Eminent economist Dr. Birupaksha Paul remarked that despite the considerable hype surrounding digitization, progress has not matched expectations. He pointed out that Bangladesh trails behind India in this domain and even lags behind Nepal in terms of internet access. Dr. Paul emphasized that the actual progress doesn't align with the loud drumbeats of publicity.

Dr. Birupaksha Paul, an economics professor at the State University of New York and former chief economist of Bangladesh Bank, asserts that Bangladesh's macroeconomic development hinges on knowledge integration preceding economic integration. He further emphasizes that the appointment of a knowledgeable or innovative individual as the head of a financial institution is crucial, as failure to do so may lead to bureaucratic processes dominating decision-making.

In a recent exclusive interview with Barta24.com, Dr. Paul addressed various contemporary issues within Bangladesh's financial sector. The second part of the interview focused on topics such as leadership within top financial institutions, the inclusion of marginalized individuals in financial activities, the risks associated with digitization in the financial sector, and strategies for transitioning. The interview was conducted by Ashraful Islam, Planning Editor of Barta24.com.

Barta24.com: When discussing leadership within the country's top financial institutions amidst the era of technological dominance, what aspect should be given serious consideration?

Birupaksha Paul: During my tenure at Bangladesh Bank, Governor Dr. Atiur Rahman championed a modern, digitally-driven approach. He believed that modern technology has the power to empower the poor, citing examples such as farmers using cellphones to sell produce and access market information. This empowerment extends from digitization to both financial and physical inclusion. Dr. Atiur Rahman's visionary leadership led Bangladesh Bank to receive prestigious awards such as the Green Bank and Digitalized Bank accolades. While awards are not the sole measure of success, they signify the strides made under his tenure.

Unlike some instances where awards didn't correlate with economic performance, Bangladesh Bank's recognitions reflected genuine achievements. Anecdotes about Dr. Rahman's determination, such as his reaction to seeing towering files at a bank, highlight his commitment to modernizing processes. It underscores his proactive approach to addressing challenges and driving innovation within the financial sector. Indeed, passion is crucial. A bureaucrat might simply follow protocol, focusing on the contents of circulars rather than envisioning transformative change. Conversely, when an innovative leader takes the helm, significant shifts occur. This phenomenon is evident globally. Failure to appoint a knowledgeable or innovative individual to lead institutions like Bangladesh Bank may result in bureaucratic stagnation rather than progress.

Barta24.com: Tell us about your experience as Chief Economist of Bangladesh Bank.

Birupaksha Paul: I teach in the United States, where modern advancements, including the integration of artificial intelligence, are embraced. Bringing these ideas and practices to Bangladesh was successful, as they resonated with the leadership at the time, particularly with Governor Dr. Atiur Rahman. Despite not being from a bureaucratic background myself, our shared forward-thinking mindset facilitated a strong partnership. Dr. Rahman's non-bureaucratic background further enhanced our compatibility in driving innovative changes within Bangladesh Bank. It seems that Dr. Rahman may have encountered unexpected challenges, possibly related to international digitization. Despite his best efforts, such as modernizing Bangladesh Bank, he faced setbacks, including potential cyber threats. However, it's essential to recognize that not all his actions should be deemed failures because of these challenges. While the current situation might be calmer, it underscores the complexities and risks inherent in navigating the digital landscape.

Barta24.com: The recent stagnation in Bangladesh's progress on the Financial Inclusion Index contrasts with the rapid advancements observed previously.

Birupaksha Paul: There was optimism about the country's economic position, prompting discussions, including with Bangladesh Bank, about the potential for issuing credit cards to stimulate consumption. However, despite initial considerations, this proposal did not materialize. While other nations have implemented similar measures for higher-income individuals, the idea faced obstacles in Bangladesh and was ultimately not implemented. Sajeeb Wazed Joy, as the son of the current Prime Minister and her ICT advisor, possesses a strong drive and understanding of the new generation. He advocates for digitization as a means to achieve greater societal inclusion. However, despite the hype surrounding digitization efforts, Bangladesh still lags behind India in this regard and even trails countries like Nepal in terms of internet access. Despite the increasing noise, tangible progress remains elusive, a sentiment echoed by practical experience.

Barta24.com: The digital system has played a significant role in integrating marginalized individuals into Bangladesh's economy through financial activities. Can you share more about your experience with this?

Birupaksha Paul: The digital system is indeed making a significant contribution to the financial empowerment of marginalized individuals by providing them with access to financial services. With everything accessible on a single phone, individuals can easily access information such as current reserves and currency rates. However, despite these advancements, inclusive banking remains essential for fostering an inclusive economy. Unlike in some countries where even elderly individuals can buy stocks from home, Bangladesh's capital market still lacks such accessibility and development.

