Cushioning Fall Of Taka

Allow businesses to transfer money abroad To keep the incentive spending short.

The uncertain situation about Non Performing Loans casts serious doubt about Taka's stability next year. Exchange rate of Taka against US dollar in this week is Tk 122.46/USD ,which was Tk 121.75/USD a month ago. Though this depreciation is within the tolerable limit and the expected range of Bangladesh Bank,a big fall may cause serious trouble. As I have mentioned several times in this space, Bangladesh can afford depreciation of Taka between 5%(Tk127/USD) and 10%(Tk 133.1) in a year. Transitory effect of depreciation will be manageable and less severe given more forex making entry into the country. Otherwise, it will make lives miserable by pushing up the prices of essential goods and services and accelerating capital flight from the country. A macroeconomic nightmare for any govt.

The chance is high that after the election when many restrictions will be relaxed a fresh round of capital flight may be observed. The volatility of local currency in short span of time increases the risk for fund management of the companies as it shrinks their assets if those are denominated in Taka. Unfortunately, Bangladesh Bank has stricter policy to transfer money abroad through official channels. For this reason, many opt for clandestine means to launder money abroad. If these companies have means to invest their money into foreign resources through legal channel , I think incidence of money laundering could be [curbed] to a great extent. One way is to set a ceiling on investment abroad and provide some quota on foreign investment by a Bangladeshi company. Another approach is to allow investment on commodities, foreign bonds through Bangladesh. Soon commodity exchange market will be operational in Bangladesh. If local companies can invest part of the assets in gold,silver,platinum, copper ,then part of the money they launder abroad will stay at home. Similarly, if we allow them to invest in foreign bonds through local stock exchange or by any other means then that will add great value to their investment. At the same time, purchase of foreign real estate should be legalized inside Bangladesh. The central bank can have a clear tab on investment on such property and repatriation of capital gain from resale of such property. At the moment,Bangladesh Bank remains in the dark about [laundered] money caused by political uncertainty and currency volatility. The measures suggested here will give the central bank some idea how much money will go abroad and how much proceed/ return on investment will come back to home. Most importantly, it will hold back to some extent the capital flight.

Nonchalance stance to take money abroad legally puts pressure on government incentives. When these companies will fall into trouble due to currency volatility ,they usually seek public incentives. In most of the cases govt complies to their demand, costing tax payer's money. Allowing businesses to transfer money abroad for investment purposes legally discards the need for such incentives.

The $800 million Chinese investment pledges,which is likely to happen in next 12/24 months in the textile and RMG sector, is mostly influenced by global tariff debate, China's shrinking opportunity to invest in Occidental countries and not by uncertainty about Taka's value. China has excess capital of more than three trillion dollar. They have a controlled money market and problem-stricken property market, denting in their returns. The Chinese does not spare opportunity to invest this money abroad. This is why they aggressively invest in the RMG sector in this country. The volatility of Taka has little impact [on] their business decision because in any such case they will simply convert it into Yuan and repatriate the money back to China. And the Chinese central bank is willing to lend Bangladesh more Yuan when the Chinese investments will be in trouble in Bangladesh. The point is instability of Taka poses serious threat to future FDI and local investment given Chinese investment is an exception.

To protect domestic companies from currency volatility risks, the central bank should allow them to invest abroad. Or let them purchase foreign assets from Bangladesh. The move is aligned to check public spending and keep the private business balance sheet healthy without the need for govt intervention.

La Semaine Dernière A Mes Yeux

(25 octobre --- 31 octobre)

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Ma Semaine Gastronomique

Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
25	Riz,Lait	Singara(depuis marché)	Riz,Tengra,Pomme de terre bhaji	---
26	Pain,Œu,Soupe aux lentilles	Singara(depuis marché)	Riz,Pianju(depuis marché),Tengra,Soupe aux lentilles	---
27	Pain,Soupe aux lentilles, Œuf	Butterbon(depuis marché)	Riz,Feuilles de gourde bouteille	Pois chiches
28	Pain,Lait poudre	Riz,Soupe aux lentilles,Banane verte,Pois chiches,Pomme de terre	---	---
29	Pain,Lait	Singara(depuis marché)	Khichuri,Poulet	---
30	Pain,Yaourt	Riz,Poulet,Gourde bouteille	Petit mughlaï paratha (depuis marché)	---
31	Pain,Lait poudre	Riz,Petit taro chinois,Radis	Butterbon(depuis marché)	Œuf

Transforming The Public Spending

Policy support instead of incentive May provide the much needed relief.

