La Semaine Dernière A Mes Yeux

( 21 juin --- 27 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
21	Pain,Œuf,Papaye	Riz,Ruhi,Gombo,Soupe aux lentilles	Pain,Lait	---
22	Riz,Soupe aux lentilles,Ruhi,Œuf	Riz,Ruhi,Purée de papaye,Soupe aux lentilles	Pain,Purée de papaye	Mangue
23	Riz,Œuf,Papaye,Soupe aux lentilles	Riz,Épinard malabar,Gourd serpent,Soupe aux lentilles	Riz gonflé,Pois chiches,Tchanatchur	Mangue
24	Pain,Gourd serpent,Œuf	Riz,Brinjal,Soupe aux haricots mungo	Riz gonflé,Pois chiches	Mangue,Jaquier
23	Riz,Œuf,Papaye,Soupe aux lentilles	Riz,Épinard malabar,Gourd serpent,Soupe aux lentilles	Riz gonflé,Pois chiches,Tchanatchur	Mangue
24	Pain,Gourd serpent,Œuf	Riz,Brinjal,Soupe aux haricots mungo	Riz gonflé,Pois chiches	Mangue,Jaquier
25	Pain,Œuf,Soupe aux Haricots mungo	Riz,Brinjal,Œuf	Riz gonflé,Soupe aux haricots mungo,Tête de Ruhi	---
26	Pain,Pomme de terre bhaji,Œuf	Riz,Petit taro chinois,Épinard d'eau	Riz gonflé,Lait	Mangue
27	Pain,Papaye bhaji,Mangue	Riz,Petit taro chinois,Poulet	---	---

Mob Justice & Seasonal Bureaucracy

Mob justice spares none, Bi-nationals make bureaucracy a subject of fun.

Police arrested two former chief election commissioners after a political party lodged case against them for holding rigged elections. What is troubling is the condemnable attack against one of them. It reminded us of the fate met by former high officials in China during the cultural revolution. It has been a little less than a year since the fall of Sheikh Hasina regime. Unfortunately, we have not seen yet any improvement of law and order.

In Bangladesh, constitutional bodies are toothless tiger and commissioners are mere office holders. They can school you,lecture you and advice you to do something or not to do something. Yes they are in charge of holding elections, but EC cannot hold alone any rigged or unfair election. Other state institutions were also involved. If EC and its people were involved in corruption ,then they should be tried accordingly. This disgust display of mob justice maligns the image of Bangladesh.

It would not be mere allegations if I say that former chief election commissioners fell victims to political vendetta. Mr Habibul Awal ,immediate past election commissioner, in one of his article questioned the legitimacy of this govt and suggested some constitutional actions(See"Fight For Legitimacy", August 29,2024,published here). That did not go well along the power corridor. So far the treatment of former bureaucrats is worse than the treatment they faced during the time of former regime.

What is interesting main protagonists of rigged elections were allowed to flee abroad but those staying back face all kinds of maltreatment before proper trial.

There has been no denying that the governance situation we are enduring now is the result of bureaucracy led by former bureaucrats who joined the service during the '80s, decade of dictatorship. Just check the background of our former runaway police chief,army chief, central bank governor and cabinet secretary. Their seniors were more prudent and exercised duties cautiously. They did not end up their career facing such an embarrassing situation.

There is a full blown civil war in Myanmar, yet very few Myanmar officials and rebels took refuge in the West. Bangladesh's situation is a lot better, yet these runaway former officials took refuge abroad and do not have the guts to face the press. There are many bi-nationals working in the bureaucracy. For the last two decades, there has been a tendency to go abroad during unfavorable regime and return to office during the favorable regime. By then the ordinary people face full brunt of their misgovernance. Very few face the legal and other consequences for their wrongdoings and corruption.

We are no nascent state,yet we are not matured enough to take prudent decisions. I think if we hire more foreign nationals (black/white) for key positions in the bureaucracy, central bank and other areas, there will be a great leap forward in the governance. New ideas, management and work environment will give the country vital transformation we badly need. The bureaucracy has become a "tamasha" (mockery) for this coming and going out of these bi-nationals at measured intervals.Things have not improved ,rather turned bad. Why do we not recruit foreign nationals (black/white) from abroad to make things better and reduce the incidence of proxy war?