Indeed, finance comprises two key sectors: banking and capital markets. Unlike in America, where significant development has occurred in both sectors, in European and subcontinental countries, if the banking system fails to be inclusive, it may become exclusive, benefiting only a select few. This exclusivity undermines the creation of a truly inclusive economy. Evidence suggests that despite advancements, a significant portion of deposits is dominated by the wealthy, indicating a lack of inclusivity. It's disheartening that 47% of adults remain unbanked. Regarding Dr. Atiur Rahman's efforts, criticism is not uncommon, even in developed nations. For instance, President Obama faced ridicule for his push for universal health insurance, often mocked as "Obama care."

However, as President Clinton noted, there's nothing ironic about providing compassion through such initiatives. Similarly, criticisms were voiced regarding the concept of the 10 taka account, with some arguing that it failed to truly integrate farmers and marginalized individuals into the banking system. Instead, it left half of the population excluded from banking services, highlighting the lack of inclusivity in both banking and credit distribution.

The focus should be on ensuring equitable access to finance and banking services, as some individuals continue to amass significant wealth while many others remain underserved. The discriminatory distribution of credit prevents individuals, such as those starting small businesses like bakeries, from accessing the necessary loan support. This lack of inclusive credit distribution hinders our society's progression towards truly inclusive economic growth. The slowdown in growth, from 8 percent to 5 percent, reflects this challenge. Achieving robust economic growth requires an inclusive approach that supports and empowers all segments of society.

Barta24.com: How can the crisis be overcome?

Dr. Birupaksha Paul: Implementing reforms in the economy is crucial to inject fresh momentum. While the banking sector has traditionally held significant importance, recent remarks by economist Wahiduddin Mahmud describe it as "bleeding in the heart." However, it's essential to recognize that the heart of the issue lies within two sectors: banking and the capital market. The deficiencies in the capital market, coupled with a lack of accountability for wrongdoing, have eroded public confidence in it. The perpetrators of financial misconduct typically avoid the capital market due to its transparency requirements, such as holding annual general meetings (AGMs) and being accountable to shareholders. These structures foster accountability and development within the corporate sector.

However, within the banking sector, accountability is often lacking. Depositors and borrowers remain disconnected, with no direct accountability between them. Without reforms in these areas, such as enhancing accountability and transparency within banks, our growth prospects will be severely hindered.

Barta24.com: What risks do you foresee in the digitalization of the financial sector?

Dr. Birupaksha Paul: Firstly, it's crucial to recognize that technology knows no boundaries; it operates on a global scale. As such, Bangladesh must be prepared to manage its share of global risks. Just as universities understand the risks inherent in their work and invest in protections, countries like the United States also allocate significant resources to combat hackers and ensure cybersecurity. Similarly, investing in anti-piracy measures is essential for safeguarding ships. Unfortunately, this level of preparedness is often overlooked in Bangladesh, leading to vulnerabilities.

The recent incident involving the theft from Bangladesh Bank's reserves tarnished the reputation of esteemed individuals like Atiur Rahman. Some bureaucrats may argue that academics are ill-suited for such roles, but examples from around the world, particularly in the United States, demonstrate the positive contributions academics can make. Individuals like Bendamon, recruited from institutions like Princeton and Harvard, have held key positions in Bangladesh's central bank and government, highlighting the importance of appointing knowledgeable individuals to lead.

Companies often appoint CEOs and MDs based on their expertise and global experience, as demonstrated by many Indians leading American companies. However, in Bangladesh, we face challenges in finding qualified individuals due to a focus on loyalty over merit. Without proper protection and forward-thinking leadership, we fail to address critical issues such as environmental sustainability and urban planning. While Bangladesh struggles with a maze of wires and cluttered cities, Singapore exemplifies orderliness and strict regulations.

For instance, chewing gum is banned in Singapore, and the country has swift justice for drug offenses. Failing to prioritize such aspects can impede long-term growth and prosperity. During our period of high growth, countries like India experienced impressive economic expansion, with experts like Kaushik Bose describing India as a "sweet spot." While we may not need to emulate every aspect of India's economic model, there's value in adopting successful strategies. Despite India's size and complexity, smaller nations like Bangladesh have the advantage of agility and can implement reforms quickly. Just as Singapore surpassed Malaysia by leveraging its strengths, Bangladesh has untapped opportunities to enhance efficiency and inclusivity through initiatives like digitizing land records and expanding financial inclusion.