Every year we just keep spending in key sectors like defense,education, local govt. Yet we fail to keep most of the spending at home. Meanwhile, we borrow a lot from abroad and home to meet the budget deficits. Our revenue collection is in not so happy state. Though pace of revenue collection is growing,but it is well short of the target.

There has been a shortfall of Tk 88.99 billion in revenue collection in the first quarter of 2025-26. This year's total revenue collection goal is Tk 4.99 trillion,set by the IMF. The revelation indicates tally of the shortfall will be larger at the end of current fiscal year. This means on average around Tk 1.25 trillion has to be collected in every quarter. Even the NBR set target for July-September period was Tk 990.05 billion. And NBR missed it. It will be quite difficult to fill the lag in the coming quarters. As usual VAT became the top revenue earner. It did not register any shortfall, rather a surplus of Tk 7.1 billion. Income tax registered a shortfall of Tk 65.41 billion. Import duty registered a shortfall of Tk 30.68 billion.

Since the reciprocal tariff came into effect from August, we have to see its impact on revenue from import from the second quarter(Oct-Dec). Already import revenue dipped. The likelihood of revenue shortfall may become clear in next quarter. Despite the 20.45% growth in revenue collection year-on-year, it is still VAT that contributed mostly on this growth, riding on supplementary duty (witnessed a 64.83% growth) and excise duty (29.49% growth). That means NBR has yet to overcome its capacity shortcomings and relies mostly on raising tax on taxes that affects consumption of goods & services(See NBR).

As I mentioned in earlier pieces(See "Keeping The Public Spending At Home" & "Flaws In ICT Policy"),if we keep part of the public spending as earnings of private companies, then growth of key sectors and revenue collection can be ensured. I already mentioned diverting part of defense [spending] to private sector. Similarly, if the govt [makes] policies to ensure domestic software use in educational institutions from primary to tertiary levels, the whole IT industry will be back on its feet without recognition of thrust sector, without tax break and undocumented money(See my piece "The Chutney Song Mystery" published on https://rezaulhoque.wordpress.com on July 16,2020). Thousands of IT firms will be popped up to cater to the need of educational institutions, getting part of the spending on education and providing govt the VAT and taxes. Similarly, if the govt abolishes the local govt engineering dept/ downsizes it and awards the local engineering works to the homegrown private engineering firms, govt will create high valued jobs,keep spending at home,prevent leakage and boosting tax revenue.

Under the present circumstances, govt provides support for education ,ICT and local engineering. But the spending on one sector does not lead to growth in other sectors. Moreover, govt has to continue spending on these sectors every year, causing leakage, poor quality and loss of revenue and jobs. Now think govt wants to digitize the class rooms of all the high schools. It wants to spend on gadgets needed on such task. Now say it makes policy that [states] that gadgets ,operating software,payroll software,hr software, erp software will be made and maintained by Bangladeshi companies. Then it does not need to provide any cash incentives to IT firms or give indefinite tax breaks. Through the policy support ,govt is generating working order for these companies. And as multiple firms will compete for the [work] ,quality of the projects will be ensured and leakages will be stopped. Plus govt will receive tax revenue from the IT companies.

Revenue shortfall and constraints originating from ongoing monetary policy hint that govt cannot do business as usual without changing the monetary policy. Given this situation, it has to [chalk] out policy supports that aim to divert part of the public spending to private sector and boost revenue,job creation and growth for the private sector.

[Update: this piece has been updated by me on October 24,2025 at 7:37 AM and on November 01,2025 at 8:30 AM and 9:39 AM Bangladesh Standard Time.Update includes references.]

La Semaine Dernière A Mes Yeux

(18 octobre --- 24 octobre)

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Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
18	Riz,Pois chiches,Soupe aux lentilles	Riz,Soupe aux lentilles, Épinard, Malabar	Riz,Pois chiches,Soupe aux lentilles	---
19	Pain,Soupe aux lentilles	Riz,Papaye et banane verte,Soupe aux lentilles	Riz,Papaye et banane verte,Soupe aux lentilles	---
20	Pain,Lait	Singara(depuis marché)	Riz,Petit poisson,Soupe aux lentilles	---
21	Pain	Riz,Papaye-Pomme de terre,Soupe aux lentilles	Riz,Papaye-Pomme de terre,Soupe aux lentilles	---
22	Pain	Singara(depuis marché)	Riz,Soupe aux lentilles,Pois chiches,Petit taro chinois avec ruban sec	---
23	Pain,Œuf	Riz,Papaye-pomme de terre,Pois chiches,Soupe aux lentilles,Œuf	Riz,Pianju (depuis marché),Soupe aux lentilles	---
24	Pain	Riz,Tengra	Riz,Tengra	---

Will 2026 Bring Optimism?

