The launch of the government’s flagship programmes reflects its commitment to fulfilling electoral promises, but six months is far too short to deliver the relief people expected, Finance and Planning Minister Amir Khosru Mahmud Chowdhury has said.
In an interview with The Daily Star at his residence on Friday, Khosru offered a candid assessment of the economy and the challenges facing the new administration.
“The relief that the public truly expected and desired, we certainly haven’t been able to reach that point yet. It can’t be fulfilled within six months,” he said.
“This is a problem driven by external factors. Unless this war [US-Israel’s war on Iran] ends, no one can say for sure how long the crisis will last. We have no control over that,” Khosru added.
He said the government’s fundamental mandate is to democratise the economy by dismantling patronage-based systems and creating equal opportunities.
Despite the obstacles, including the global energy crisis, the government has rolled out the Family Card programme to protect the most vulnerable, he said. Under the programme, nearly 41 lakh families below the poverty line will receive Tk 2,500 a month this year.
Calling the initiative “extremely successful”, Khosru said the selection process is free from political interference, with an error rate of only 1 to 1.5 percent that is being corrected. An algorithm prioritises the ultra-poor for inclusion.
The Farmers’ Card programme is also moving toward full implementation after a successful pilot, he said. “The work has just started now. If it starts today, it won’t have an impact tomorrow; it must be given time.”
Speaking about the ongoing energy crisis, Khosru did not downplay the scale of the challenge.
“Gas and electricity problems are a matter of time. This cannot be solved by tomorrow morning; what we inherited from before cannot be fixed overnight. It takes time,” he said.
“This gas and load shedding is a massive problem in Bangladesh. When we came to power, we entered right in the middle of this crisis,” he added.
Since land-based storage facilities take years to build, the government is urgently pursuing floating storage regasification units (FSRUs). Negotiations are underway with two or three companies, while sites are being selected where three or four FSRUs could be clustered together.
But geopolitical disruptions continue to hinder supply.
Khosru highlighted that five countries are chasing a single LNG cargo, making deliveries uncertain even after contracts are signed.
“If I place an order now, they [suppliers] make commitments, but they cannot ship,” he said. “On top of that, the Strait of Hormuz remains closed. So, the supply routes have become limited.”
With Middle Eastern refineries suspending operations, Bangladesh has been forced to rely heavily on spot-market purchases while balancing existing and new long-term arrangements.
“This is happening continuously, running like firefighting every day. We don’t really have much control over external factors. We have no control over the supply line,” Khosru said.
Despite the crisis, inflation fell below 9 percent in July. Khosru said it would have declined further had the Middle East conflict not erupted.
He added that the government continues to absorb substantial fiscal costs to shield consumers from global fuel price volatility. While oil prices doubled in the United States and rose more than 25 percent in Sri Lanka, Bangladesh kept domestic price increases to a minimum.
“It has a multidimensional impact,” he said, referring to the effects on electricity generation, industrial output, employment and inflation.
Khosru said several macroeconomic indicators are showing resilience.
Exports have recently rebounded, while around 13,000 people have secured jobs in the banking sector.
A Tk 60,000 crore stimulus package for small and medium enterprises is expected to create employment for 25 lakh people.
To reduce dependence on conventional energy, the government aims to add 5,000-10,000 megawatts of solar capacity within the next 12 to 18 months.
The sector has been made duty-free to encourage private investment.
Deregulation remains a cornerstone of the government’s five-year agenda. Khosru said entrenched vested interests pose the biggest obstacle to reform.
“Its roots run very deep. The corrupt syndicate, those who are over-regulating the country, have vested interests here. And they are the ones who will create obstacles.”
A dedicated task force has been formed, and a public portal will soon allow businesses to report compliance failures.
“If anyone creates obstacles to implementation, we are going to take remedies for that too,” Khosru said.
He said widespread automation across government systems is being accelerated and should be completed within two years to reduce corruption structurally.
Khosru said the upcoming recommendations on the government pay scale will be implemented gradually.
“Since we committed to a staggered approach, we will implement it in a staggered manner. Implementation will begin within this year. Calculations are being made as to how much. Our budget has become constrained now.”
Such fiscal constraints have forced the government to adopt strict austerity measures, including sharply reducing foreign travel, Khosru said.
Unlike previous governments and the interim administration, which sent delegations of around 100 people to the UN General Assembly, Prime Minister Tarique Rahman will travel in September with a much smaller entourage, according to Khosru.
Executive motorcades have also been reduced to three or four vehicles, pilot cars withdrawn for all but a few senior ministers, and fuel allocations capped.
He said that discussions with the International Monetary Fund are continuing over a new loan programme. “However, while their conditions will be met, proper sequencing must be maintained. As an elected government, we cannot simply accept a loan under any conditions.”
On taxation, Khosru said the separation of tax policy from tax administration “must happen”. A specialised expert group will formulate tax policy, while a separate body will handle implementation.
He attributed strong revenue growth in the last quarter to better management, transparency and anti-corruption measures.
To expand the tax net, the government plans to introduce a flat tax for rural and urban traders.
“Whatever one can afford,” he said, explaining that the goal is to bring small traders into the formal system “without putting too much pressure on them... at a flat rate within their means first”.
At the same time, authorities are calculating the liabilities of large tax evaders based on their market share.
Khosru said amendments to the Bank Company Act will address insolvency, reduce the number of family members on bank boards and shorten directors’ tenures.
“Whatever is necessary to bring transparency and accountability, we will do.”
Asked about Bangladesh Bank’s autonomy after years of political interference, he argued that everything was being done in line with the law.
“Aren’t those in the law? Everything is in the law. Now, if you don’t follow the law, that’s a different matter. We want to keep Bangladesh Bank’s operations independent.”
He said the inherited process to merge five troubled banks was progressing rapidly.
The insurance sector is also undergoing tighter scrutiny. A newly appointed regulator is auditing unpaid claims and other irregularities, with punitive action promised against violators.
On possible mergers in the industry, Khosru said, “Let’s see; if necessary.”
The government has also given in-principle approval to Dhaka Metro Rail Lines 1 and 5, with discussion with Japan on the matter ongoing.
“Definitely, the metro rail will be built and not just metro rail, alongside it, monorail too will be built to connect the last mile,” he said, citing the need to save commuting time and reduce pollution.
Beyond transport, the government is working to formalise Bangladesh’s creative economy by supporting industries such as shitalpati, shatranji, nakshi kantha, theatre and music, with the aim of generating employment and bringing these traditionally unmeasured sectors into GDP calculations, Khosru said.