Such measures can mitigate injustices and improve access to information. However, challenges persist, as illustrated by the story of a villager who lost access to government funds after losing their phone. Without adequate safeguards in place, vulnerable individuals face hardships. Just as the proliferation of liquor stores in Europe led to an increase in funeral homes, our society must prioritize long-term planning and compassion to address systemic issues and ensure a brighter future for all.

Barta24.com: Many attribute the hacking incident at Bangladesh Bank to the vulnerabilities associated with digitization. Should we reconsider our approach to digitization in light of this assessment?

Dr. Birupaksha Paul: It's concerning that while we invest in various packages from Neelkhet, we neglect to prioritize purchasing antivirus software. The amount stolen by hackers, around 660-664 crores, is significant, but it pales in comparison to the larger sums that flow through banks daily. During Dr. Atiur Rahman's tenure, defaults amounted to 60 thousand crore taka, but under current circumstances, it has escalated to one and a half lakh crore taka. It appears that some bureaucrats are exaggerating the impact of the hacking incident. Due to the hacking incident being discussed in a New York court and delays in the CID of Bangladesh submitting its report, the truth behind the matter remains obscured. This delay has created a situation where individuals either face unwarranted blame and consequences or evade accountability altogether. It's crucial to identify those responsible and address any underlying issues contributing to these delays. If Bangabandhu's daughter hadn't come to power and prolonged the trial, it might not have happened at all. While there's an ongoing international process regarding the money stolen by hackers, it's imperative to ensure that capable individuals lead the efforts.

Loyalty alone should not be the criteria for appointing individuals, as it can sometimes overshadow other important qualities such as morals and academic skills. There's a cautionary tale about the dangers of blind loyalty, illustrated by the story of a pet monkey overzealously trying to eliminate mosquitoes and accidentally harming the king. Leadership positions in institutions like Bangladesh Bank should be filled based on merit, not just ranking. It's concerning that Bangladesh has been singled out for corruption rankings among 190 countries worldwide. While some may attribute this to conspiracy theories, it's crucial to focus on accountability rather than deflecting responsibility. Introducing a culture of ethical conduct and knowledge-based decision-making is essential in such institutions. Prioritizing knowledge inclusion is crucial before achieving financial inclusion, ensuring that our talented individuals remain in the country and are incentivized to contribute to its growth. Additionally, measures should be taken to encourage talented individuals abroad to return and contribute to the nation's development.

Unfortunately, there's a tendency among some to adopt a "third class railway passenger" mentality, where individuals resist others from advancing, akin to blocking the train's doorway and preventing others from boarding. This mindset hampers progress and must be addressed to foster a more inclusive and collaborative society.

Barta24.com: Are we considering moving away from digitization due to concerns about hacking?

Dr. Birupaksha Paul: In Bangladesh, when weavers lose their jobs due to mechanization, they often accept it without protest, even though the machines continue to operate. In contrast, in America, I've observed efficient systems where artificial intelligence scans customers at multiple counters simultaneously. However, some may resist technological advancements, akin to the mentality of "Nandalal" or "Devdas," clinging to the past rather than embracing change. Regarding the Padma Bridge project, while there's genuine concern for those affected by its construction, sailors must also adapt to evolving circumstances and consider transitioning to other professions. This reflects the inevitability of change in the world.

Edited by: Mahmood Menon, Editor-at-large, Barta24.com

Eminent economist Dr. Birupaksha Paul remarked that despite the considerable hype surrounding digitization, progress has not matched expectations. He pointed out that Bangladesh trails behind India in this domain and even lags behind Nepal in terms of internet access. Dr. Paul emphasized that the actual progress doesn't align with the loud drumbeats of publicity. 

Dr. Birupaksha Paul, an economics professor at the State University of New York and former chief economist of Bangladesh Bank, asserts that Bangladesh's macroeconomic development hinges on knowledge integration preceding economic integration. He further emphasizes that the appointment of a knowledgeable or innovative individual as the head of a financial institution is crucial, as failure to do so may lead to bureaucratic processes dominating decision-making. 

In a recent exclusive interview with Barta24.com, Dr. Paul addressed various contemporary issues within Bangladesh's financial sector. The second part of the interview focused on topics such as leadership within top financial institutions, the inclusion of marginalized individuals in financial activities, the risks associated with digitization in the financial sector, and strategies for transitioning. The interview was conducted by Ashraful Islam, Planning Editor of Barta24.com. 

Barta24.com: When discussing leadership within the country's top financial institutions amidst the era of technological dominance, what aspect should be given serious consideration? 