Ghost of past habits still prevails at large, Weak passport, falling revenue may make reform a farce.

The IMF has downgraded growth forecast of Bangladesh to 4.9% from 5.4% for 2025-26 fiscal year in its "World Economic Outlook Report". The global lender anticipates an inflation around 8.7%,which is higher from earlier projection, for next year. Even this projection tells the exorbitant prices of consumer goods people are dealing with in Bangladesh,which endures higher inflation than other neighbors in the subcontinent.

What is worrying contesting parties of the February general election have not come up with specific plan on how they tackle the $34.71 billion Non Performing Loan(NPL), missing from the banks and risking the stability of Taka. As I have mentioned in one of my [pieces], the new government will have exactly 24 months to roll out a detail plan and fix the economy even if they are deeply committed to reforms(See "NPL Endangers Exchange Rate"). The rest of the tenure will be used to win the next election, witnessing expansionary fiscal policy and compromising the contractionary policy.

Adding salt to injuries is Henley's downgrading of Bangladeshi passport by three notches. Bangladeshi passport is ranked 100th among 106 countries in Henley's latest passport index. East Timur's ease of visa and Pakistan-Bangladesh treaty on visa waiver on [govt official] passport holders have little reflections on latest passport index. Rather, UAE continues visa restrictions on Bangladesh following street agitation by Bangladeshis in July last year in that country. Sri Lanka has recently hardened on arrival visa by making compulsory e-appointment. Indonesia and Thailand walked in the same direction. Malaysia has yet to resume recruitment of Bangladeshi workers following corruption in the process involving Malaysian officials and visa officers. Several EU countries limited visa activities in Bangladesh, curbing cost and securing their borders. Sweden stopped processing Dutch visa in Dhaka ,outsourcing the job to Delhi-based third party. France is also doing the same. UK reviewing its caregiver visa policy following unprecedented abuse of the policy. Moreover, free trade agreement with India has allowed Indian RMG,workers and investment to enter UK easily. This means weak passport and visa restrictions limit Bangladeshis' overseas employment, farther casting shadow on a stable remittance inflow. Interim govt has given an aura of regime change that is why remittances coming in abundance. We do not know how the new government will behave. If it is business as usual like before,then a dip in remittance inflow is anticipated.

Risk about Taka's rapid fall against major currencies may prompt capital flight. Already many rich businessmen are queuing up for leaving the country. When Taka plummets, it downsizes wealth of [the] rich if the assets are denominated in Taka. That is why the rich have a tendency to transfer wealth abroad when local currency falls sharply against major currencies. If they cannot do it legally, they will do it through other means. This prospect is very real when the new elected govt will assume power next year. There may be a greater urgency to transfer wealth abroad if retribution and fall of Taka gathers pace.

In 25 months/ little more than 2 years ,we see 3 elections: 1 held in January 2024 boycotted by the opposition, another will be held in February in 2026,which may also see absence of a major party, and a referendum in the same time or a bit earlier. The regime change alone cost $1.7 billion to the economy. Following the 2024 election govt doled out Tk 300 billion to partisan businesses. These are costing govt huge public money without giving any assurance to political stability. Moreover, in the name of "Mujib Shotoborsho" (Mujib's birth centenary) govt spent huge money across Bangladesh. Following regime change, most of the structures built in commemoration of Mujib witnessed demolition. Now public money is being used to implement "July Movement" projects. Despite regime change, past habits remain intact.Point is we are spending billions of public money in political projects without any assurance of political stability,which is vital to economic stability. All this unfolding during the time of austerity.

The tariff debate unveils that in initial years we may [lose] tariff, as import duty is relaxed on crucial import items like cooking oil and LNG, unless some contingency plan (like taxing remittance and export) is chalked out. At one hand we are [losing] revenue, on the other we keep spending on political projects with no guarantee on stability. Failure to a clear roadmap on how to deal with the NPL puts stress on Taka and prompts capital flight. Weakening of passport casts shadow over remittances. Still we hope there will be a better tomorrow.

