La Semaine Dernière A Mes Yeux

(30 septembre --- 06 octobre)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
30	Pain tchapati,Pois blanc	Riz,Soupe aux lentilles,Pois blanc,Haricot vert	Riz,Pois blanc,Soupe aux lentilles	---
01	Pain tchapati,Omelette	Riz,Épinard malabar,Soupe aux harcots mungo	Riz,Riz gonflé,Soupe aux haricots mungo,Épinard malabar	Lait,Riz gonflé
02	Pain tchapati,Soupe aux haricots mungo	Riz,Papaye-Banane verte-Carotte,Poisson bombili	Riz,Papaye-Banane verte-Carotte,Poisson bombili	Moglaï paratha
03	Pain tchapati,Omelette, Soupe aux haricots mungo	Riz,Papaye-Banane verte-Carotte,Purée de pomme de terre,Soupe aux lentilles	Riz, Soupe aux haricots mungo	---
04	Pain tchapati,Omelette	Riz,Ompok pabda poisson,Haricot vert	Riz,Ompok pabda poisson,Haricot vert	---
05	Pain tchapati,Paratha,Omelette	Riz,Ompok pabda,Gombo	Riz,Ompok pabda,Gombo,Purée de snakehead poisson	La goyave,Lait
06	---	Riz,Poulet avec pomme de terre, Soupe aux lentilles,Papaye-Citrouilles	Riz,Poulet avec pomme de terre	Goyave,Lait

Is Bangladesh Bank Really Independent?(Republished)

Meddling in decision making Yields result no one seeking.

[Republished below a piece I wrote back in June 22,2023.]

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 AM, at 12:50 PM and at 13:12 PM 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
]

La Semaine Dernière A Mes Yeux

(22 septembre --- 29 septembre)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
23	Pain tchapati,Omelette	Riz,Ruhi avec pomme de terre,Légumes,Lait	Pain tchapati,Ruhi avec pomme de terre	Riz gonflé
24	Pain tchapati,Omelette	Riz,Ruhi,Soupe aux lentilles,Papaye-Haricot vert	Pain tchapati,Ruhi	Riz gonflé
25	Riz avec l'œuf,Papaye-Haricot vert,Tête de Ruhi	Riz,Purée de pomme de terre,Soupe aux lentilles	Lait	Riz gonflé
26	Pain tchapati,Omelet	Riz,Feuilles de gourde escarlotte er Épinard d'eau,Petit taro chinois avec ruban sec	Riz gonflé avec soupe aux pois blanc	---
27	Riz,Soupe aux pois blanc,Gombo	Riz, Ruhi,Gourde serpent	Riz,Ruhi	Lait,Riz gonflé
28	Pain tchapati,Omelet	Riz,Purée de pomme de terre,Soupe aux lentilles	Riz,Gourde serpent,Soupe aux lentilles	Lait,Riz gonflé
29	Pain tchapati,Gourde serpent	Riz,Paradise threadfin poisson,Haricot vert,Soupe aux lentilles	Riz,Soupe aux lentilles	Riz gonflé

No Stability In Kitchen Market

Kitchen market remains volatile, No respite for a while. Big farm and cooperative Could give a sigh of relief.

In a bid to stabilize the egg market, govt decided to import 40 million pieces of egg from neighboring India. The amount is equivalent to one-day worth of egg demand. Despite a slight reduction in price at the wholesale level for purchase of larger quantities, there is hardly any change at the retail level. But the policy makers are optimistic that the decision would somehow stabilize the egg market. I recently came across a news report that claimed chick prices increased by 10 taka following the decision of importing Indian egg. Now this will definitely have impact at the retail level when chicken will reach to consumption-level stage unless feed prices witness a dramatic cut.

Hatchers and breeders keep blaming the ongoing war and mercurial nature of taka against the dollar.

Not only the poultry market, potato prices show unprecedented level of volatility that ordinary people never anticipated. Being one of the cheapest vegetables (being sold at taka 20/KG three months ago),sky rocketing price of potato(at one point it reached taka 60/KG) led the govt to intervene. Govt fixed the price at taka 27/KG for cold storage and taka 35/KG for the retail sale. However, the decision has yet to be translated at the grass root level. Some cold storages even stopped selling potato at the set prices and asked govt to review its price.