Birupaksha Paul: During my tenure at Bangladesh Bank, Governor Dr. Atiur Rahman championed a modern, digitally-driven approach. He believed that modern technology has the power to empower the poor, citing examples such as farmers using cellphones to sell produce and access market information. This empowerment extends from digitization to both financial and physical inclusion. Dr. Atiur Rahman's visionary leadership led Bangladesh Bank to receive prestigious awards such as the Green Bank and Digitalized Bank accolades. While awards are not the sole measure of success, they signify the strides made under his tenure. 

Unlike some instances where awards didn't correlate with economic performance, Bangladesh Bank's recognitions reflected genuine achievements. Anecdotes about Dr. Rahman's determination, such as his reaction to seeing towering files at a bank, highlight his commitment to modernizing processes. It underscores his proactive approach to addressing challenges and driving innovation within the financial sector. Indeed, passion is crucial. A bureaucrat might simply follow protocol, focusing on the contents of circulars rather than envisioning transformative change. Conversely, when an innovative leader takes the helm, significant shifts occur. This phenomenon is evident globally. Failure to appoint a knowledgeable or innovative individual to lead institutions like Bangladesh Bank may result in bureaucratic stagnation rather than progress.

Barta24.com: Tell us about your experience as Chief Economist of Bangladesh Bank.

Birupaksha Paul: I teach in the United States, where modern advancements, including the integration of artificial intelligence, are embraced. Bringing these ideas and practices to Bangladesh was successful, as they resonated with the leadership at the time, particularly with Governor Dr. Atiur Rahman. Despite not being from a bureaucratic background myself, our shared forward-thinking mindset facilitated a strong partnership. Dr. Rahman's non-bureaucratic background further enhanced our compatibility in driving innovative changes within Bangladesh Bank. It seems that Dr. Rahman may have encountered unexpected challenges, possibly related to international digitization. Despite his best efforts, such as modernizing Bangladesh Bank, he faced setbacks, including potential cyber threats. However, it's essential to recognize that not all his actions should be deemed failures because of these challenges. While the current situation might be calmer, it underscores the complexities and risks inherent in navigating the digital landscape.

Barta24.com: The recent stagnation in Bangladesh's progress on the Financial Inclusion Index contrasts with the rapid advancements observed previously. 

Birupaksha Paul: There was optimism about the country's economic position, prompting discussions, including with Bangladesh Bank, about the potential for issuing credit cards to stimulate consumption. However, despite initial considerations, this proposal did not materialize. While other nations have implemented similar measures for higher-income individuals, the idea faced obstacles in Bangladesh and was ultimately not implemented. Sajeeb Wazed Joy, as the son of the current Prime Minister and her ICT advisor, possesses a strong drive and understanding of the new generation. He advocates for digitization as a means to achieve greater societal inclusion. However, despite the hype surrounding digitization efforts, Bangladesh still lags behind India in this regard and even trails countries like Nepal in terms of internet access. Despite the increasing noise, tangible progress remains elusive, a sentiment echoed by practical experience.

Barta24.com: The digital system has played a significant role in integrating marginalized individuals into Bangladesh's economy through financial activities. Can you share more about your experience with this? 

Birupaksha Paul: The digital system is indeed making a significant contribution to the financial empowerment of marginalized individuals by providing them with access to financial services. With everything accessible on a single phone, individuals can easily access information such as current reserves and currency rates. However, despite these advancements, inclusive banking remains essential for fostering an inclusive economy. Unlike in some countries where even elderly individuals can buy stocks from home, Bangladesh's capital market still lacks such accessibility and development. 

Indeed, finance comprises two key sectors: banking and capital markets. Unlike in America, where significant development has occurred in both sectors, in European and subcontinental countries, if the banking system fails to be inclusive, it may become exclusive, benefiting only a select few. This exclusivity undermines the creation of a truly inclusive economy. Evidence suggests that despite advancements, a significant portion of deposits is dominated by the wealthy, indicating a lack of inclusivity. It's disheartening that 47% of adults remain unbanked. Regarding Dr. Atiur Rahman's efforts, criticism is not uncommon, even in developed nations. For instance, President Obama faced ridicule for his push for universal health insurance, often mocked as "Obama care." 

However, as President Clinton noted, there's nothing ironic about providing compassion through such initiatives. Similarly, criticisms were voiced regarding the concept of the 10 taka account, with some arguing that it failed to truly integrate farmers and marginalized individuals into the banking system. Instead, it left half of the population excluded from banking services, highlighting the lack of inclusivity in both banking and credit distribution. 