La Semaine Dernière A Mes Yeux

( 11 octobre--- 17 octobre)

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Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
11	Pain,	Riz,Petit poisson,Papaye	Riz,Petit poisson,Papaye	---
12	Pain,Pomme de terre,Œuf	Riz,Tige de arum ave crevettes sec	Riz,Tige de arum ave crevettes sec,Bata poisson,Soupe aux lentilles	---
13	Pain,Soupe aux lentilles, œuf	Riz,Bata poisson,Papaye	Riz,Bata poisson,Papaye	---
14	Pain	Riz,Épinard malabar,Poulet	Riz,Épinard malabar,Poulet	---
15	Pain,Papaye, œuf	Riz,Petit poisson,Épinard malabar	Riz,Petit poisson,Épinard malabar	---
16	Riz,Œuf,Poulet	Riz,Soupe aux lentilles,Pois chiches	Riz,Soupe aux lentilles,Pois chihes	---
17	Pain,Poulet,Soupe aux lentilles	Riz,igname géante de tache blanche	Pain,Soupe aux lentilles	---

Keeping The Public Spending At Home

The program of big ticket defense purchase Should keep some spending at home ,worrying less.

It has been reported on the press that govt is considering to purchase 20 J-10CE combat aircrafts from China at a cost of $2.2 billion on a G2G basis. The amount will be paid in 10 years. Although there has been much criticism about this procurement decision, govt has so far refrained from making any comments. Given the nature of the deal ,$220 million or Tk 26.78 billion per year is quite manageable for Bangladesh govt. Only $1.2 billion will be spent on buying 20 jets,the rest will be spent on spares,equipments,training and maintenance. The decision came when most of the Mig-29 aircrafts are grounded because of engine shortage. Some claiming that the J-10CE deal is a separate deal from the MRCA program(twin engine aircraft procurement) for which tender has already been floated but delayed because of sanctions on Russia.

It is not clear what engine will power the J-10CE. Some report suggests that it will be WS-10B engine. But earlier report says export version of J-10CE will be powered by Russian AL-31FN series 5 /RD93MA engine,which has greater service hours(mean time between overhaul is more than 2200 hours). Reliability of Chinese engines halted export prospect of J-10C all these years. It is claimed Chinese WS-10B engine has service hours between 500 hours and 1500 hours. That means with WS-10B, there is a need of frequent maintenance, raising the maintenance costs. The use of WS-10B engine hints that future MRCA aircraft maybe Chinese aircrafts too. Probably J-16,which also uses the WS-10B engine.

This piece does not intend to dig on technical specs of upcoming fighter aircraft but to address a key issue: keeping some of the public spending at home and adding value to the economy. In the piece titled "Altering Policy To Rejuvenate The Economy", I highlighted the need to divert part of the defense spending to the private sector in this time of austerity. It will work as stimulus and increase the capability of the private sector in addressing challenges in the defense sector. Think of this J-10C deal. Even if it comes true , then repairing and overhauling of the engines can be awarded to a Bangladeshi private company operated by former BAF engineers and technicians. Similarly, the deal can incorporate clause that allows to integrate indigenously developed munitions (training & real) into the Chinese platforms. So every year public money spent on training munitions will end up into pockets of Bangladeshi private defense article manufacturers. To sustain this domestic private defense industry, sectors like material science,precision equipment manufacturing, electronics, metallurgy, mechanical engineering,electrical engineering, engineering,AI,chemistry,chemical engineering, steel,shipbuilding,finance & leasing,logistics and stock market will develop and grow further. A whole new ecosystem will be built out of this defense spending. When Sweden was working on its first domestically designed fighter aircraft, several universities and labs got funding from the govt. And when you allow domestic private sector to take part into defense sector, you are creating jobs for high valued professionals like engineers,technicians,scientists. And you are absorbing former military engineers and technicians into this sector and they will be at the forefront in operating the companies.

We are also developing a training aircraft at home. To develop it further ,we may seek technical assistance from more advanced foreign companies. Big ticket defense purchase program allows such possibilities. Similarly, we may bring up the issues of indigenous weapons integration and domestic overhauling plant during the time of negotiations. When it comes to defense spending, business as usual should be [changed] and more private sector participation should be ensured.