In recent months, both Japan and Russia have shown keen interest to purchase Bangladeshi potatoes. It may play some role in prompting some quarter to hoard potatoes. National election and local govt election after the national election also casts shadow over the kitchen market. As less or no documentation required in kitchen market, it has become a mean to bleach opaque capital. It is worth to mention that pisciculture is one of the popular sources of income mentioned by candidates aspire to run for MP and local govt election. It is highly likely that some quarter may exploit the kitchen market to finance electoral campaigns. Otherwise, volatility in prices of too many items is highly unusual at this time of the year. In international market,prices of major commodities are coming down.

I think government should introduce corporate bond here like India to make electoral contributions to public representatives. Though such bond is criticized by press and others for being a source of money laundering, it could at least keep at bay opaque capital from entering the kitchen market. In this mechanism, corporate groups purchase bonds from the central bank, which never asks origin of the money. Later corporate groups donate the bonds to parties/candidates aspire to run for election. They deposit the bonds to central bank and encash it.

Another way is to introduce documentation in kitchen market and to ask origin of money invested in the business.

Government has some role to play here. As I have argued earlier, government could set up hatcheries, feed mill and cold storage across the country to furnish chicks,feed and kitchen items at tolerable prices, curbing oligopolistic power of the farms. If government can intervene in telecommunications market,it can do the same here. Encouraging agricultural cooperatives like MilkVita to increase their presence in cities like Dhaka also make redundant the middlemen. Unlike middlemen, govt could track cooperative and big farm and implement any policy change.

La Semaine Dernière A Mes Yeux

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
16	Pain tchapati,Omelette	Riz,Gobie charmante,Épinard d'eau,Gourd serpent	Riz gonflé,Gourd serpent,Lait	---
17	Pain tchapati,Gourd charmant	Riz,Purée de haricot vert,Dried Ruban with bulbous root of arum	Pain tchapati,Milk,Riz gonflé,Bulbous root of arum	---
18	Pain tchapati,Omelette	Riz,Purée de pomme de terre,Petit poisson,Pois blancs	---	---
19	Pain tchapati,Omelette	Riz,Ruhi,Gourde serpent,Haricot vert,Lait	---	Riz gonflé
20	Pain tchapati,Omelette	Riz,Ruhi,Soupe aux lentilles,Purée de poisson Tête de serpent tachtée	---	Riz gonflé
21	Pain tchapati,Poached egg	Rice,Lentil soup,Ruhi,Mashed potato	Riz gonflé,Mashed potato,Lentil soup	---
22	Pain tchapati,Omelette, Haricot vert	Riz,Ruhi with potato,Haricot vert	Riz gonflé,Ruhi with potato	Lait

Is MPS Working?

Big gap in exchange rate Could cost the economy great. Export earnings require new definition To stem sources of corruption.

State minister of planning recently told press people that inflation would fall from November. However, Monetary Policy Statement(MPS) miserably failed to contain the inflation and there is hardly any sign that it will be able to do so in near future.

According to official statistics, food inflation is around 12%. But unofficially it is around 15%.Despite prices of major commodities are coming down across the globe, Bangladeshi consumers are yet to experience the downward trend in price levels.

On the other hand, poor regulatory framework deteriorates the situation by allowing profiteers to operate without any checks in the market. Consumers’ ability to spend and save has been weakened to a great extent in this situation.

MPS commits to a unitary exchange rate. However,difference between Bangladesh Bank(BB) rate and the market rate is still more than 5 taka.In addition, govt continues to give taka 2.5 per USD for inward remittances. Please note this incentive plus the BB rate is still far below the unofficial market rate. So remitters think they will be better off using the unofficial channel to send their money back home. However, profiteers' foul play could not be ruled out. During the Bakri Eid festival, a record amount of remittances come to Bangladesh. Many banks reported that. However, this Bakri Eid witnessed fewer animal sacrifices this year as cattle prices were beyond many people’s reach. Amount of Haseel(fee collected from sold animal by the makeshift market authority) was also lower. That means households did not spend all the money sent by the dear ones from abroad. They may be lying in the banks. And govt also paid cash incentives to those remittances. Are those bank accounts belong to true individuals? Trouble ridden banks have limited scope for raising their revenue. Opportunistic motive may play a role here to grab the benefits of cash incentives for remitters. Similarly, we have noticed exporters do not feel encouraged to bring the export proceeds at home. The result is huge differences between the stat produced EPB and that by Bangladesh Bank. But they enjoyed special benefits and incentives while processing the export orders. True export earnings should be the earnings brought to home. And incentives should only be given to this amount.