Govt has so far failed to restore public order. There is hardly any qualitative change in law & order situation. Harassment of former election commissioner is an eye opener. Bi-nationals in the govt is not an issue,yet they seldom face consequences for their actions. Qualitative transformation in the bureaucracy requires recruitment of more foreign nationals (black/white) at advisory and technical level. It yielded good results for other countries, why it should not work for Bangladesh?

[Update: this piece has been updated by me at 14:30 Bangladesh Standard Time on June 26,2025.Update includes reference to the details of Kazi Habibul Awal's suggestion.]

La Semaine Dernière A Mes Yeux

( 14 juin --- 20 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
14	Pain,Œuf,Pomme de terre bhaji	Riz,Brinjal,Épinard malabar,Soupe aux lentilles	Riz gonflé	---
15	Riz,Haricot vert,Œuf	Riz,Graine du jaquier et gourde épineuse et brinjal,Soupe aux lentilles	Riz gonflé	---
16	Pain ,Œuf	Riz,Pomme de terre,Petit poisson	Riz gonflé,Pois chiches	---
17	Pain,Œuf	Riz,Petit poisson,Tête de Ruhi dans soupe aux haricots mungo	Riz gonflé,Pois chiches	---
18	Pain ,Œuf,Pomme de terre bhaji	Riz,Purée de graine de jaquier avec sec crevette,Soupe aux lentilles	Riz gonflé,Lait	---
19	Riz,Haricot vert,Œuf	Riz,Latya,Soupe aux lentilles	Riz,Latya poisson,Haricot vert,Purée de pomme de terre,Soupe aux lentilles/td>	---
20	Pain ,Œuf,Mangue	Riz,Gobie charmante,Graine du jaquier avec gourde épineuse	Riz,Gobie charmante,Papaye	---

Pension Scheme Says It All

Less response to national pension scheme Hints governance situation is poor and grim.

It has been more than two years since the govt introduced the Universal Pension Scheme, being the 5th country in the subcontinent. However, the former govt did it as a desperate measure to get funds from the people. I also questioned such measure as in this part of the world govt lacks clarity in spending public money and widespread abuse of public fund management is pretty common here (see " Do We Need Social Security Program? " June 16,2022, and "Universal Pension Bill: Could It Really Take Off?" January 27,2023). Less spontaneous response to pension scheme says how people greeted it. Only 300000+ people subscribed to it, generating a total of Tk 1.57 billion.

The scheme is based on three acts: the Pension Fund Management Act 2023, the Pension Fund Regulations Act 2024 and the Pension Fund Investment Act 2024. The Pension Fund Investment Act says that the fund cannot be invested abroad. It should be invested in treasury bonds, securities with AAA rating, any public project undertaken by the govt ,FDR and mutual funds. Apart from govt securities, investment in other assets should not cross 25% of the fund. For govt securities, there is no limit on investment.

This investment in public projects is a spirit killer. Here cost and benefit analysis of public projects are done to convince the policy makers and public and to hide the true cost of the projects, resulting in more taxes and cut in benefits. Why should one be interested in contributing to projects that will literally generate little or no returns?

Only secured assets for investments are treasury bonds and mutual funds. The scope for growing the Pension Fund is limited. Like provident fund of a private company, bigger and larger pension fund means more people can take loans from the fund to cater to their need for building a home,augmenting income, financing higher education of children, financing treatment etc.

Pension Fund will grow more if it is allowed to invest abroad in the commodity markets in London,Dubai and Singapore. At the same time it should be allowed to finance investment projects of the NRBs. For instance, if migrant Bangladeshi or NRBs get credit to open a restaurant, a barber shop, purchase a taxi or start a grocery , it would augment his income and become a genuine source of returns for the pension fund.

By the same token, at home,if we have two /three govt-backed home-credit institutions who will finance real estate projects undertaken by companies floated through public private partnership, then lower income group would be able to purchase apartments at affordable [price]. And they will become a great source of investment for the pension fund.

Not only that if SMEs and startups are financed through SME bonds and startup bonds then pension fund may get other areas to invest.