La Semaine Dernière A Mes Yeux

( 04 octobre--- 10 octobre)

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Date	Petit déjeuner	Déjeuner	Dîner	Snacks,Sucreries,Boissons et Fritures
04	Pain,Soupe aux lentilles, œuf	Riz,Soupe aux lentilles,Pomme de terre	Pain	---
05	Pain	Riz,Harcot avec courge amère	Riz,Haricot avec courge amère	---
06	Pain,Soupe aux lentilles, œuf	Riz,Harcot avec courge amère,Soupe aux lentilles	Riz,Pois chiches,Soupe aux lentilles	---
07	Pain,Pois Chiches,Œuf	Riz,Petit poisson	Riz,Petit poisson	Tchira bhaja(depuis marché)
08	Patate douce	Riz,Ruhi	Riz,Ruhi	---
09	Pain,Soupe aux lentilles,Œuf	Khichuri,Ruhi	Khichuri	---
10	Pain	Riz,Courge amère avec beans	Riz,Courge amère avec beans	---

Perks Of Having A New Language

New language has perks and beauty, Dawning an economy,full of opportunity.

The perks of having a new language is enormous. Think of bringing down the 49 letters into just 25 letters. We have wasted lots of inks and papers all these years to compose essays ,documents using redundant 49 letters. It will not only save composition time,but also [bring] monetary benefits to govt and individual alike. Look at these letters:

অ ই উ এ ও
ক গ ঙ
চ জ ঞ
ট ড
প ব ম
স য
ত দ ন
ং ৎ ঃ ঁ
~

There are just 25 letters and the accent ~. We could introduce more accents if we wish.' অ ' is pronounced as usual. We could use '~' above 'অ' to get 'আ'. Same thing goes for other letters. Apart from that 'র','ড়','ঢ়','য়' do not need direct entry into the alphabets. These are just tiny '.' under the letters already introduced as example. Moreover, we may welcome brand new letters,may be invented by linguists or could be borrowed from other languages. For foreign words, we could use Roman or Greek letters. For instance, 'চেয়ার' ,'রিকশা' could be written like 'Chair','Rickshaw'. Or we can just spare them.

But having a new script is really interesting. It will give the language a complete new look and impression, retaining some pronunciation as we have right now. Artists' assistance can be taken to get the new vowels and consonants. Vowels in particular needs more attention. 5 is more than enough. No need for joint letters as we have now in the present language. It just complicates the writings and takes a lot of time composing a sentence. The 25/26 letters will need less Unicode characters. So composition time will be shortened. Websites will require less space to publish Bangladeshi language contents. Storing contents in Bangladeshi language will take less space, cost of the govt and private sectors will come down remarkably. Not only digital contents, publishing Bengali books,text books will require less paper,saving publishers and govt a lot of money. Paper saved may be used to bring more illustrated text books to make clear the comprehension.

The another advantage is that the new language will work as filter,as barrier to thwart the demoralization or disinformation campaign originating from abroad. Many of these contents will lose their meaning and nuances in translations. So target people have less chance to get offended and reactionary stance will be less severe. In this backdrop, any political or strategic goal out of these obnoxious contents will be hard to achieve. There will be less occurrence of political tension or communal tension provoked by such contents.

The transformation from Bengali language to Bangladeshi language will create opportunities for teachers and graduates of language and linguistics departments. Brand new dictionary, books of antonyms and synonyms ,books on grammar are needed to give shape the new language and to facilitate the learning. It will create opportunities for software engineers as well to facilitate the adaptation of the new language in cyber space and data centers. It will create a new economy from publishing to broadcasting, from infotainment to cloud computing. And thousands of content creators will be needed to create contents on new language.

The main challenge promoting the new language is to popularize it. As I have said a group of individuals may start it among themselves as fun language. Since digital platform is cheap, its contents may be published on digital platform. Frequently visited places like educational institutions, prayer places,public transportation,clothes could be the places to display the new letters and expressions of the language. After gaining some popularity, a dedicated printing press may take up the task to publishing the books ,magazines in new language. As smartphones are available, a new app maybe launched to promote the language. Grammar, orthographs may be figured out by the linguists. But the letters can be picked up through popular voting. A dedicated websites will publish the initial letters. Then people from all walks of life will vote for the letters they think appropriate for the new language. This participation will make the process of introducing a new language unique and participatory.

A new language is not just a new language. It will protect the population from harmful campaigns ,save time and money of public and private sectors and bring fresh impetus to the economy, creating new opportunities.