We have already witnessed that USA surpassed UAE and other countries and became one of the top three remittance sources. US visa restrictions facilitated the transfers. Experts and press speculated that certain quarters took advantage of the discrepancy between the official and market rates and made a fortune out of this.

I think we need to review the way we calculate the export earnings. Utility bill paid,freight charges paid,taxes paid ,amount of cargo carried,wages paid etc should be included in calculating the true export earnings. It is easy to report a staggering amount of export earnings. But when one delves into deeper ,it is often found that taxes paid,cargo carried in a given year,wages cleared,electricity bill paid and vendor bill cleared are not reflective of the true annual export. Money laundering is going on without engaging in any economic activity. The point is misappropriation of cash incentives in Bangladesh is very easy as the monitoring and regulatory mechanism is very weak.

It is not right to give cash incentives to remitters.And further depreciation of taka and increasing the policy rate further will be more appropriate. Sri Lanka is a good example.In October 2022,inflation rate was 70%. In January this year,it was 50%. In July ,Sri Lanka managed to bring down the inflation to 6%.

Meanwhile, in January 2023,interest rate was 15.50%. And in July,it was 11%. Inward remittances registered a 76% growth. Sri Lankan rupee is also appreciated against the USD.

Sri Lanka Inflation In The Last 12 Months
Image Credit: www.tradingeconomics.com

Sri Lanka Interest Rate In The Last 12 Months
Image Credit: www.tradingeconomics.com

USD-Sri Lanka Rupee Rate In The Last 6 Months
Image Credit: www.exchangerates.org.uk

Unfortunately, in Bangladesh inflation is still higher than interest rate. In the previous piece,I argued frequent change in policy rate in two quarters instead of just one,which is being pursued by the central bank. MPS is failing to attain its goal as crucial course correction is not reflected.

La Semaine Dernière A Mes Yeux

(09 septembre --- 15 septembre)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
09	Pain tchapati,Omelette, Citrouilles,Pomme de terre	Riz,Gobie charmante,Gourde serpent	Riz gonflé,Petit taro chinois	---
10	Pain tchapati,Gourde serpent	Riz,Gobie charmante,Tête de Ruhi dans soupe aux haricots mungo	Pain tchapati,Tête de Ruhi dans soupe aux haricots mungo	---
11	Pain tchapati,Omelette	Riz,Guntea Loach poisson,Gourde blanche	Riz gonflé,Gourde blanche	---
12	Pain tchapati,Papaye-Pomme de terre	Riz,Ruhi,Haricot vert	Pain tchapati,Ruhi,Haricot vert,Lait	Paratha,Papaye-Pomme de terre
13	Pain tchapati,Papaye-Pomme de terre,Lait	Riz,Petit taro chinois,Gombo,Ruhi	Riz gonflé,Petit taro chinois	---
14	Pain tchapati,Omelette	Riz,Papaye-Haricot vert,Poisson Bata labéo avec pomme de terre	---	---
15	Pain tchapati,Omelette	Riz,Épinard d'eau,Poisson Bata labéo avec pomme de terre,Concombre	Riz gonflé,Concombre	Lait,Riz gonflé

Could Bangladesh Get The Second Credit Pack?

Forex reserve falling short of target Next credit pack may be hard to get. Inflation dominates over interest rate, Delaying investment’s starting date.

Bangladesh has started negotiations with the IMF for the second instalment of its $4.75 billion credit package. One of the criteria set by the IMF is to keep reserve at $23 billion by September. However, reserve is somewhere around $20 billion after clearing the bill of Asian Clearing Union, a settlement mechanism by few Asian countries to clear the import bill of member countries in every two months. I have recently come across a social media news clip that claims Indian state credit is likely on the table and it will improve the forex reserve situation. The veracity of which is still unknown.

