Noting that the mobile financial institutions like 'bkash' or 'Nagad' have revolutionized the economy of Bangladesh, Dr. Birupaksha Paul said, the monopoly of the institutions on the question of high profits should be broken. He also thinks that there should be more competition here.
State University of New York Economics Professor and former Chief Economist of Bangladesh Bank, located in Courtland, New York. Pal also felt that the mobile financial system should also be promoted on a priority basis as the remittance sector has been moved to the public interest. It will increase the circulation of money in the country. Then 1 taka will work for 10 taka.
Recently, Dr. Birupaksha Paul said these things in an exclusive interview given to Barta24.com on contemporary issues of the financial sector of Bangladesh. In the first part of the interview, the potential of digital technology in financial services, digital financing, remittances, evaluation of flocks. Ashraful Islam, Planning Editor of Barta24.com spoke.
Barta24.com: Although there are many negative comments about digital financing technologies in making financial services available, ultimately technology is playing a role in diversifying services. What do you think...
Dr. Birupaksha Paul: Of course it is. When I was a university student, a gentleman used to come in the afternoon. He used to bring money orders. If there was a money order of 300 taka, he would pay 200 taka first and then he would break the remaining 100 taka; so that he is given some gratuity. There was news all around that his money was coming.
There was not so much digital technology then. Now we call it 'bkash' or 'Nagad' which revolutionized it. I was interviewed in The Economist about this. Now a rickshaw puller sends money to his relatives and calls them. Although the rate (shipment cost) is still very high. In fact, the rate should be brought down to zero by any means. They should be facilitated in some other way.
'bkash' is allowing this platform to be used. Who are advertising on this platform; Taking a penny from them. Some other payments may also be looked at by the government. If 20 takas are taken from a common man out of 1000 takas, it is a matter of trouble for him. He can buy another thing for Tk.20. It falls under the monopoly of development in the first instance. When I was in Bangladesh Bank, 'bkash' was doing 85% (mobile financing), then other mobile financial institutions came.
What happens in Bangladesh, once a monopoly can be created, it can maintain the monopoly for a long time. On the contrary abroad, when one creates a monopoly, one has to face many challenges. If someone approaches the High Court, it will break the monopoly. Second: If two companies want to merge, the court will look into whether it would create a monopoly or not. There are Anti-Competition Commissions abroad, ours is the Competition Commission. In Australia it is called 'Anti-Competition Commission' (ACC). It means anti-competition. If someone does something they will take action. Whatever you call them, they are very active. The commission that we have, its existence is not felt. It is like the sound of Jibanananda's dew. These institutions are usually headed by retired bureaucrats. A field of rehabilitation is created for them. Retired bureaucrats will also be in Bangladesh Bank, will be in Competition Commission; In the banking division will be on the board of directors, in many important places. That is why Bangladesh is very weak in the innovation index of institutions. Those who run the organization are also weak in the ranking. Bureaucracy-commercialism is on the rise. Their presence is everywhere. Parliament is in their possession. But now that the competition is here, more should come. Money should not be an issue here.
Barta24.com: The system developed with remittance, why could not it be done in internal mobile financing?
Dr. Birupaksha Paul: Expats don't have to pay anything extra to send remittances. They are not surviving! Will definitely survive. Major agency support should be provided. In order for people to get the money easily, as money is created in the economy if money is printed, the more its circulation increases i.e. the velocity increases, the economy becomes stronger. A few hundred years ago it was said in the 'Quantity Theory of Money'. This applies not only to economists but also to astronomy. If Velocity can be increased, then work of 10 takas can be done for 1 rupee. The monetization index seems to be 55 or 60 at most. Monetization is still weak. That is, global financial services can increase monetization, increase the circulation of money, meet people's needs immediately.
Judging by personal experience, I do the ceremony from here, but the money reaches the account in Bangladesh where my brother has it, after the ceremony, the money reaches in seconds. A rickshaw puller drives a rickshaw all day and delivers money to his wife in the evening, which is called 'consumer surplus'. What is the consumer's goal, maximum satisfaction? That is, when overall satisfaction increases, social welfare increases. Inclusion increases. You can live safely in society. It happened, someone in the family was sick, the relative died because the money did not reach on time. But one can safely work in this financial service. It has a sympathetic side. There are psychological aspects. There is the welfare aspect and there is the economic aspect. It is very important. More questions should be totaled.
