Let The Market Decide The Exchange Rate

Falling value of Taka against the dollar Brings more remittances from blue collar. Letting market fix the exchange rate Withers away chances to speculate.

Central bank has decided to delay the decision to pursue unitary exchange rate till September.Rate set for remittances is higher than that for export earnings. Two conditions among others set by IMF to get the next instalment of IMF credit are : to raise the forex reserve by $1 billion ( total $23 billion excluding the $7 billion lent to commercial banks) and to follow a unitary exchange rate system from the start of new fiscal year (July).

Bakri eid witnessed overwhelming swell in forex reserves. Migrant Bangladeshi workers sent around $2 billion in the 21 days of June. So actual forex reserve reached $24 billion from $22 billion. However, Bangladesh Bank keeps showing the forex reserve as $31 billion (including the $7 billion loan to commercial banks). News reports say the central bank has started buying US dollars from banks to swell the forex reserve further. But the decision to postpone a unitary exchange rate came amid government’s repeated failures to provide adequate foreign currency to power plants to procure coal from abroad. In addition, govt's debt service obligation and some ongoing big infrastructure projects also put pressure on dollar demand. Govt may print more money to meet the need. Further depreciation of Taka may raise the cost of such project and sending money abroad.

In September, an IMF team will come to a scheduled visit to review the conditions set by it for clearing the second instalment. Raising the policy rate (repo rate) by 50 basis points ,increasing the reserve by $1 billion ,removing the cap on bank lending rate, raising the utility bills, moving towards market determined fuel rate ,redefining social security spending etc show how far the government has progressed. However, increasing the tenure of directors originating from the same family in the amendment of bank company act, delaying the unitary exchange rate, reclassification of default loans through 20% repayment also indicate government is in no mood for any bold reform work.

Meanwhile, many including me argue that such small increase in policy rate may not contain the inflation rate. In addition, setting the exchange rate at multiple levels also encourage money laundering. Remember that there is unprecedented hike in policy rates in occidental countries. In particular, USA surpassed all of them. So dollar deposits earn more than other currency deposits. So investment, clandestine money flow ends up in America. This partly explains 94% reduction in the deposits held by Bangladeshis in Swiss banks. When Canada,UK toughened their immigration policy ,Bangladeshi deposits in Swiss banks swelled. By not allowing Taka to depreciate further and not raising the policy rate enough,we are making it easier for the wealthy to invest in these countries. Many of our exporters and importers have partners abroad. Through them they can put their money into these foreign currency deposits or cut some sort of currency swap agreements to take advantage of the arbitrage opportunity if domestic exchange rate is not favorable enough. If they see interest rate will rise in future and Taka will depreciate more, then they will prefer to bring the export proceeds later to gain more. That is why the best remedy is to trust the market and let it fix the rate. This will wither away all the speculative motive. However, the current decision of the central bank has introduced friction into market, which in the end helps the currency speculator.

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Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
24	Pain tchapati,Pomme de terre	Riz,Soupe aux haricot mungo avec tête de Ruhi,Épinard d'eau	Paratha,Gourde pointue	Arachide
25	Pain tchapati,Gourde pointue	Riz,Pama Croaker avec Gourde épineuse, Purée de pelure de gourde pointue	Paratha(fait par moi),Purée de pelure de gourde pointue	Arachides
26	Pain tchapati,Gourde blache	Riz,Haricot vert,Soupe aux lentilles,Pama Croaker	Riz,Soupe aux lentilles, Gourde blanche	Arachides
27	Paratha(fait par moi),Haricot vert	Riz,Gombo,Purée de gourde épineuse, Perche grimpante	Pain tchapati,Pois chiches	Arachides
28	Paratha(fait par moi),Gombo,Haricot vert	Riz,Soupe aux lentilles, Pama croaker,Feuilles de pomme de terre et épinard d'eau	paratha(fait par moi),Gourde blanche	---
29	Pain tchapati,Gourde blanche	Riz,Ruhi,Gourde blanche	Paratha(fait par moi),Omelette	---
30	Pain tchapati,Gourde blanche	Riz,Soupe aux lentilles,Purée de pomme de terre	Riz,Soupe aux lentilles,Ruhi,Purée de pomme de terre,Papaye et harcot vert	---

Is Bangladesh Bank Really Independent?

Meddling in decision making Yields result no one seeking.