Growing concern now is the falling growth of remittances. A large part of the blame is attributed to the artificially pegged value of taka; market rate is still 6/7 taka more. As I mentioned earlier, govt sticks to this policy because any depreciation would mean increase in expenditure of the ongoing infrastructure and development projects and increase in cost of transferring money abroad. Depreciation of taka,approaching the true market value,will work as incentive for foreign workers to send more money. But that is not happening in spite of repeated urge from various quarters.

Meanwhile, interest rates have been raised and lending caps have been removed. Yet nominal interest rate is still lower than the inflation rate. Food inflation is more than 15%. For some kitchen items ,it is even higher than 40%. Middle class and lower income group has lowered their protein consumption. In this backdrop, people are net loser as real interest rate is still negative.

On the other hand, rising inflation,artificial pegging of taka and negative real interest rate cast shadow over profitability of the firms and have remained source of unexpected collusion between businessmen and authority. I watched a news report where one businessmen shared a candid account on how his bitter interaction with the customs led him to raise the price of the commodity he imported earlier. Depreciation of taka and delay by the customs cost him extra bucks that he intended to recuperate by raising the prices.

Moreover, political impasse also casts shadow over investment projects. Investors anticipates that nominal interest rate will rise further as inflation is still higher than interest rate and taka will depreciate further. Any investment project in this scenario will raise their cost. So they will wait till a favorable time (when interest rate is significantly high that means it may fall in the future, commodity prices are coming down and taka is stable ) to go ahead with their investment projects. This is perhaps the right time to raise the interest rate further, but govt is reluctant to take such decision ahead of election.If the decision were taken then a positive picture may emerge in January-March quarter. I have already told earlier whichever political creed form the next government tough time lies ahead for people as utility bill will rise further, further imposition of supplementary duty to fill the revenue shortfall, further depreciation and further rise in policy rate.[Central bank may raise the policy rate further through the MPS. To see its impact we have to wait till April-June quarter.Raising the policy rate in every six months under gradualism should be changed.Policy rate change should be more frequent,every two months is even better.It means in six months we will have three changes in the policy rate.This will have more quick impact at the ground.*]

A lot of uncertainty hangs in the air about the clearing of second tranche of IMF credit. I assume govt may manage some credit from foreign banks at special concessional rate. But will that be enough to meet the reserve target set by IMF is the matter under scanner.

[*Update: This piece has been updated by me on September 09,2023 at 8:03 AM Bangladesh Standard Time.Update includes suggestion of frequent policy rate change.]

La Semaine Dernière A Mes Yeux

(02 septembre --- 08 septembre)

Cliquez pour voir/cacher

Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
02	Pain tchapati,Omelette, Pomélo	Riz,Ruhi,Papaye-Banane verte-Haricot vert	Riz,Ruhi,Papaye-Banane verte-Haricot vert	---
03	Pain tchapati,Papaye-Banane verte-Haricot vert	Riz,Puntio barbe poisson avec pomme de terre,Haricot vert	Riz,Puntio barbe poisson	---
04	Pain tchapati,Omelette	Riz,Puntio barbe avec pomme de terre,Haricot vert	Riz,Pomme de terre,Okra	---
05	Pain tchapati,Omelette	Riz,Courge amère	Riz,Pomme de terre,Gombo,Soupe aux lentilles	Pury(friture fait avec farine et pomme de terre),Riz gonflé
06	Pain tchapati,Pois blanc avec Papaye	Riz,Papaye-Pois blanc,Épinard malabar	Riz,Épinard malabar,Papaye-pois blanc	Riz gonflé
07	Pain tchapati,Omelette	Riz,Poisson Bombili,Ruhi,Purée de pomme de terre	---	Riz gonflé
08	Pain tchapati,Omelette	Riz,Poisson Bombili,Épinard malabar,Ruhi	---	Riz gonflé

Universal Pension Scheme: Some Concerns

Pension scheme starts its journey Participants are yet to turn up in many. Past experience with savings certificate May hamper pension fund's target.

Universal Pension Scheme has started to get lukewarm response. So far around 8000 people registered for the scheme. The scheme has four categories: Probash(aimed at NRB and migrant workers),Progoti (aimed at private sector employees), Somota(aimed at underprivileged people who are not subscribed to any of the social security programs) and Surokkha.

