Eminent economist and Honorary Fellow at the Center for Policy Dialogue (CPD), Professor Dr. Mustafizur Rahman, has called on the new interim government to enhance its focus on economic diplomacy.
Dr. Rahman highlighted that the country's economy is facing a crisis exacerbated by recent political upheavals and fragile economic conditions over the past two years. To address this crisis, he advises the interim government to adopt and implement policies centered around economic diplomacy.
In an exclusive interview with Barta24.com, Dr. Rahman discussed the country's immediate and medium-term economic challenges, including domestic resource mobilization, remittances, manpower exports, and foreign loans.
Barta24.com: In the midst of both global and domestic economic turmoil, what should the new interim government focus on during this transition period?
Professor Dr. Mustafizur Rahman: The economy has faced various pressures over the past two years, including high inflation, reserve strain, and market system disruptions. Recent student protests have added to this strain. Moving forward, the government must address several key issues: reforming the banking sector to tackle mismanagement and bad loans, controlling inflation through coordinated monetary and fiscal policies, and improving market governance. Immediate actions include correcting supply chain deviations and addressing extortion and other negative trends.
Barta24.com: What medium-term measures should be considered?
Professor Dr. Mustafizur Rahman: Managing debt will be crucial to avoid future pitfalls. Our focus should be on cost-effective and timely project execution with strong governance. Immediate and medium-term challenges must be addressed with this in mind.
Barta24.com: How will the change in government impact ongoing international projects and investments?
Professor Dr. Mustafizur Rahman: We have ongoing projects financed by various international partners, including China, India, Japan, the World Bank, and the ADB. It's essential to continue these collaborations while reviewing loan conditions and renegotiating where possible to align with our economic priorities. Maintaining strong bilateral and multilateral relations will be key.
Barta24.com: Are there risks associated with completing these projects or managing debt?
Professor Dr. Mustafizur Rahman: Risks may arise if financing terms are not adhered to, but ongoing projects are less likely to face major risks. We need to reassess our priorities and decide which projects to pursue or modify to ensure effective debt management and project execution.
Barta24.com: How should the interim government approach economic diplomacy?
Professor Dr. Mustafizur Rahman: Economic diplomacy should prioritize national economic interests. This includes renegotiating loans, expanding duty-free access with various countries, and strengthening trade and remittance relationships. As Bangladesh approaches LDC graduation, securing extended duty-free access from key trade partners and enhancing manpower exports should be central to our strategy. Diplomacy must be strategically oriented towards economic outcomes.
Edited by Mahmood Menon, Editor-at-Large, Barta24.com