Bangladesh Bank raised the policy rate by 50 basis points, detailing its inflation containing measures in the monetary policy statement for July-December. However, the increase may not be good enough to contain the inflation. Real interest rate is still negative( -4.26% for deposit and -1.35% for lending)¹. This means inflation is still higher than nominal interest rate. And we need to raise the interest rate high. Many argue inflation is hovering around 15%. Rate charged by unofficial money lenders could be a good indication of the market rate.

Central bank's argument of injecting $13 billion into market and mopping up Taka in the last one year sounds hollow as inflation officially is around 9.94%. It is not clear how it oozed the demand pressure.

Another thing I discussed earlier following the MPS in January is that Bangladesh Bank flaunts export receipt growth as an indication of demand increase of Bangladeshi items abroad². However, inflationary pressure is still there and prices of lower end items that Bangladesh export in bulk quantities also rise. Bangladesh Bank's own figure on policy rates of advanced countries show an upward trend since December 2022(see picture). Of course demand for Bangladeshi items is in rise in other countries, but the growth in export receipt does not account fully the growth in demand. Inflation played a role here and ratio between export earnings and volume could have yielded a better picture. Cargo handling through Chattogram port also declined significantly in recent months.

Policy rates of advanced countries (Source:MPS,Jul-Dec,2023,Bangladesh Bank)

Bangladesh Bank labelled the decision to downgrading the credit rating of Bangladesh by Moody's as a geopolitical one. Why did some banks based in Dubai and Singapore lower the credit limit and increase loan conditions for Bangladeshi banks if this is so? Both UAE and Singapore have good relations with Bangladesh and affluent Bangladeshis in general pick up the two countries as second home. Singapore is one of the top five investor countries.

Central bank also claimed that it takes decision independently and there is no political intervention.

Central bank is run by prudent and competent personnel. Their integrity and commitment to run an organization is not questioned here. Unfortunately , it is no distant island in Bangladesh’s command and control political atmosphere. On some occasions, past actions revealed how its independence was compromised:

• Bangladesh has long been following multiple exchange rates. Gaps in the rates discouraged bringing foreign currency home and played a conducive role to send foreign currency abroad. Many economists argued this mismatch plus incentives on remittances went in favor of speculators and money launderers. And future depreciation of Taka will benefit opportunists who willfully delayed bringing their earnings at home. It is naïve to say Central bank is ignorant about this fact. I think political pressure held it back from taking the right stand.
• In November last year, while an IMF team was in an official visit to Bangladesh, a little known Nabil Group swindled around Tk 90 billion from several Islamic banks.Till date,whereabouts of the money is not known.This plundering shook depositors' confidence so much that many were prompted to withdraw their money,leading to a liquidity crisis in the Islamic Banks. To address the crisis, central bank provided Tk 147.90 billion credit to the troubled Islamic banks through promissory demand note³.Govt literally printed the money and injected it into the ailing banks⁴. Troubled banks were not able to manage loans from other banks. I think this supply of fund through promissory demand notes was a political decision to restore depositors’ confidence. Similarly it is not clear how Nabil Group managed to get such a huge loan evading Bangladesh Bank radar. Clearly, independent decision making power of Bangladesh Bank is compromised here too.
• Bangladesh Bank recently approved application of Nagad Finance PLC to operate as another non-bank financial institution⁴. It will finance Nagad,set up in 2019 and country’s leading mobile financial services operator. Regulations prior to 2022 clearly stated that MFS operators work as subsidiary of a bank. Nagad is an exception. It is not subsidiary of any bank.Later MFS regulations 2022 allows non-bank financial institution to operate mobile financial services(see pictures). Approval of Nagad Finance hints strong political lobbying.Bangladesh Bank intervened when age limit of a managing director of a specialized bank crossed a threshold limit.But here we see a multibillion Taka company operates year after year not meeting vital criteria and regulations have been changed for its smooth operations.Political objectives here influenced the actions.
  

  MFS Regulations 2018

  

  MFS Regulations 2022

Apart from that Equity And Entrepreneurship Fund (EEF) and EEF for ICT have been misused on several occasions. Often it was found that external influence played a role in some cases.

Bangladesh Bank cannot act freely in the present context. Its exercise of sovereign decision making power has been limited in recent years as political intervention is more frequent. Despite cautious optimism and adherence to contractionary monetary policy , inflationary situation may spiral out of control if central bank kowtows before political pressure.