The focus should be on ensuring equitable access to finance and banking services, as some individuals continue to amass significant wealth while many others remain underserved. The discriminatory distribution of credit prevents individuals, such as those starting small businesses like bakeries, from accessing the necessary loan support. This lack of inclusive credit distribution hinders our society's progression towards truly inclusive economic growth. The slowdown in growth, from 8 percent to 5 percent, reflects this challenge. Achieving robust economic growth requires an inclusive approach that supports and empowers all segments of society. 

Barta24.com: How can the crisis be overcome?

Dr. Birupaksha Paul: Implementing reforms in the economy is crucial to inject fresh momentum. While the banking sector has traditionally held significant importance, recent remarks by economist Wahiduddin Mahmud describe it as "bleeding in the heart." However, it's essential to recognize that the heart of the issue lies within two sectors: banking and the capital market. The deficiencies in the capital market, coupled with a lack of accountability for wrongdoing, have eroded public confidence in it. The perpetrators of financial misconduct typically avoid the capital market due to its transparency requirements, such as holding annual general meetings (AGMs) and being accountable to shareholders. These structures foster accountability and development within the corporate sector.

However, within the banking sector, accountability is often lacking. Depositors and borrowers remain disconnected, with no direct accountability between them. Without reforms in these areas, such as enhancing accountability and transparency within banks, our growth prospects will be severely hindered. 

Barta24.com: What risks do you foresee in the digitalization of the financial sector? 

Dr. Birupaksha Paul: Firstly, it's crucial to recognize that technology knows no boundaries; it operates on a global scale. As such, Bangladesh must be prepared to manage its share of global risks. Just as universities understand the risks inherent in their work and invest in protections, countries like the United States also allocate significant resources to combat hackers and ensure cybersecurity. Similarly, investing in anti-piracy measures is essential for safeguarding ships. Unfortunately, this level of preparedness is often overlooked in Bangladesh, leading to vulnerabilities. 

The recent incident involving the theft from Bangladesh Bank's reserves tarnished the reputation of esteemed individuals like Atiur Rahman. Some bureaucrats may argue that academics are ill-suited for such roles, but examples from around the world, particularly in the United States, demonstrate the positive contributions academics can make. Individuals like Bendamon, recruited from institutions like Princeton and Harvard, have held key positions in Bangladesh's central bank and government, highlighting the importance of appointing knowledgeable individuals to lead. 

Companies often appoint CEOs and MDs based on their expertise and global experience, as demonstrated by many Indians leading American companies. However, in Bangladesh, we face challenges in finding qualified individuals due to a focus on loyalty over merit. Without proper protection and forward-thinking leadership, we fail to address critical issues such as environmental sustainability and urban planning. While Bangladesh struggles with a maze of wires and cluttered cities, Singapore exemplifies orderliness and strict regulations. 

For instance, chewing gum is banned in Singapore, and the country has swift justice for drug offenses. Failing to prioritize such aspects can impede long-term growth and prosperity. During our period of high growth, countries like India experienced impressive economic expansion, with experts like Kaushik Bose describing India as a "sweet spot." While we may not need to emulate every aspect of India's economic model, there's value in adopting successful strategies. Despite India's size and complexity, smaller nations like Bangladesh have the advantage of agility and can implement reforms quickly. Just as Singapore surpassed Malaysia by leveraging its strengths, Bangladesh has untapped opportunities to enhance efficiency and inclusivity through initiatives like digitizing land records and expanding financial inclusion. 

Such measures can mitigate injustices and improve access to information. However, challenges persist, as illustrated by the story of a villager who lost access to government funds after losing their phone. Without adequate safeguards in place, vulnerable individuals face hardships. Just as the proliferation of liquor stores in Europe led to an increase in funeral homes, our society must prioritize long-term planning and compassion to address systemic issues and ensure a brighter future for all. 

Barta24.com: Many attribute the hacking incident at Bangladesh Bank to the vulnerabilities associated with digitization. Should we reconsider our approach to digitization in light of this assessment? 

Dr. Birupaksha Paul: It's concerning that while we invest in various packages from Neelkhet, we neglect to prioritize purchasing antivirus software. The amount stolen by hackers, around 660-664 crores, is significant, but it pales in comparison to the larger sums that flow through banks daily. During Dr. Atiur Rahman's tenure, defaults amounted to 60 thousand crore taka, but under current circumstances, it has escalated to one and a half lakh crore taka. It appears that some bureaucrats are exaggerating the impact of the hacking incident. Due to the hacking incident being discussed in a New York court and delays in the CID of Bangladesh submitting its report, the truth behind the matter remains obscured. This delay has created a situation where individuals either face unwarranted blame and consequences or evade accountability altogether. It's crucial to identify those responsible and address any underlying issues contributing to these delays. If Bangabandhu's daughter hadn't come to power and prolonged the trial, it might not have happened at all. While there's an ongoing international process regarding the money stolen by hackers, it's imperative to ensure that capable individuals lead the efforts. 