Quintessential is who is managing the fund. If we hire investment banker, hedge fund manager from abroad then these foreign nationals will take good care of it. Prior to that we need to fix the macroeconomic environment. For that the Monetary Policy Committee of the central bank should be led by professional foreign macroeconomist who can advice the govt what steps have to be taken and what not.

Given the governance situation in the country, running too many social security programs and pension scheme sounds like luxury. Introducing new technology and spending public money will serve little if governance situation, which depends on practice and habits, does not improve dramatically. The apt example is the launching of voter ID card with photo that later became the national ID card. Bangladesh was the first country in the subcontinent to launch such a project in 2007 to bring transparency in pubic spending. Then British foreign state minister David Miliband even took part in the event with much fanfare. Unfortunately, we saw rigged elections and misappropriation of public money in spite of the presence of such cards. Abuse of social benefits of freedom fighter is another example. Only when the proper NID based database was launched ,many fraud freedom fighters got caught. The same NID is used by private mobile phone operators to sell SIM without any trouble. It is the intention and application that matters.

Bangladesh was the first country in the subcontinent to launch NID with photo and 5th in terms of launching the pension scheme. This kind of new things did little help to ease the burden of ordinary people. Dilapidated condition of the governance turns these things into a mockery instead reducing people's woes.

Trade Deal Favors Depreciation

Trade deal between two leading economies Creates depreciation pressure with less worries.

Both the USA and China successfully concluded a trade deal, clearing the ambiguities amid tariff war. As part of the agreement the USA will impose 55% tariff on Chinese goods while the China will levy 10% tariff on American goods. In addition, China will resume export of rare earth minerals vital for electronics industry and continue sending students to the USA.

Though the deal appears to give a sigh of relief, global trade still remains volatile amid US declared policy on easing the pressure on US dollar demand or weakening the USD.

The deal has implications for Bangladesh as well. Now we exactly know how much the China has to depreciate its currency to stay competitive in the US market. A 55% depreciation of Yuan will make the exchange rate 11.11 Yuan/USD. If the Chinese govt really allows this depreciation, then Chinese products in the US market will not witness increase in prices. So inflation in the USA will not be worse as disseminated by some quarter.

Meanwhile, Bangladesh is still in negotiations with the USA. It is facing a 37% tariff, which is likely to get lowered after successful negotiations. Current budget has proposed to remove VAT on LNG,soybeans and animal feed. It appears that LNG and soybeans may be on the list of Bangladeshi negotiating team. Bangladesh spends billions of dollars importing these two important items. In any eventuality, Bangladesh has to depreciate its currency between Tk 134.20/USD(for 10% depreciation) and Tk 167.52/USD (for 37% depreciation).

Luckily, Bangladesh govt removed tariffs from major agricultural inputs ,leading to lower the food inflation. If fuel prices stay stable, then Bangladesh has a good chance to depreciate its currency further without incurring serious inflationary pressure. The World Bank projection shows growth cut for the global economy, meaning less demand for goods in 2026. This will put downward pressure on major commodities.

The trade deal also put forward a new issue. The USA wants a weakened dollar in the years to come. The China with the resumption of trade will acquire USD and start buying treasury bonds , increasing the demand for USD. The US states passed laws that bar Chinese investment in agricultural land and purchasing property deemed near to sensitive area. Given the dwindling state of Chinese housing and capital market, a large part of the money will end up buying US treasury bonds , further complicating the US steps to weaken USD. It means there will be depreciation pressure on other currencies including Taka unless the USA comes up with a contingency plan.

The recent trade deal between the USA and China will bring pace to other bilateral trade negotiations. Hoping this will lead the trade talks between Bangladesh and the USA to see a successful end. Since there is no appreciation pressure on Taka for now, govt may consider to depreciate Taka further to make Bangladeshi goods more competitive.