Notes And References

1. Monetary Policy Statement, July-December,2023,Bangladesh Bank
2. "Will MPS Attain The Goals?",Rezaul Hoque,January 20,2023.For more read at https://hoquestake.blogspot.com/2023/01/will-mps-attain-goals.html?m=1
3. "Receding Trust In Banks",Rezaul Hoque, https://hoquestake.blogspot.com,January 13,2023.For more read at https://hoquestake.blogspot.com/2023/01/receding-trust-in-banks.html?m=1
4. " Inflation Woes Remain",Rezaul Hoque,April 15,2023.https://hoquestake.blogspot.com,For more read at https://hoquestake.blogspot.com/2023/04/inflation-woes-remain.html?m=1
5. "Nagad Finance PlC Gets Bangladesh Bank Approval",bdnews24.com,May 17,2023.For more read at https://bdnews24.com/amp/story/business%2F42fo8053ep

[Update:This piece has been updated by me on June 23,2023 at 10:07, at 12:50 and at 13:12 Bangladesh Standard Time. Updates include: 10:07: references 12:50: screenshots of the Mobile Financial Services Regulations 2018 and 2022 and inclusion of phrase "...and regulations have been changed for its smooth operations.Political objectives here influenced the actions." at the end of the para highlighting Nagad Finance PLC issue 13:12: screenshot of policy rates of advanced countries and correction of "since April 2023" to "snce December 2022" in para discussing export growth and demand for Bangladeshi items]

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Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
17	Pain tchapati,Omelette	Papaye,Riz	Papaye,Riz,Gombo	---
18	Pain tchapati,Omelette	Riz,Gombo,Ruhi,Haricot vert,Épinard d'eau	Paratha,Ruhi	---
19	Pain tchapati,omelette	Riz,Ruhi,Gombo,Soupe aux lentilles	Paratha,Pomme de terre et gourde serpent	Arachide
20	Pain tchapati,Omelette	Riz,Épinard d'Eau,Ritha,Purée de graines du jacquier et crevette sec	Riz,Épinard d'Eau,Ritha,Purée de graines du jacquier et crevette sec	---
21	Pain tchapati,Gourde serpent	Riz,Ruhi,Purée de graines du jacquier et crevette sec	Paratha(fait par moi),Gourde pointue	Arachides, Lait
22	Paratha(fait par moi),Omelette	Riz,Gourde pointue,Épinard d'eau	Riz,Purée de pelure de gourde pointue,Soupe aux lentilles, Pomme de terre	Arachides
23	Pain tchapati,Omelette	Riz,Haricot vert,Purée de graines du jacquier et crevette sec	Riz,Haricot vert,Purée de graines du jacquier et crevette sec	---

Could MPS2 Contain Inflation?

First monetary policy missed the target, Next one should not be a reason for regret.

The central bank is planning to introduce another Monetary Policy Statement(MPS).As anticipated, it is going to raise again the policy rate. Earlier it had raised both the repo and reverse repo rate by 25 basis points in line with gradualism. This time too it is likely to do so ,but interest rate increase may be more than 25 basis points. In the previous MPS, inflation target was set at 7.50%. However, inflation is around 9.94% according to govt statistics. Since primary concern is checking inflation, more drastic steps are needed.

In the previous piece, I highlighted how govt is accelerating inflation.Sharing parts of it again¹:” Central bank is printing the money and lending it to the government against treasury bonds. Central bank is both the legitimate authority to print money and issue treasury bonds and it is not selling the bonds to the banks. But govt is paying the bills of development expenditures and other spending through checkable deposits, which is increasing in volume. This ultimately leads to lower currency-deposit ratio that ends up in higher money-multiplier. So government's intention to have a low money-multiplier is not working. Central bank could do so by increasing the reserve ratio of banks,which is now only 4%². Higher reserve ratio will do the trick.

However, central bank is not doing so as it could curtail the credit to private sector, which is getting less and less amid govt's increasing borrowings from the banks.For the first two quarters of the next fiscal year,it could forget about private sector credit growth. As election is near, investors will await till the next govt assumes power. Meanwhile, higher reserve ratio could lower the money-multiplier."

Bangladesh Bank quarterly tells a lot about this.Money multiplier was 4.92 at the end of FY 22. It then rose to 5.07 at the first quarter of FY23. It then slided down to 4.63. Though reserve money registered a 17% growth at the second quarter of FY23. But it was not good enough to lower the money multiplier.

Meanwhile, public sector credit growth was recorded to be around 25% at Q2 of FY23. But private sector registered only 12.89% during the same period. It is not known how far the situation will improve ahead of election. Negative growth in volume of cargo handled by Chattogram port (-4.56%), a record in the last three years after COVID,gives an aura of sluggish business environment.