Loyalty alone should not be the criteria for appointing individuals, as it can sometimes overshadow other important qualities such as morals and academic skills. There's a cautionary tale about the dangers of blind loyalty, illustrated by the story of a pet monkey overzealously trying to eliminate mosquitoes and accidentally harming the king. 
Leadership positions in institutions like Bangladesh Bank should be filled based on merit, not just ranking. It's concerning that Bangladesh has been singled out for corruption rankings among 190 countries worldwide. While some may attribute this to conspiracy theories, it's crucial to focus on accountability rather than deflecting responsibility. Introducing a culture of ethical conduct and knowledge-based decision-making is essential in such institutions. Prioritizing knowledge inclusion is crucial before achieving financial inclusion, ensuring that our talented individuals remain in the country and are incentivized to contribute to its growth. Additionally, measures should be taken to encourage talented individuals abroad to return and contribute to the nation's development. 

Unfortunately, there's a tendency among some to adopt a "third class railway passenger" mentality, where individuals resist others from advancing, akin to blocking the train's doorway and preventing others from boarding. This mindset hampers progress and must be addressed to foster a more inclusive and collaborative society. 

Barta24.com: Are we considering moving away from digitization due to concerns about hacking?

Dr. Birupaksha Paull: In Bangladesh, when weavers lose their jobs due to mechanization, they often accept it without protest, even though the machines continue to operate. In contrast, in America, I've observed efficient systems where artificial intelligence scans customers at multiple counters simultaneously. However, some may resist technological advancements, akin to the mentality of "Nandalal" or "Devdas," clinging to the past rather than embracing change. Regarding the Padma Bridge project, while there's genuine concern for those affected by its construction, sailors must also adapt to evolving circumstances and consider transitioning to other professions. This reflects the inevitability of change in the world.

Renowned economist Dr Birupaksha Paul emphasised the need to break the monopoly in the mobile financial service (MFS) sector in order to enhance the circulation of money.

He acknowledged the transformative impact of MFS providers like bKash and Nagad on the economy of Bangladesh but stressed that their monopolistic practices, which contribute to their significant profits, must be dismantled to promote greater velocity of money.

Birupaksha Paul, a former Chief Economist of Bangladesh Bank and Economics Professor at the State University of New York in Courtland, recently shared these insights in an exclusive interview with Barta24.com, focusing on contemporary issues within Bangladesh's financial sector.

The discussion encompassed the potential of digital technology in financial services, digital financing, remittances, and the assessment of current trends. Ashraful Islam, Planning Editor of Barta24.com, facilitated the conversation.

Dr Paul suggested that the development of the mobile financial service sector should strive to reach the level that the remittance sector has seen through its portrayal as a matter of public interest. He believes that this advancement will enhance the velocity of money, allowing a one-taka note to generate value equivalent to Tk10.

He also advocates for increased competition for the development of the mobile financial sector.

The first part of the interview with Birupaksha Paul unfolds as follows:

Barta24.com: Despite some negative feedback regarding digital financing technologies, they undeniably contribute to diversifying financial services. What's your take on this?

Dr. Birupaksha Paul: Absolutely, technology has played a pivotal role. Back when I was a university student, I recall a gentleman who used to deliver money orders in the afternoons. He'd hand over a portion of the amount upfront, keeping some as gratuity. People eagerly awaited his arrival for news of their money orders.

Back then, digital technology wasn't as prevalent. Now, platforms like 'bkash' and 'Nagad' have revolutionised the process. I even discussed this in an interview with The Economist. Today, even a rickshaw puller can easily send money to their relatives and notify them. However, the transaction costs remain high, which needs addressing. Ideally, these costs should be brought down to zero, exploring alternative means to benefit the MFS service providers.

Institutions like 'bKash' already generate revenue through advertisements on their platforms. The government may consider exploring alternative revenue streams for them.

If a common man is charged Tk20 for a transaction of Tk1000, it poses a difficulty for him. With that Tk20, he could purchase another essential product. Every taka matters, especially to the common man.

During my tenure at the Bangladesh Bank, 'bkash' dominated 85% of the mobile financing landscape before other competitors emerged.

In Bangladesh, once a monopoly is established, it tends to persist for a prolonged period. Conversely, abroad, creating a monopoly often faces numerous challenges. High Court intervention can break a monopoly, and court scrutiny is involved in potential mergers to prevent monopolistic outcomes.