Barta24.com: How essential will digital technology be to meet the goal of macroeconomics, to transform into a developed country by 2041?
Dr. Birupaksha Paul: On the technical side we must improve. How far behind we are in the Global Technology Index, we have to see. If we lag here, we will not improve. A country is not developed only if the per capita income increases. Suppose oil was found in Yemen today. They increased per capita income by selling oil. Therefore, they will not be a developed country. Gold was suddenly found in Somalia. Even so, they have a lot of mineral resources. By selling gold, their GDP suddenly increased and if you divide the GDP by the per capita income of that country, that country is not developed.
Noted that most of Somalia's population is pirate. There is no civilization there. Injustice, murder - these are intertwined with their identity. Some more indicators are needed to improve. There is education in Europe. Such washing is necessary. A revolution and development is needed through thought. Better lifestyle, mutual compassion, empathy, 'empathy for others' are very important. As we now index happiness, happiness is not just about money. Whether social safety is being ensured here or not, in my society if a girl goes out in the evening and is subjected to torture, it is not a sign of progress. Improvement means rights, court motions. Bangladesh is not far behind in these, it is moving forward. It is said that free media is needed for this.
Amartya Sen said that there is no famine in a country where there is a developed media because, free media reveals many aspects. If they publish the news, the government can take action. Second, the economics of information are very good now. Many are now being awarded Nobel Prizes for their work on information. Knowing information is a big deal. It creates rational expectations.
Barta24.com: We are going through a political aspiration to transform into a developed country. How do you assess its reality?
Dr. Birupaksha Paul: Our Honorable Prime Minister has said about developed countries in 2041. She is a dream woman. She dreams in all directions. When all the engineers said, the subway cannot be done. During his stay at Bangladesh Bank, the Governor Dr. Atiur Rahman I have also done a lot of work on this under his leadership. The engineers said no, but she went ahead. But many advisers around the Prime Minister gave her wrong advice or wrong information.
Why should we be a developed country in 2041! I don't understand it from the point of view of economy. I also wrote about this in the newspaper. Many people on the side of the government have thought that I am a critic. This is not criticism. Economic issues do not go with political enthusiasm. There are many things in politics. Suppose, who is a robber, he is also kind to the society! Even if his character is bad, he is characterful. Be pure like flowers, they can be said!
But there is no place for such hypocrisy in economics. In economics, the numbers come very accurately. Now the GDP of the country has fallen into stagnation. I calculated three years ago, if 9.5 percent growth is assumed, developed countries can be reached by 2041. I suddenly reached and said that I have improved. It is not called progress. There are other social indicators of progress. That's why everyone should watch Satyajit Ray's movie Jalsagar.
Khandani is a zamindar and suddenly there is money and I became a zamindar, Baiji danced and threw money, it doesn't happen. The khandaan practice that we see in Europe or even in Indian civilization, nobility, compassion for people, charity - health improvement, mental improvement, commitment, sense of independence - if these things are not there, we will not be a developed country if we suddenly touch the GDP.
That means we will give up hope! No! We will surely reach many indicators, if not in 2041. At the same time we have lot of uncertainties...Covid comes suddenly or any disaster comes, suddenly earthquake or environmental challenge, what will happen then, which Bangladesh is facing most now! From Dhaka to Chattogram, the weather is the most polluted in the world. No one becomes a big man by suddenly having money in his pocket. If you want to become a big man, you should bring these things: mental temperament, health-education-rich.
These areas are not being nurtured properly. We are only hit by 'GDP-GDP' and 'Per Capita Income'. Recently, devaluation has seen per capita income fall. Now to suppress it, BBS (Bangladesh Bureau of Statistics) said it will publish the money figures. If you do it like this, it won't happen, it won't come in money during the international trial and it will come in dollars.
In this judgment, I will say, to be a better world, we need to make our institutions beautiful, so that we can trust each institution. When we go to the passport office or go to an institution like Rajuk, we can trust that our work will be done. The reality is, we are making progress but at the same time corruption is eating away at us. His reflection is reading in the mirror. Growth is slowing down, not slowing down now. Even in places like the US post-Covid where interest rate hikes peaked (not seen in 30 years), growth is good. Growth is good everywhere. They used to celebrate 1%-2% growth then. At that time we had 7-8% growth but now why we have gone down so much! Corruption has worked here. Large scale money laundering has taken place.