La Semaine Dernière A Mes Yeux

( 7 juin --- 13 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
07	Riz gonflé	Riz,Batasio tengra,Petit taro chinois	Riz,Batasio tengra,Petit taro chinois	Mangue
08	Pain,Œuf	Riz,Pomme de terre,Soupe aux lentilles	Riz,Pomme de terre,Soupe aux lentilles	---
09	Pain ,Œuf	Riz,Orphie de l'eau douce,Pomme de terre,Soupe aux lentilles	Pain,Orphie de l'eau douce	---
10	Pain,Œuf	Riz,Brinjal, Lentilles bhuna	Riz,Brinjal,Lentilles bhuna	---
11	Pain ,Œuf	Riz,Haricot rouge avec sec ruban	Riz,Haricot rouge avec sec ruban	---
12	Pain,Œuf	Riz,Haricot rouge avec sec ruban	Riz,Batasio Tengra	---
13	Riz rassis,Batasio Tengra,Brinjal	Riz,Épinard malabar,Batasio Tengra	Riz,Épinard malabar,Ruhi	---

Budget Aims Inflation

Budget aims at lowering inflation, Trust restored after announcement of election.

Govt announced that the next election will be held on the first week of April next year. The announcement will clear further ambiguities surrounding election. Uncertainties will be further reduced by this announcement. Though the decision will send a positive signal, it has disappointed some parties which demand early election by December this year.

Law and order condition has not improved dramatically yet. But inflationary pressure is less compared to three months ago. Lowering fuel prices will have positive impact in coming months. Governor himself reiterated that the central bank would lower the policy rate when the inflation rate would fall below 7%.

Since the revenue target has not been achieved yet, it is still uncertain whether Bangladesh will be able to grab the next IMF loan. But govt lowered import duties on LNG and refined sugar. LNG has been increasingly used in power generation and fertilizer production. It will help bringing down the cost of power generation and fertilizer production. There is a tradeoff between revenue collection and bringing down the cost of agricultural inputs. Only time will tell whether it is a good move.

Govt also raised the taxes on land purchase and apartment sale. In addition, VAT was also raised for scrap metal, real estate agencies, imported lifts etc. This will contribute to raise the price of apartments many folds. High-end apartments nowadays become liquid assets. Since tax laws allow clandestine capital in this market, many intensively used the sector to document the undocumented wealth. With some paperworks apartments can be turned into cash. This practice drove the prices of apartments higher and deprived the govt of vital revenue as taxes were lower all these years. Govt intended to stop this practice by raising VAT and other duties on land purchase and apartment sale. However, govt lowered the registration fees and claimed other VATs surpassed the lowering of registration fees.

Now time will tell how effective it will become. I think there should be two or more public companies in partnership with private companies who will build cheap apartments for lower income group across the cities in Bangladesh. Pension fund will also get a secured investment in these companies. Property prices go up year by year, so return on investment will not fall.

Lowering taxes on packed liquid milk, animal feed, neutralized soybean oil, will have positive impact in containing the inflation. The proposed budget aims at lowering inflation, a priority task for the govt. If the IMF credit is missed,there will be further tightening of belt through spending cut. I do not think govt has the capacity to grab Tk 5.6 trillion as revenue from the market next year. It has to make further spending cut to make the deficit slim. The specific election date will help to gain investors' confidence and that of overseas credit institutions, which the economy badly needs.

Govt's Twin Challenges

The budget deficit and revenue shortfall Create future tax burden for all.

Attaining the revenue target has become so important for the govt. Till April, govt managed to collect Tk 2.89 trillion against a target of Tk 3.58 trillion. National Board of Revenue (NBR) has yet to furnish the data on May. The IMF set the revised target to be Tk 4.35 trillion for the current fiscal year. The shortfall reached Tk 1.46 trillion. It would be a spectacle to watch how the NBR will meet this gap in the next 28 days of this fiscal year. Meeting this target is vital for getting the next IMF credit package. Revenue generation is also crucial for bridging the budget deficit, which is 4% of GDP this year, and the target is set to be 3.65% for the next fiscal year.

Tk 2.26 trillion could be more than halved if NBR bags the shortfall of Tk 1.46 trillion. Missing the credit means we will lose vital source of financing the budget deficit, resulting in a wider budget deficit that nobody wants.