Participant has to contribute for at least 10 years to avail the pension benefit. Though the program has been launched under the banner of “Social Protection Scheme”,cash-strapped govt's desperate search for financing the budget deficit has also come under scanner. Back in January this year in a piece titled “Universal Pension Bill: Could It Really Take Off?” and in February in another piece titled “Premature Social Security Program” I argued why the scheme is premature. Sharing parts of it aagain:

But the program is introduced at a moment when government is facing liquidity crisis. In addition ,budget deficit keeps growing. In 2020,budget deficit was 4.9% of GDP. In 2022,it reached 6.2%. To finance deficit govt borrowed both from internal and external sources. Government borrowing from banks was 2.25% in 2022. Meanwhile, our debt to GDP ratio was around 12% in 2022¹.So in the election year,universal pension program aims to draw voter attention and to bring vital money into the banking system. In developed countries, pension funds are huge. As such funds lie in the banking system for a prolonged time, govt is hoping to use the fund to finance development projects by borrowing from the banks. One member of the Parliament quite rightly laid bare govt intention,saying that people would not be fooled by trusting again this government who emptied the banks. As the deficits get widened,our output will be lower. Our major markets across the globe are in recession. So savings will be lower in the long run. Thus government’s plan to raise savings through pension fund may not go as smoothly as it conceived at the initial stage.

Household’s ability to spend will deteriorate further in the wake of inflation, loss of income and further fall of Taka in the future. So, how many of the people outside institutional job market will participate in this program is a matter of serious scrutiny.²

People’s experience with national savings certificate is not good. Inflation made them net loser at the end of the day. Sloppy management of the economy is also to blame. So pension scheme may not create the enthusiasm among people.

It is interesting that govt has not fixed yet the amount it will pay to the pensioners but fixed the contribution amount. It somehow calls into question cash-strapped government’s intention.

Earlier govt planned to float Bangla Bond/sovereign bond in the London Stock Exchange.Corona threw cold water into it. Govt earlier also instructed quasi-state and independent organizations to disclose funds at their disposal.Interestingly, many quasi-state organizations like BPC withdrew their funds from some problem ridden banks, weakening further portfolios of the banks. This indicates the level of confidence people and organizations have on govt.

Govt is pretty determined to emulate the West except its accountability and moral standard . Govt earlier had changed Bank ownership act(later fixed to unlock IMF credit) citing example of the USA where family members own a bank and many banks with one brunch. But in the USA fraud like Bernie Madoff spends rest of his life in jail. This example has yet to be emulated here. ³

Govt is mulling to invest the money initially into treasury bill and bond. Apart from that a fund management committee will explore ways for secure investment⁴. However, as mentioned earlier, people’s experience with savings certificate is not good. Govt changes its condition at its whim. Moreover, lack of accountability promotes misuse of resources. I have been using teletalk,a state-backed cellphone operator, for a long time as it is cheap compared to other operators. I have fallen victim of uncarried data and lost bonus points that I purchased through my hard-earned money. I lodged complaints to respective authority with no avail. If this lost and uncarried data fell to wrong hand/were misused ,then this was a tremendous loss to state resources and might be used to detrimental activities. Recently, absence of regulatory grip on volatile consumer market and series of scams in public infrastructure projects expose that public money is not being used wisely and appropriately. ⁴

Pension scheme is indeed a good and laudable move. But it is still a premature concept in the context of Bangladesh where governance is in tatters and ruling regime seldom thinks about welfare of the depositors. When a regime is pretty sure about its assumption of and exit from power, it bothers little about ordinary depositors’ interest and at the end of the day the country and economy pay the the cost.³

Notes And References

1. Bangladesh Bank
2. “Universal Pension Bill: Could It Really Take Off?”,Rezaul Hoque,January 27,2023.https://hoquestake.blogspot.com.For more read at https://hoquestake.blogspot.com/2023/01/universal-pension-bill-could-it-really.html?m=1
3. “Premature Social Security Program”,Rezaul Hoque,February 27,2023. https://hoquestake.blogspot.com.For more read at https://hoquestake.blogspot.com/2023/02/premature-pension-scheme.html?m=1
4. ”Biniyog Hobey Treasury Bill Ebong Bondey(Investment In Treasury Bill And Bond)”,Daily Prothom Alo(P-11),August 30,2023.