Unlike many countries with robust Anti-Competition Commissions, our Competition Commission lacks visibility and effectiveness. It is often led by retired bureaucrats, which contributes to institutional weaknesses in innovation index rankings.

Barta24.com: Why hasn't the system developed for remittance been replicated in internal mobile financing?

Dr. Birupaksha Paul: Unlike expats, who don't incur extra costs when sending remittances, internal mobile financing lacks similar efficiency. To facilitate easier access to funds domestically, substantial agency support is crucial. Increasing the circulation of money, as advocated in the Quantity Theory of Money, strengthens the economy. By boosting monetisation and velocity, consumers can meet immediate needs and enhance overall satisfaction and social welfare.

Personal experiences highlight the swift transfer of funds, exemplifying the convenience and benefits of efficient financial services. For individuals like rickshaw pullers, who rely on timely transactions to support their families, these services provide invaluable consumer surplus. Ensuring timely access to funds can prevent tragic consequences, promoting safety and well-being within society.

Beyond economic benefits, these financial services offer psychological and welfare advantages, underlining their significance in enhancing inclusion and overall societal welfare. It's imperative to delve deeper into these topics to fully understand their impact and potential.

Barta24.com: How crucial will digital technology be in achieving the macroeconomic goal of transforming into a developed country by 2041?

Dr. Birupaksha Paul: Technological advancement is imperative for progress. We must assess our position in the Global Technology Index to gauge our advancement. Mere increases in per capita income do not guarantee development, as evidenced by cases like Yemen and Somalia, where sudden resource discoveries did not translate to overall development due to underlying societal issues. Development requires a multifaceted approach, encompassing education, societal values, and governance.

Enhancing social safety, promoting justice, and fostering empathy are vital components of progress. Amartya Sen highlights the importance of a free media in preventing famines and fostering accountability. Furthermore, advancements in information economics contribute to rational decision-making and expectations. Thus, digital technology serves as a catalyst for comprehensive development and societal progress.

Barta24.com: We're witnessing a political aspiration to transition into a developed country. How do you assess its feasibility?

Dr. Birupaksha Paul: Our esteemed Prime Minister envisions a developed country by 2041, displaying remarkable foresight and determination. Despite skepticism from engineers, she pressed forward with projects like the subway, illustrating her resolve. However, many advisers surrounding the prime minister provide her with incorrect advice and misinformation.

From an economic standpoint, the timeline for achieving developed status seems ambitious. Economic realities demand more than just political enthusiasm. While GDP growth is a crucial metric, it's not the sole indicator of development. Social indicators and values, depicted eloquently in Satyajit Ray's film "Jalsaghar," are equally significant. 

Sudden wealth doesn't equate to nobility or progress. True development requires investments in mental and physical health, education, and social welfare. Bangladesh faces various challenges, including environmental degradation and health crises like Covid-19. Prioritizing holistic development over solely economic gains is essential.

Relying solely on GDP and per capita income metrics is shortsighted. Recent devaluation has affected per capita income, necessitating a broader perspective on development beyond monetary figures. Addressing these challenges requires a comprehensive approach and a focus on sustainable growth, rather than quick fixes.

In striving for a better world, we must prioritize the beautification and strengthening of our institutions to foster trust and reliability. Whether it's visiting the passport office or dealing with agencies like Rajuk, the public should have confidence that their affairs will be handled efficiently and transparently. Despite progress, corruption remains a persistent issue, eroding our advancements and hindering growth.

Even amidst challenges like Covid-19, countries like the US have managed to sustain growth, demonstrating the importance of effective governance and institutional integrity. However, in Bangladesh, corruption has impeded our potential, leading to a decline in growth and enabling large-scale money laundering.

It's crucial to address institutional weaknesses and ensure consistency in policies to maximize the benefits of digitisation. Merely adopting technology without strengthening institutions risks empowering wrongdoers rather than benefiting society. We must focus on comprehensive reforms and prioritise the fight against corruption, shifting our focus from corruption indices to knowledge economy indices and innovation rankings.

These efforts will not only enhance financial inclusion but also empower the marginalised segments of society. Political rhetoric must be backed by sustained action, with a collective effort to address systemic issues. Just as in healthcare, where overall well-being is vital, a single weak link can compromise the entire system's performance. Therefore, holistic improvements across all sectors are imperative for sustainable progress and prosperity.

Barta24.com: How effectively have we harnessed the potential of digital technology in the financial services sector?

Dr. Birupaksha Paul: Access to capital is essential even for setting up small tea shops in villages. However, financial inclusion efforts have fallen short in providing access to credit, particularly for small businesses. Many NGOs attempt to address this gap, but challenges persist, including issues with fund allocation and financial architecture.

