Bangladeshis must tighten their belts as hard times loom, says Minister MA Mannan

With no end to the Ukraine war in sight, the minister said Bangladesh must spend less and produce more

With no end to the Ukraine war in sight, Bangladeshis must be pragmatic about spending and aggressive about raising productivity to energise the economy, says Planning Minister MA Mannan.

"[Unless] the Ukraine war settles down a bit – which I don't see any possibility of immediately – we are in for a difficult period," the minister said in an interview with bdnews24.com's 'Inside Out'.

"We have to tighten our belts, spend less, don't waste and try and work harder and produce more domestically. Rice, pulses, fish, poultry, everything, including electricity. But electricity we can't produce without the import of fuel. There, we have to give more attention."

The full interview with the planning minister is available on bdnews24.com and its Facebook and YouTube pages.

The planning minister expressed concern about the recent budget tabled by Finance Minister AHM Mustafa Kamal and its target of reining in inflation to about 6 percent on average.

Bringing it down to 6 percent from about 9 percent now is “going to be very difficult, if not impossible”. “So that is my first comment. It could be very, very tough.”

“How do you control it? [What is the] policy? Two ways -- internally earn and save. How do you earn? Export more and you earn dollars. How do you save? Cut on imports, unnecessary imports, luxury imports, that way you both earn and learn.”

The government must also take action to boost production, he said.

"At the same time also, you can control inflation by increasing the supply of basic goods in the market. What are the basic goods? Food items, and ordinary items of daily consumption. For those which are produced within the country, we can try and speed up and try to improve the quantity of the goods in the market. It'll take a little time. So a combination of both policies, control on imports, promotion of exports, and growth of domestic production. All this combined together can bring down inflation.”

However, there have been many allegations of price manipulation in the market, some of which regulators have confirmed. When asked about producers taking advantage of the current circumstances to drive up prices, Mannan said, "Manipulators, syndicates. We hear a lot about it. Well, we don't see manipulators. If we could see these manipulators, we could bring them under the law. But manipulators operate underground. So it's very difficult to get them together. We have specific laws against hoarding, specific laws against selling a higher price than the indicative price, but it is very difficult to apply on the ground."

The planning minister believes Bangladesh should instead take the initiative to bolster the supply on their own and drive prices down through the TCB programme and other methods.

"The government should be very agile, very prompt," he said. "The moment the price shows some upward movement, the government will get into the ground onto the market with truckloads of material and sell it a lower price that can bring it down."

The government has been attempting to do that with the onion market, but the Ministry of Commerce has flagged that farmers and other producers are currently pleased by the high price and are pushing for it to stay, he said.

Asked about the high construction cost of Bangladeshi projects, the planning minister was candid about the issues faced by the government.

"You want to build a road, what is the first requirement? What do you first need for building a building or building a road? Land. That is a major item. Land cost is very high in Bangladesh. We are a small country with little land. Talk about India? Unlimited land. Talk of China? Zero-cost land because in China all land belongs to the government. They don't pay anybody. We have to acquire the land, pay the owners and go through a court process.”

Another issue is a lack of sufficient high-quality construction equipment, Mannan said.

"You go to Japan, Germany, even Thailand, Malaysia, they use the latest equipment in big quantity. We are using old equipment. So it is slower, the output is low."

But with larger projects, two issues stand out, he noted: “Two matters – quality and time. [Bangladesh is] weak on both things, I must admit. The quality of the work in many cases turned out to be shoddy. Maybe corruption is there, maybe lethargy. People don't work. People who supervise the masons don't go there.”

“Time issues are very universal in our country. We are not very punctual people. Our workers go for tea, they go home for Eid for five days and don't come back for 15 days.”

"Earlier, our officials used to work for the British, for Pakistan, but we work for ourselves now. In Bangla, there is a proverb that says you can do whatever you want with government property. This is in our culture, we have to come out of it.”

The implementation also suffers because the system has many redundancies, restrictions, and red tape that slows down the process, Mannan said. He described an example of a project director needing his boss’s signature but unwilling to bother them for it, leading to the issue getting dragged out.

“These are very, very complicated issues in the system itself. It will require a lot of changes. The government is trying hard. [Project directors] are given more independence than before. Allotments of funds go quicker by computers nowadays than before. But even then, the implementation rate is not as good yet. It should be. And we are working on that.”