This is the right time to raise the interest rate by more than 100 basis points. If everything goes well ,two quarters later inflationary situation may improve. Government is injecting money into the system, it is quite natural that the long-run interest rate will rise in response to such move. Empirical evidence is there. A free and fair election will bring back investor’s confidence and credit flow to private sector will translate into success stories. Until that happens, central bank is in a comfortable position to take some tough stance.

Notes And References

1. " High Inflation And Unjust Tax: Evils Faced By The Middle Class",Rezaul Hoque,June 08,2023,https://hoquestake.blogspot.com For more read at https://hoquestake.blogspot.com/2023/06/high-inflation-and-unjust-tax-evils.html?m=1
2. Bangladesh Bank Quarterly, vol-XX,No-2,October-December 2022

La Semaine Dernière A Mes Yeux

(10 juin --- 16 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
10	Pain tchapati,Omelette	Riz,Soupe aux lentilles, Haricot vert	Riz,Soupe aux lentilles, Haricot vert	Lait
11	Pain tchapati,Pomme de terre bhaji	Riz,Poulet,Pomme de terre bhaji,Gourde calebasse, Épinard d'eau	Riz,Poulet, Épinard d'eau	---
12	Pain tchapati,Gourde calebasse	Riz,Feuilles de tige amarante,Gombo	Riz,Gombo,Pomme de terre,Pomme de terre pakora,Soupe aux lentilles	Lait,Riz gonflé avec tchanatchur
13	Pain tchapati,Omelette	Pain tchapati,Haricot vert,Soupe aux lentilles	Paratha(fait par moi),Haricot vert	Riz gonflé avec pois chiches
14	Pain tchapati,Purée de pomme de terre	Riz,Purée de gourde épineuse,Feuilles de tige amarante,Gourde de serpent	Paratha(fait par moi),Purée de gourde épineuse	---
15	Pain tchapati,Omelette	Riz,Épinard d'eau,Gourde serpent avec pois blanc,Gourde serpent	Riz,Gourde serpent avec pois blanc	Riz gonflé
16	Paratha(fait par moi),Gourde serpent avec pois blanc	Riz,Mudskipper,Gombo	Riz,Mudskipper,Gombo	Riz gonflé

High Inflation And Unjust Tax :Evils Faced By The Middle Class

Tax oil,shop owner and block allocation, Give some rebate amid high inflation.

The lower income group is already battered by double-digit inflation (officially it is hovering around 9 point something). The problem is only compounded by the declaration of minimum tax of Taka 2000 irrespective of income level of the registered taxpayers. Monetary policy statement designed to bring the price levels down has failed to do so.

People are not optimistic that the next MPS will contain the inflation into single-digit. However, the MPS quite successfully reduced the import. Current account balance is improving. But acute dollar crisis holds back the government in settling the foreign bills and debt obligation in time.

Volatility in onion market, undocumented transaction in soybean oil market and poultry market and inflated bus fare are indicative of weak regulatory grip on the markets in general. Many ahead of the next general election may exploit the prevailing environment to finance electoral cost. Increasing incidence of undocumented transaction (money-receipt less transaction) exposes this kind of opaque business system. Undocumented economy is playing a role in pushing up the price levels. Earlier I had penned a piece titled "Inflation Woes Remain" highlighting how the injection of money derailing the inflation -controlling measures¹.

Govt has to take the share of the responsibility of driving up the price levels. Central bank is printing the money and lending it to the government against treasury bonds. Central bank is both the legitimate authority to print money and issue treasury bonds and it is not selling the bonds to the banks. But govt is paying the bills of development expenditures and other spending through checkable deposits,which is increasing in volume. This ultimately leads to lower currency-deposit ratio that ends up in higher money-multiplier. So government's intention to have a low money-multiplier is not working. Central bank could do so by increasing the reserve ratio of banks,which is now only 4%². Higher reserve ratio will do the trick.

However, central bank is not doing so as it could curtail the credit to private sector, which is getting less and less amid govt's increasing borrowings from the banks.For the first two quarters of the next fiscal year,it could forget about private sector credit growth. As election is near, investors will await till the next govt assumes power. Meanwhile, higher reserve ratio could lower the money-multiplier.

