International development partners have expressed confidence in the government’s strategy to revive Bangladesh’s fragile economy, inherited from the previous administration, Finance and Planning Adviser Professor Dr Rashed Al Mahmud Titumir said today.
Speaking to journalists on the sidelines of the annual meetings of the International Monetary Fund (IMF) and the World Bank Group, Titumir said discussions with the World Bank, IMF, US Treasury Department and other multilateral institutions had reflected a shared understanding of Bangladesh’s economic challenges and the government’s plans to address them.
He said the discussions had focused on three key areas: restoring an economy weakened by structural problems through transparency and accountability, addressing renewed inflationary pressures stemming from the Middle East crisis, and implementing realistic programmes for economic recovery, banking sector reform and poverty reduction.
“We are addressing the problems with transparency and accountability instead of sweeping them under the carpet. We have our own strategy, and international partners have developed confidence in that strategy,” he said.
The government is holding discussions with the World Bank, IMF, Asian Development Bank (ADB), Islamic Development Bank, China Exim Bank and US assistance agencies to secure financing for its reform programmes. Titumir expressed hope that progress would be made through negotiations over the next two to three months.
Protecting People from Inflation
Titumir said shielding ordinary people from rising living costs remained a major priority alongside economic recovery. Higher fuel prices amid the Middle East crisis could increase transportation and production costs, putting further pressure on essential commodity prices.
The government had taken steps to contain inflation and ease the burden on low-income households, he said. The Family Card and Farmers Card programmes announced by the Prime Minister had also received appreciation from international development partners.
According to Titumir, the initiatives are intended to support families and farmers affected by rising prices and prevent further deterioration in poverty. The government wants to ensure that the burden of external economic shocks does not fall entirely on ordinary people.
He added that economic recovery required more than managing immediate crises. It also involved creating jobs, increasing investment, strengthening banks and achieving sustainable long-term growth.
Tax Reform Without Raising Rates
Titumir said a major objective of the government’s reform programme was to increase the tax-to-GDP ratio without raising tax rates. He attributed Bangladesh’s ratio of below seven per cent to weaknesses in tax administration, including patronage and oligarchic practices under the previous administration.
The government was working to make the tax system more transparent, taxpayer-friendly and technology-driven, he said. Expanding the tax net, preventing evasion and improving administrative accountability would help raise revenue without increasing tax rates.
A committee examining the separation of tax policy formulation from revenue collection had already submitted its report. The government had agreed in principle to the reform and was moving towards implementation through an executive order, he added.
Banking Sector Reform and Private Investment
The adviser said the government had specific plans to restore discipline in the banking sector, reduce non-performing loans and strengthen banks’ balance sheets. Time-bound measures were being taken to rebuild the financial position of banks weakened by past irregularities.
Customers of Sammilito Islami Bank had started receiving their money back, while steps had also been taken to ease potential financial pressure on depositors. These initiatives were intended to restore public confidence in the banking sector, he said.
On monetary policy and central bank independence, Titumir said the government was emphasising coordination between fiscal and monetary policies without directly interfering in Bangladesh Bank’s operations.
He also outlined a special financing package of around Tk 60,000 crore to help restart closed factories and increase credit flows to the private sector. The package is expected to support investment, revive production and create employment opportunities.
Maintaining Bangladesh Bank’s independence while coordinating economic policies would be important for restoring confidence and increasing financing for private investment, he added.
Reforms Driven by National Priorities
Titumir said the government’s reform agenda had been designed around Bangladesh’s own needs and political commitments rather than imposed by external partners. Reforms covering taxation, banking, investment and economic governance had been incorporated into the government’s election manifesto.
“We want the ownership of reforms to remain with our political authorities. Reforms are not something to be imposed from outside; we have developed our own strategy based on the needs of the country,” he said.
He added that the government’s five-year economic strategy and reform plans reflected this approach. Political commitment, recognition of structural weaknesses and implementation within specific timelines had helped build confidence among international partners.
Poverty Reduction and Social Protection
Referring to a recent World Bank report, Titumir said around eight million people had fallen below the poverty line amid inflationary pressures. He said social protection, employment generation and greater investment in productive sectors could help reverse the trend.
Employment generation and social safety-net programmes had played important roles in reducing poverty in Bangladesh in the past, he said. The government intended to pursue job creation and social protection simultaneously.
Titumir said discussions with the US Treasury Department and other international institutions had also covered Bangladesh’s inherited economic weaknesses and the impact of external shocks.
Financing programmes from the World Bank, ADB and Islamic Development Bank were helping address pressures in the energy sector, while discussions were continuing to maintain existing support and secure additional financing where necessary.
The government would continue negotiations with development partners to obtain the funding needed for economic recovery and structural reforms. Titumir expressed confidence that the ongoing discussions would make progress over the next two to three months, supporting reforms, investment, employment and social protection.