Govt's deficit financing plan consists of Tk 1.26 trillion internal borrowing and Tk 1.35 trillion foreign borrowing. This Tk 1.35 trillion of foreign borrowing will become extremely costly if the negotiations between the govt and the IMF fall apart. Moreover, govt's dependence on internal borrowing, mostly from banks (Tk 1.04 trillion), rises in this scenario. Govt is also relaxing conditions for investment on National Savings Certificate (NSC). This will definitely increase govt's spending on interest payment, eating away vital spending on other social security program.

Lowering the budget deficit is crucial for maintaining long term macroeconomic stability. Bigger deficits mean govt needs to borrow more from home and abroad, piling up the debt. Failure to lower the deficit puts pressure on subsequent future govt's. Since this govt has less political affiliation, it does not have any obligation to run a huge annual development program. Implementation of ADP is fraught with corruption and resource missallocation. ADP creates jobs,investment in rural areas is a banal political rhetoric. Look what happened to the govt that had implemented inflated ADP for all these years!

The govt has two ways to lower the budget deficit : increasing the revenue and cutting the ADP expenditure. There will be overwhelming effort for revenue generation next year to meet the target of Tk 5.18 trillion, there is no doubt. But for the remaining days of this year, govt can boost revenue by depreciating Taka through foreign exchange market intervention. The central bank can start procuring dollar and weaken Taka by 2/3%. Govt has just lowered the fuel prices and it will offset any resulting inflationary pressure. The move will augment revenue earning from import. This move can be coupled with dramatic cut in the rest of the ADP for this year. Political govt has a tendency to spend ADP money at the last leg of the fiscal year. This govt lacks this tendency, I believe, and so can slash the ADP spending significantly.

Tk 2.26 trillion can be lowered significantly if we lower the ADP spending. This will ease the pressure on revenue collection. And relieve the ordinary people from the heat of direct and indirect taxes.

Tk 2.3 trillion ADP spending can be lowered to Tk 1.5 or Tk 1.7 trillion. Missing the revenue target and failure to lower the deficit will push us towards costly bilateral option. Often bilateral arrangement may lead to sell national flag career or one or two utility companies. It may be OK for some ,but problematic to others. So doubling our effort to revenue generation and to lower further the deficit should be the priority.

La Semaine Dernière A Mes Yeux

( 31 mai --- 6 juin)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
31	Pain,Œuf	Riz, Soupe aux lentilles,Orphie d'eau douce	Riz,Orphie d'eau douce,Soupe aux lentilles	--
01	Pain,Œuf	Riz,Épinard malabar,Haricot rouge avec sec latya	Riz,Sec crevette avec graine du jacquier,Feuilles de gourde de bouteilles	Riz gonflé,Pois chiches	---
02	Pain,Œuf	Riz, Soupe aux lentilles,Sec Hilsa salé ,Épinard malabar,Feuilles de gourde de bouteilles	Riz, Soupe aux lentilles,Sec Hilsa salé ,Épinard malabar,Feuilles de gourde de bouteille	---
03	Pain,Œuf	Riz,Épinard malabar,Haricot rouge avec sec latya	Riz,Épinard malabar,Haricot rouge avec sec latya	---
04	Pain,Œuf	Riz, soupe aux lentilles,sec crevette avec graine du jacquier,Purée de pomme de terre,Brinjal	Riz, soupe aux lentilles,Purée de pomme de terre,Brinjal	---
05	Pain,Œuf	Riz,Purée de brinjal,Ruhi,Gombo,Soupe aux lentilles	Riz gonflé,Lait	---
06	Pain,Œuf	Riz,Batasio tengra,Petit taro chinois,Gombo,Luffa	Riz,Batasio tengra,Petit taro chinois,Gombo	Mangue

The Cost Of Domestic Turbulence

Protests cast shadow over revenue target, Lost market share, credit may become the reason for regret.

Protests by the public servants at the Secretariat and at the National Board of Revenue (NBR) crippled the functioning of govt. Govt was compelled to introduce "The Public Service (Amendment) Ordinance 2025" that permits the govt to fire a public servant within 8 days. The ordinance created further grievance and rift. Earlier govt had announced to provide allowance, which was earlier cancelled, to public servants. It now would cost the govt Tk 70 billion.

