we are getting back from India. Both my government and I think it is our duty to do something for them.

(Indian parliament has recently passed a Constitution amendment bill for exchange of 162 enclaves between the two countries. There are around 14,000 people in the 51 Bangladesh’s enclaves within India, while Indian enclaves have a population of 37,000.)

Q:  In pre-budget discussions you have promised to bring under the tax net all those who have capability to pay. Will that be possible?

A: That will not be totally possible this time but I plan to bring a large section of those capable within the tax net. In a country of 160 million, only 1.1 million people pay tax. This is a matter of shame. This cannot go on. I will increase the number of tax payers at any cost. The revenue board had conducted a survey and based on its findings some more people would be made to pay tax. I can assure you those numbers would not be “very less", they would not be insignificant.

Q: What about the banking sector? That had attracted some criticism?

A: It is true our state-owned banks had problems. But now things have got better. We have installed new Board of Directors in these banks and that has given them new sense of direction. The coverage of the banks have gone up sharply, the banking habit of our people has improved, a lot of people are getting the benefit of banking services. The Bangladesh Bank under Atiur Rahman is showing the way with policy innovations like the policy of financial inclusion.

Q: Which sectors will get highest priority in this year's budget?

A: As always in my budgets, power, energy and transport will get highest allocations. These are sectors that attract big investments. These sectors will attract high allocations until 2018.  Education, health, sanitation — allocations in these three sectors have to be increased and relevant schemes have to be adopted for improvement of facilities.

For example, 94-95 percent of our population are covered by sanitation. But many like the workers in the tea gardens have no access to sanitation or safe drinking water. This is a matter of shame for the whole country. And worst, this is not known to most that our tea garden workers live in such horrible condition. I know because I visit tea gardens. I have to do something to improve sanitation in tea gardens this time. A special programme will have to be undertaken. They are not foreigners, they came to our part of the world centuries ago, but have lived in isolated conditions. Unless we bring our indigenous people in the national mainstream and they prosper, it is a shame for Bangladesh.

Q: You said the size of the budget will be much bigger than last time. What about the deficit? How do you intend to cover the gap?

A: Though the size will be much bigger, the deficit will remain at around 5 percent, like in the 2014-15 budget. Revenue collection will go up sharply, you can say there will be a quantum jump. From Tk 1.45 trillion, I am expecting revenue collection to go up to nearly Tk 2 trillion. We have expected revenue collections to be around Tk 1.65 trillion but now it seems we will be able to touch Tk 2 trillion. I propose to develop the infrastructure for tax collection.

We will have, hopefully, an Income Tax office in every Upazila. Secondly, I am going to expand the tax net. I will not tell the tax collector to fleece anyone but the secret of increasing  revenue collection lies in widening the tax net and bring more people capable of paying into it. NBR has been told to increase the number of those paying taxes from 1.1 million to around 1.7 to 1.8 million. And then it should grow exponentially.  Despite the prevalent aversion to pay tax, our revenue collection has grown at 11 percent annually. In one year, the growth even touched 23 percent. This proves we can increase it with effort. And try we will.

Q: Will the four-laning of the Dhaka-Chittagong highway be completed in this financial year?

A: It is true this critical highway has taken time to be turned into a four-lane highway. The delay is regretted but I can tell you we are in the final stages of completing the four-laning of the Dhaka-Chittagong highway. It will be over in the next fiscal. The Dhaka-Mymensingh highway will also be four-laned within the next fiscal. Work on the Metro rail will start soon. JICA will do it. China also has promised to invest in many of our infrastructure projects.

The Padma bridge has a rail component. We will go in for large scale modernisation of our railways, taking help from India or China, whoever is willing to help us. We want to cover all districts with railways. Priority will be given to those districts which does not have railways so far. Then work on the nuclear power plant at Rooppur will also start.

Q: The Prime Minister has talked about modernisation of the armed forces?

A: I don't think we will have something very big on that front in this budget.

Q:The expatriates have been sending huge remittances. Do you intend any major incentive for them in this budget?

A: No, I don't. They also don't expect a major incentive. They only want to be able to come and move peacefully in the country. I meet many of them and they tell me they should be able to stay in the country for a few days in peace and move around without fear. It is a law and order issue. The PM has planned for police modernisation and expansion. 50,000 additional policemen will be recruited.

Q: Bangladesh's economy is looking up and political stability seems to have returned. Is it time for a major boost to growth using Malaysia's Mahathir model of development?

A: We have everything going for us right now. Our economic foundations are strong, peace seems to have returned, nobody is joining Khaleda Zia's disruptive politics. But Bangladesh will set its own example, its own model of growth. We will grow using the Hasina model of development, we don't need the Mahathir model here. We are setting an example of inclusive growth for the world to emulate. We are in power until 2018. We will go for massive investments in infrastructure and we have set the right example by starting work on the Padma bridge with our own resources.

Q: Will stability not be affected if Khaleda Zia resumes agitation for a snap poll?

A: What polls! There is no need for an election now. We will complete our full term in power. Two big power are talking about it (US and UK) but there is no scope for a national election now. We will complete our five-year term.

Q: Human trafficking from the country has become a big issue. Thousands are stuck in boats on high seas in inhuman condition. How do you react to this situation ?

A: I am seriously concerned. It is indeed tragic if people are stuck in boats on high seas without food and water. The agents responsible for trafficking must be identified and severely punished. Our government will do that.

We also have worked out a national labour export policy and set up training centres to create skills and awareness about opportunities abroad. We are getting good results. But people have to be aware of risks involved in attempting illegal migration.

Q: Awami league has won city corporation polls in Dhaka and Chittagong. Do you see these city corporations successfully embarking on development?

A: They have to be given some time. It all depends on development programmes the new Mayors undertake. I have told them to take their time, say six months, to work out a good development programme. Allocations will not be a problem.

Q: Are you going for family tax in the 2015-16 budget?

A: No, not yet. I wanted to try out property tax but it has not worked very well. I am slightly worried over that.

Q: An initiative was taken by the Awami League government that lawmakers will disclose their assets. But has it helped in tackling corruption?

A: It was a good move. Many disclosed their wealth. Action on this issue calls for a policy decision at the highest level.