Safeguards are needed to protect vulnerable people under IMF-backed reforms: Debapriya

Debapriya Bhattacharya, public policy analyst and distinguished fellow of Centre for Policy Dialogue (CPD), said on Monday that when the IMF takes a reform programme for a country, sometimes inequality increases, because of the conditions they attach.

So, safeguards are needed when the IMF is involved in any major reform agenda, said the prominent economist.

He made the statement in a dialogue of the CPD-Citizen Platform titled ‘How the concern of disadvantaged people can be reflected in the upcoming national budget during the IMF reform period’, held at Bangabandhu International Conference Centre (BICC) in the capital on Monday.

Presenting a keynote paper on the topic Debapriya said, when the IMF programme is taking place in a country, it tries to impose an authority on the economy of that country. Similarly, in Bangladesh the global lender imposed conditions of cutting subsidies on energy, electricity, advocated for market-based foreign exchange and interest rates, which could trigger sufferings of the disadvantaged groups.

In addition, the IMF has spoken of additional tax-revenue collection. Debapriya said.

He said there is no room to disagree with this, but from whom the tax will be collected, that is a big question.

He also complained that there is no standard system of tax collection in the country so far.

Planning minister MA Mannan was present in the function as the chief guest while Rana Mohammad Sohail MP, member of parliamentary standing committee on finance ministry and barrister Rumeen Farhana, an ex-MP of the current parliament from BNP, were present as the special guests, UNB reports.

Advocate Sultana Kamal chaired the discussion while former NBR Chairman Dr Muhammad Abdu Mazid, economist professor Mustafizur Rahman, CPD’s executive director Dr Fahmida Khatun, among others, spoke in the function.

Representatives of different disadvantaged groups including old aged, youth leaders, students, physically challenged people, farmers, tribal groups, fishermen, women and cleaners’ community were present.

Planning minister MA Mannan said despite efforts made by members of the parliament, the government’s allocation often fails to reach the country’s underprivileged people.

The minister emphasised on how the underprivileged were deprived in different sectors. But Prime Minister Sheikh Hasina understands the sufferings of the disadvantaged groups and she is trying to allocate more in the budget to save them, he said.

“Bangladesh is not dependent on the International Monetary Fund [IMF]. The budget is entirely the government’s own plan. The IMF is merely a side-actor,” he said.

The minister also highlighted inflation as the biggest challenge at the moment, though he noted that it had slightly decreased last month.

Debapriya said, according to the data of the Bureau of Statistics, poverty has decreased but inequality has increased. The disparity has also increased, alongside consumption inequality, he said.

He, however, noted that data on wealth inequality was not available. He also expressed doubts about how much reform could be done depending on indirect taxes.

Debapriya recommended the government should maintain a balance between sectors in terms of reforms and sectoral disparity.

He also emphasised on the need to raise direct taxes to minimise the tax burden on the lower income group of people.