The point I want to come back to is that money laundering is bypassing digitization, we are doing invoicing. Institutional in those places reform is essential. I have written a book, 'Macroeconomics Policy and Institutions for Growth in Bangladesh'. If institutions are not strengthened, if policies are inconsistent, digitization will not work. In that case, digitization will make the thief work. Technology is also in the hands of Somalia. Somalia's technology is helping pirates more than common people. Monkeys don't have to be empowered. Every institution needs to be brought to one place. In order for the anti-corruption commission to work, we are moving from the corruption index, we have to try how to rise to the knowledge economy index. Check out the Innovation Index. These indices will help in multiple ways in financial inclusion and empowerment of the poor. In politics, we say, 'Janadardi', after the election, they are no longer found in the area! These areas need to be worked on collectively. It's like a package of your health, health is good all rounding, but cutting a finger will ruin all performance.
Barta24.com: To what extent have we been able to utilize the potential of digital technology in the financial services sector?
Dr. Birupaksha Paul: Capital is also needed to set up tea shops in villages. Financial inclusion has not worked as it started with the push. He should be given access to credit. They will not come to the capital market because they are all small businesses. Working capital. Bank is the best place for working capital. There are many shortages in these areas. Various NGOs are trying. If we go to a village and take 50 people, work in their employment sector, give them money, 50 people will stand for 40 people. They will stand one more 3 people each. A cement factory man killed 50 people in one day. The benefit is not available from here. For this, alternative uses of funds should be looked at. They should stop being funded randomly even if it is very partial.
It should be seen, how many percent bonds have been issued and how many percent equity is there in the balance sheet. Judgment should be brought according to this financial architecture. We have not yet expanded our expertise in that line. I didn't even make the rules. I did not make any rules because our rules go the other way around. Our directorship is anti-inclusion.
The more diverse directorships a bank has, the better. Coming out of Bangladesh Bank in 2018, when I wrote in the newspaper, here (United States) how an artist was taken in the director body of Worldmart, those who have diverse directorships have the elimination of knowledge, ideas and culture. The more diversity you can go to, the better.
When a University doesn't just take white, it doesn't just take black; Don't take only Indians, don't take only Chinese, don't take only girls or boys. We turn to the homogeneous Society. I see the opposite in Bangladesh, there must be all one type of people in a department. A school should have people of all like-minded politics. We are anti-diversity. This anti-diversity is actually anti-inclusion. Inclusion means inclusion of everything. Why all must be one doctrine! Which party is he in, these things work in Bangladesh? But diversity is sought abroad. Harvard does not buy Harvard products. They will bring from another University. Cultural emigration, in our university, it is decided in advance that we will take this boy, much like 'ghar jamai'. And this "husband-in-law" cannot rebound very much. 'Gharjamai' cannot stand straight.
If things are not done culturally, there will be no effective results. I understood in Western culture, their tolerance and opinion of diversity. I will correct assessment during assessment. And if I speak against someone in the boardroom, they will go and speak against me the next day. I am not taking responsibility for that.
Vidyasagar said, "Bengali is useless character". We have corrupted our system. Destroyed the competition by hand. Different types of refineries...are also developed by big people in India but there is a corporate structure. They have contributions. Very big a few days ago BATA was done. How many people have they given employment! 'Diversity Strength Diversity'! Cultural diversity, religious diversity, opinion diversity, gender diversity - we have to gain strength through these.
Where is the power of America! America is really no man's land. Cultural diversity, religious diversity - the country gains strength through these. A country of all migrants. If there was no diversity among these migrants, so much would have been possible! Their strength is talent, but they are the number one country in the global index. Knowledge is what makes them strong.
Economist David Romer said, 'It was once thought that rich countries would never get rich. Has become saturated'. But they get rich again. Why is that! Everything has a termination mark on the labor. Knowledge has no diminishing returns.
The United States can be considered as an example that knowledge makes people so powerful. Whenever America collapses, the tech companies pull it up; Apple-Amazon-Silicon Valley pulls it up because, with knowledge they can amplify a lot. Horse power can be greatly increased. That place needs to be practiced.
What we understand, let's do it with honesty? The empowerment of the poor will not be just spoken! Empowerment of women in society. That way the poor are not empowered. That's why a minister said, for 25 thousand takas we handcuff the farmer for this but the one who took 25 thousand crore taka is not prosecuted. 16 years have passed since the trial. In these 16 years another 25 thousand crore takas were smuggled out. He went abroad the day before the verdict. This is the reality!