A critical aspect to consider is the balance between bonds and equity in financial institutions' balance sheets. Unfortunately, our financial regulations often hinder rather than facilitate inclusive practices. Diverse directorships in banks and financial institutions can bring valuable perspectives and ideas, yet we often lack diversity in leadership roles, which hampers innovation and inclusivity.

Contrary to international norms that value diversity, Bangladesh tends to favor homogeneity, whether in educational institutions or workplaces. This aversion to diversity undermines inclusion efforts and stifles creativity. Cultural biases and nepotism further exacerbate these challenges, hindering progress and effective decision-making.

Cultural shifts are necessary to embrace diversity and foster an environment of tolerance and acceptance. Without addressing these cultural barriers, achieving meaningful progress in financial inclusion and innovation will remain elusive. It's crucial to recognise and challenge these biases to create a more inclusive and dynamic financial sector.

While India has also seen the rise of wealthy individuals, their success is rooted in a corporate structure with contributions from various sectors, benefiting society at large. Recent achievements, such as the success of BATA, highlight the employment opportunities created by embracing diversity—whether cultural, religious, or gender-based.

The strength of America lies in its cultural and religious diversity, which fuels innovation and progress. Despite challenges, America's resilience stems from its knowledge-driven economy, as noted by economist David Romer. Unlike physical resources, knowledge yields endless possibilities, exemplified by the tech giants that consistently lift the country's economy.

However, progress must be genuine, not just rhetoric. True empowerment of the poor requires tangible actions, not just words. Sadly, our justice system often fails to hold the powerful accountable, allowing corruption to persist unchecked. The stark reality is that while small-time offenders face punishment, those responsible for massive financial crimes evade justice, further exacerbating inequality and injustice.

Edited by: Mahmood Menon, Editor-at-large, Barta24.com

The tug of war was going on for a long time, pulling towards everyone. But now it is known that pushing is going on, one side is pushing the other side. According to responsible sources, this is exactly what is going on with the Matarbari deep sea port. This push is going on between Coal Power Generation Company and Chattogram Port Authority.

The formal handover process of the seaport has been pending for several months, despite the agreement on paper under pressure. Chattogram Port Authority (CPA) is not responding despite repeated letters. As a result, there is no transfer. Responsible sources of the Power division of the Ministry of Power and Energy said this.

According to sources, a proposal was made earlier to make a channel for the Matarbari coal-based power project to facilitate the movement of coal-carrying lighter age ships. At that time, there was a tug of war between India and China over Sonadia deep sea port. The Prime Minister's Office was asked to propose the construction of a deep sea port against the proposal of the Coal Power Generation Company. In view of that, the navigability was increased to 18.5 meters.

Coal Power Generation Company completed the construction of channel and jetty as usual. It was informally inaugurated on 29 December 2020. The first deep sea port in Bangladesh started with the coal-carrying ship of Matarbari Power Plant. On November 16, 2022, a meeting was held for the transfer of Matarbari channel and dividend distribution under the chairmanship of the Principal Secretary of the Prime Minister's Office. In that meeting, it was decided to transfer by June last year (2023).

On paper, Matarbari Channel was handed over to Chattogram Port Authority on September 20, 2023. The Chattogram Port Authority did not accept the charge even though it was understood on paper. But CPA is taking the charge of using the port right.

At the time of acceptance on paper, it was said that the charge would be accepted after verifying the validity. A letter was sent to CPA on 22 January 2024 seeking a representative for the inspection. Even after a few weeks, CPA has not responded to that letter or sent a representative. On February 14, the demand letter was again issued by the Power Division. Still, there was no response from CPA.

The letter of the Power Division also said that the responsibility of the EPC contractor will end after the completion of the joint survey as per the contract. Later the EPC contractor will have to pay demurrage if asked for dredging or other works. It will waste a lot of money of the state and if proper maintenance is not done, the navigability will decrease due to sedimentation again.

A letter is issued to send a representative and take necessary measures to convey the proximity of the CPA for management and maintenance. The letter signed by the Joint Secretary Tahmina Begum was sent to the Senior Secretary of the Ministry of Shipping. Still there was no solution. Even though it has been a long time, the process of transfer of charges is hanging due to the negligence of the port authorities.

And this has become a burden on the Coal Power Generation Company. They have to be guarded by 20-30 security personnel. Again due to lack of regular maintenance, it is feared that silting will create a crisis. Dredging has already been done by spending several crores of money.

Chattogram Port Authority Secretary Md. Omar Farooq, when called, avoided saying that he was in a meeting.