The NBR staffs are protesting the separation between policy department and implementation department. No one is losing their jobs or benefits here, but govt did not consult with the staffs prior to taking the decision. Many felt deceived and started the protest. The cost is huge: govt may miss the revenue target of Tk 4.35 trillion set by the IMF. The revenue shortfall already crossed Tk 1 trillion and it is impossible to meet the target in the next one and half months. Now if the IMF does not dramatically change its position on the revenue target ,Bangladesh may fail to get the next installments , making it harder for deficit financing. Worst is that the IMF may suspend the program, signalling others to withhold their budget support. If that happens, we may see deterioration of macroeconomic conditions, leading to [rise] in market risk through currency volatility, inflation and prolonging the contractionary monetary policy.

We still have no clue where the tariff debate will lead us. Now this domestic turbulence at the heart of administration and the revenue department will undermine the economy. Since August 5 of last year, value addition to domestic tyre manufacturing industry was hampered, local market share in the tyre market declined. Indian restrictions on import of Bangladeshi goods through land ports will lower export of our agro-processed products to the country. China's decision to import mango, jackfruit from the country may further lower value addition and hamper employment in the agro-processing industry. Furthermore, the tariff debate also casts shadow [over] leather export. Since Bangladesh is delaying [implementation] of waste treatment plant as per the guidelines set by the Leather Working Group(LWG), wet blue leather export to the West was halted. The China filled the void by buying the rawhide and reexporting them to the West over the years. But the tariff debate [interrupted] the reexporting program of leather, resulting in delays of shipments and piling up of rawhide in tanneries.

Both domestic and external factors affected our manufacturing sector. Further domestic turbulence will raise the systematic risk, casting shadow over our manufacturing sector. Instead of exporting agricultural raw materials, we could encourage export of processed and value-added agro-based products. Joint ventures in leather and agro-based products could be considered to boost our export. Similarly, seeking soft grant or spending Tk 70 billion in setting up LWG prescribed treatment plant could easily open new potential [for] leather export. We can ill afford losing the next IMF credit package and losing export share of our leather and agro-based items. In this regard, wider political consensus is needed to address grievances at home.

La Semaine Dernière A Mes Yeux

( 24 mai --- 30 mai)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
24	Pain,Omelette	Riz gluant,Lait	Khichuri,Batasio Tengra	--
25	Pain,Œuf	Riz,Épinard malabar,Batasio Tengra	Riz gonflé,Batasio Tengra	---
26	Riz,Épinard malabar,Soupe aux lentilles, Purée de pomme de terre	Riz,Épinard malabar,Soupe aux lentilles, Purée de pomme de terre,Haricot vert	---	--
27	Pain,Haricot vert et pomme de terre bhaji,Jacquier	Riz,Soupe aux lentilles,Poulet,Œuf	Pain,Jaggery	---
28	Pain,Haricot vert,Œuf	Riz,Soupe aux lentilles,Poulet,Œuf	Riz,Haricot vert,Poulet	--
29	Pain,Haricot vert,Œuf	Riz,Soupe aux lentilles,Batasio tengra	Riz gonflé,Batasio tengra	Graine de jacquier
30	Pain,Œuf	Riz,Soupe aux lentilles,Batasio Tengra	Riz,Soupe aux lentilles,Orphie d'eau douce	--

The Bias In "The Unbiased Move"

The list of the corrupt spares few, Govt triggers panic anew.

Govt has decided to set up a fund of Tk 1.3 trillion by seizing the properties and assets of former ruling party politicians and cronies. Apart from that many other less important irregularities and money laundering incidents are being investigated. The newly formed fund will be used to pay back the money of trouble-ridden banks and to finance the pro-poor programs.

The UK authority already confiscated properties belong to former ruling party crony. And govt is working diligently to bring back some of the laundered money.

Since the fall of former regime, former central bank governor, former cabinet secretary, former spy bosses,former army chief, former police chief literally vanished from the country. They are on the run. This tells the magnitude of corruption taken place during the previous regime and retributive political culture in this country. These men-on-the-run do not have courage to face the press and the court. What surprised me the top 10 list of crony groups does not include business conglomerates that have close ties to former Army chief or contributed to recent political activities or just switched sides.