The minimum tax complicated the tax burden of the lower income group. Instead of giving the group a rebate,govt decides to impose a minimum tax of Taka 2000.Around 800000 TIN holders fall into this category and govt plans to collect around Taka 160 crores (according to CPD the amount is between Taka 300 and 400 crores) through such tax. The tax policy should be designed to hold the unaccountable accountable. By targeting the transport business, shops that have multiple owners, NBR could achieve more. Those who furnish money receipt and keep a record of transaction should pay less VAT and tax than those who don’t. Poor and ordinary people already contribute to the economy by paying VAT through their purchase of talk time and data,soap,cigarette and other commodities. NBR could impose duties on oil and earn huge revenues. It could float special bond for the street vendors and curtailing the share of the extortion emanates from such unregulated businesses. Every year both the ADP and nondevelopmental expenditures have some block allocation (total Taka 5000 crores; see the table for details)³. If NBR imposes 20% tax on their use then unnecessary use of them will be discouraged.Minimum tax should be a voluntary one or should be kept at such a low level that does not become a burden. Otherwise, such tax will cost NBR more by losing its existing revenue as more and more in the vicinity of that tax range will opt for Taka 2000 tax. And many aspirant taxpayers will prefer to stay away from the registration process. In times of inflation,govt could help people by introducing ways that ultimately work as some kind of rebate. Saving some money is like giving a cash incentive. A 180-degree turn on Taka 2000 tax could be that incentive the middle class is longing for.

Notes And References

1. "Inflation Woes Remain",Rezaul Hoque,https://hoquestake.blogspot.com,April 15,2023.For more read at https://hoquestake.blogspot.com/2023/04/inflation-woes-remain.html?m=1
2. Bangladesh Bank
3. Bangladesh Economic Review 2021-22

   Block Allocation On ADP and Nondevelopment Expenditures(Taka in crore)

   	2015-2016	2016-2017	2017-2018	2018-2019	2019-2020
   ADP	2219.75	2323.00	2404.22	2465.99	2468.35
   Revenue	279	282	530	2139	1617

[Update: This piece is updated by me on June 14,2023 at 15:41 Bangladesh Standard Time.Update includes correcting the references(wrongly attributed earlier) and inclusion of block allocation table.]

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Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
03	Pain tchapati,Pomme de terre bhaji	Riz,Gombo,Feuilles de jutte,Pama Croaker avec gourde épineuse, Haricot vert,Pomme de terre bhaji	Riz,Haricot vert,Pama croaker avec gourde épineuse	---
04	Pain tchapati,Omelette	Riz,Ruhi,Haricot vert,Gourde calebasse	Riz,Ruhi,Gourde calebasse	Lait
05	Pain tchapati,Ruhi	Riz,Poulet,Haricot vert et papaye, Purée de pomme de terre,Luffa	Riz,Poulet,Haricot vert et papaye, Purée de pomme de terre,Luffa	Lait
06	Pain tchapati,Haricot vert et papaye	Riz,Gourde calebasse, Épinard d'eau	Riz,Gourde calebasse, Épinard d'eau	Lait,Jus de canne à sucre
07	Pain tchapati,Omelet	Riz,Eau de tamarin, Haricot vert et papaye	---	Lait
08	Pain tchapati,Lait,Omelette	Riz,Gombo,Haricot vert,Gourde serpent avec pomme de terre	Riz,Gourde serpent avec pomme de terre,Soupe aux lentilles	Riz gonflé
09	Pain tchapati,Pois blans avec pomme de terre et œuf	Riz,Épinard d'eau,Gourde serpent avec pomme de terre	Riz,Épinard d'eau,Gourde serpent avec pomme de terre	Riz gonflé dans pois blanc avec pomme de terre

People Pay For Govt Mess

A minimum tax for threshold income or less! Why should people pay for your mess?

Govt made it compulsory to pay a minimum tax of Taka 2000 for every TIN holder. This is literally forcing the people to pay for its economic mismanagement. Back in 2016,I wrote this piece titled “Get Your Hands Off My Pocket”¹. Sharing it again:

”””

Small and medium entrepreneurs, comprising of mostly Dhaka’s shop owners, staged a Dhaka-wide complete shutdown of their shops as a token of protest against the imposition of additional VAT that they deem unjust. VAT threshold for shop owners was raised to Tk 28000, two times higher than what it was a year ago. Recently Finance Minister even wished to impose tax on the school-goers.

We Bengalis are emotional. Whenever working Bangladeshi’s salary becomes taxable, he/she spares no opportunity to become a new taxpayer. Every year people throng to income tax fair. Just this year around 36,853 new taxpayers get themselves registered in the tax fair. Moreover, 195,000 taxpayers paid around Tk 21.30 billion as income taxes. Apparently, a feel-good factor comes into play on such occasion. However, have we ever thought that our money is ending up in good hands?