For instance, former finance minister's business conglomerate that was accused of stock market manipulation and other irregularities are not in this list. This group has close ties to the business group of a former mayor who was also brother of a former Army chief. It was accused of grabbing land in city's high-end residential quarter. Former finance minister was the architect behind,as claimed by himself in the Parliament, the 9-6 interest rate policy that led to macroeconomic disaster and number 1 client of a specialized bank. Interestingly, he was arrested before during the time of 2007 caretaker govt and this [time he] was allowed to flee the country after receiving prior information of the brewing political turbulence. And his business group goes off the radar of scrutiny when govt is preparing the list. This politician cum businessman was first nabbed [in 2007], then released ,allowed to lead to plunder the economy and then allowed to flee the country before others. Another businessman cum politician who was also ruling party MP and former president of Bangladesh-China Chamber of Industries is spared. Its news outlet played a role during the time of July uprising and made generous donations to newly formed political parties. Similarly, many real-estate developers who patronized the new political parties goes off the radar from this corruption scrutiny. In addition, Army backed subsidiaries that benefitted [financially] by supplying voting gadgets to controversial elections are not on that list.

Some of the business groups whose properties are seized were acted upon the instructions of high ranking Army officials tasked to deal with issues garnering attention at home and abroad. How on earth would a business group launder such sheer size of bank money without prior instruction/ blessing of powerful agencies? Even the governor in an interview with an international daily acknowledged this. The group entangled itself with the kitchen market so deeply that it even contributed to the price hike of kitchen commodities after the fall of Hasina regime.

The 9-6 interest rate policy raised the portfolio risk, affected by systematic risk,inflation risk,currency risk and political risk. There should be clear distinction between the groups/ individuals that transferred money abroad with proper business credentials and those with corruption motive using fake id and shell companies. Since the systematic risk prevails at large, the newly formed fund should be used to assist groups and individuals who may fall prey to portfolio risk.

The previous corruption drive in 2007 set a panic spree and led the massive money laundering incidents in the subsequent years. Setting up a regulatory environment and routine work instead of seasonal drive after a long hiatus will be more effective.

Since nondiscrimination is the motto the current regime adopted for its action, current anti-corruption drive should reflect it if it is eager to pursue it anyway.

Tax On Remittances: Good Or Bad?

The big bill propels another currency de facto, Back from the brink rises again the crypto.

The Trump administration has introduced a bill "One Big Beautiful Act", suggesting imposition of 5% tariff on all kinds of outward remittances. There is widespread fear here that it would lower the remittances from the USA. It is too early to make such comment. The decision would undoubtedly allow the US govt to bag huge amount of revenue to address its huge deficits.

The tariff debate, weakening of US dollar , tax on remittances hint that the US want to ease the pressure on US dollar demand. At the same time, it would encourage alternate mode of transfer. Cryptocurrency witnesses unprecedented surge after having severe regulatory restrictions across the globe. Weakening of dollar also means reduced purchasing power of the holder of dollar denominated assets. One would [in] such scenario try to convert the money into other currencies or invest in assets where one's money will grow. If one wants to invest abroad in spite of having serious restrictions at home or wants to avoid political controversy ,alternate mode of transfer and exchange would become popular. So here the cryptocurrency comes into play. Following the onset of the war in Europe, many billionaires in Russia and China transferred their wealth abroad in the face of severe restrictions at home. Weakening Yuan may be good for competitiveness but it also hit hard the purchasing power of the rich if their assets are in Yuan. In addition, there is a thing called "portfolio risk" that may hurt balance sheet of the company if its domestic return on investment is too low compared to return on investment abroad. Sometimes it casts shadow over the existence of the company. That is why there is a tremendous rush to invest/ transfer wealth abroad. As govt regulations become rigid, many try to depend on alternate mode of transfer like crypto / bitcoin in order to avoid controversy. As more people switch to this mode of transfer, it becomes mainstream and calls for global convention for its operations. In the past, organized criminal groups used this channel due to lack of global convention. Future of bitcoins depends on how this mode of transfer/exchange behaves in a world of rising protectionism and growing demand for deregulation. This is where the US tax on remittances [sets] the course for further revival of this alternate mode of transfer.

The UAE based exchange houses raised fees by 15% for outward remittances in 2024. But they kept the money-sending apps out of this regulation( For more see "Remittance Er Mashul 15% Briddhi Korbe Arab Amirat,Probashider Khoroch Barbs(UAE To Raise Fees For Remittances By 15%,Migrant Worker's Cost Will Rise)", Daily Ittefaq,April 9,2024). Despite the fee hike, the UAE became the second highest remittance source for Bangladesh in 2024. The rise in fees did not have severe impact on remittances for Bangladesh.

Imposition of tax on remittances will raise the cost for remitters. It will also eat away the gain of speculators and opportunistic groups who launder money abroad through trade invoices and remit back the money to siphon off govt subsidies. Free floating of Taka has made that money laundering activity even more costlier.

The remittance tax also made the prospect of launching apps for sending money by Bangladesh Bank /local bank even brighter. It will gain the trust of the remitters and prevent the accumulation of funds into wrong hands.

The tax on remittances at one hand resurrects the bitcoin by drawing people and popularizing it, and on the other hand opens up new opportunity in Bangladesh by preventing the money laundering activity. Drawing the lessons from UAE changes, we hope that this change will also bring good to us.

La Semaine Dernière A Mes Yeux

( 17 mai --- 23 mai)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
17	Pain,Pomme de terre bhaji	Riz,Pomme de terre ,Gobie,Tige de l'arbre de banane,Haricot vert	Riz,Pomme de terre,Tige de l'arbre de banane,Haricot vert	--
18	Riz,Œuf,Pomme de terre	Riz,Gobie,Gourde blanche,Pois blanc	Riz,Gourde blanche,Pois blanc	---
19	Pain,Pois blanc	Riz,Épinard d'eau,Tofu(depuis marché),Gourde blanche	Soja Roshmalai(depuis marché)	--
20	Riz,Pois blanc,Œuf,Soja Roshmalai(depuis marché)	Riz,Œufs de Ruhi	Riz gonflé,Pois chiches	Ananas
21	Pain,Tofu (depuis marché),Œuf,Lait	Riz,Crevette sèche avec aubergine naine(«Teet Begun»),Œuf, Pomme de terre	Riz gonflé,Pois chiches	--
22	Pain,Œuf	Riz,Feuilles de moringa	Riz,Feuilles de moringa	---
23	Kacchi biryani	Riz,Œuf,Soupe aux lentilles et pois blanc	Riz gonflé,Soupe aux lentilles et pois blanc	--

Taka Floats Freely

Introduction of free floating Stops leakages and brings foreign financing.

Bangladesh Bank formally introduced fully floated exchange rate,removing the last obstacle getting the third and fourth installments of the IMF credit package. The decision is greeted with cautious optimism. However, many are waiting to see how the market will behave next week.

Fully floated exchange rate will reduce the incidence of illicit financial flow. From now onwards, unofficial rate will be much higher than the official rate as Taka is aligning to its true value, increasing the cost of sending money abroad clandestinely. Another reason is that it will prevent leakeges in the development projects that depend heavily on imported materials. When value of Taka drops, the cost of import rises and part of the money identified for siphoning off will get reduced. Less booty from the projects in case of frequent depreciation of Taka in a given year. Perhaps this is the reason Taka had been pegged at a certain value for a long time.

The 90-day long 30% tariff on Chines goods gives Yuan some advantages for further depreciation in this period. Instead of 145% depreciation in the worst case, this 30% depreciation seems a much more acceptable bet though inflationary pressure may spread. Given the nature of Chinese govt, they can deal with it. Meanwhile, we have to be contended with the 10% depreciation during this time provided that we have the right market conditions to do so. The spot exchange rate shows that Taka has already depreciated. Next week if dollar becomes stronger it will be depreciated even more. That is indeed a good news.

Though Bangladesh's credit rating deteriorated, foreign banks may encourage to bring more USD from abroad to widen their operations/ coverage here. Few years ago, a great part of their operating profit came from selling USD. Though the USD they bring may be small compared to remittances and export earnings ,this USD will greatly help lending credit to local investors and SMEs.

Despite the accompanying challenges, the free floating of Taka opens the possibility of thwarting the abuse of public fund. It also opens the possibility of foreign financing of local projects through operations of foreign banks.