Bangladesh’s tax-GDP ratio is 8.6% during the period of 2006-2008. During the same period on average $5 billion laundered abroad every year from Bangladesh. According to Global Financial Integrity report, around $9 billion capital flight took place in 2013. Guess who did that. Bad debts are piling up in banks due to flawed decisions taken by partisan management boards.

Do we see an improvement in law & order situation? Do we get better health services? Are our hospitals well equipped? Do we have quality roads, bridges and public office buildings? Is there an increase in education subsidy? Are our infrastructures good enough to attract domestic and foreign investment? Did we invest enough in political and constitutional institutions to ensure checks and balances and to protect our democratic rights? Does the private sector reap as much benefit as anticipated from the implementation of big infrastructure projects?

In terms of economic management, this government is guilty of dereliction of duty. Public confidence on government shattered as one after another financial scam hit the country. The last one, alleged hacking of Bangladesh Bank’s foreign reserve fund, put the Finance Minister (FM) and senior party leaders at odds with the Central bank’s governor and ended up in the resignation of the latter. Rampant corruption and plundering of public and specialized banks only filled party-men’s pocket. Consequently, people’s confidence to ruling party dwindled away to nothing.

But the FM’s comedy show continues. Recently at an event on remittance, FM expressed his desires to borrow money from central bank’s forex reserve to finance mega projects. The remark causes outpouring of concerns among some professionals as FM, to whom public bank’s stolen Tk8 billion is just “peanut”, took financial scam lightly.

To me, the idea of borrowing from forex reserve sounds like a blatant mockery in the wake of dilapidated condition of financial institutions. And only an FM who never took moral responsibility of any scam can make such heartless and senseless remark about Spartan people’s hard-earned money.

Does such a bad manager of economy have right to impose tax on us? Though the present government technically fit to run the country, a good number of voters did not vote in 2014 general election, boycotted by BNP alliance. In that light, it has lost moral high ground to implement any of its policies. Flawed political course of action by BNP alliance gave the present government an excuse to swell the number of political prisoners in overcrowded prisons, further undermining its organizational capacity. So, the government took an authoritarian stance and pursued anti-public economic policies with no hold barred. Utility fees were raised on several occasions while the oil price was all time low. Without any opinion poll, one can draw a bottom line that people were not happy with such decisions.

Ignoring parliament and without taking prior consent of people’s representatives this VAT raising move only increases resentment. Since the government lacks popular public support, individuals who are not on the same page can say: “Hey you did not care about my opinion. Why should I pay taxes at your whims?”

As soon as public resentment reaches to a crescendo, it may turn into a government changing movement.

Introduction of Magna Carta can be aptly cited here as an example. The elites under the king forced him to revoke some of his privileges and to accept Magna Carta that laid down that the King must consult them before raising taxes or imposing new ones.

In Bangladesh, we already witnessed few spontaneous protests by different professional groups despite effete state of the main opposition. Primary school teachers took to streets and had skirmishes with Police over their grievances. Public university teachers waged an abortive movement over pay hike. And private university students quite successfully made the government rescind its decision of imposing VAT on university fees.

Protests staged by professional groups should ring alarm bell all across the party hierarchy. People simply do not want to see their views and opinions getting crushed under authoritarian boots. They want to see govt policies reflect their wishes. Not just being guided by whimsical policies that they do not ask for. In functional democracies, rival political parties compete for people’s trust and formulate policies based on people’s desire.

Unfortunately, bitter rivalries between two leading parties hampered the proper functioning of democracy. We are left with no choice but to accept the status quo: a parliament where half of the MPs are uncontested.

Imposition or raising VAT and tax is crucial matter and demands consent of people’s representatives. Just slapping them on people like medieval rulers is like trampling on people’s feeling and wishes.

Until democracy gets back on track and a parliament is formed through a free and fair election, government should refrain from emptying people’s pocket by levying unjust and unreasonable VAT and duties. As long as government does not change its decision, people have every right to say:”Get your hands off my pocket. Why should I pay for your mismanagement?”

"""

Notes And References

1. ”Get Your Hands Off My Pocket”,Rezaul Hoque,November 11,2016. https://rezaulhoque.WordPress.com. For more read at https://rezaulhoque.wordpress.com/2016/11/11/get-your-hands-off-my-pocket/
   Later appeared on Dhaka Tribune as " Where Is My Tax Money Going?" on November 19,2016. For more read at https://archive.dhakatribune.com/opinion/op-ed/2016/11/19/tax-money-going