Bangladesh’s economy has been going through a difficult period for the last two years or so. The recent anarchy has made it all the worse. The damage caused to the economy in terms of infrastructural damage and business loss in the 15 days of mayhem is believed to be more than Tk. 75,000 crore, with the readymade garment sector alone incurring a loss of Tk. 20,000 crore, not to mention the irreversible loss of human lives.

The dollar crisis, high inflation, continued increases in prices of essential goods, including fuel and food, and the depletion of the foreign exchange reserve have already made it extremely difficult for the lower and limited income groups to make both ends meet. They had to cut down on their food intake, do away with the minimum food requirements of their babies. They had to go without medical care. They had to cut down on the educational expenses of their children.

The job market in the country is dull. The unemployment rate is all time high. More than 70% of the educated youth are reported to be without jobs. Industrialisation and foreign direct investment (FDI) are the pre-requisites for the creation of jobs. Most of the industries in Bangladesh, except probably ready-made garments, are sick mainly because of poor or mismanagement. Those somehow running are in deep trouble because of the dollar crisis. They cannot import the much needed raw materials and other inputs to operate their mills and factories because of the dollar crisis. Foreign investment has been shy because of a lack of rule of law, political stability, and bureaucratic transparency.

The job market for wage earners is also shrinking because, the host countries now require trained, semi-skilled, and skilled labour, and Bangladesh is seriously falling behind in this respect. Even the maid servants of the Philippines have a better job market abroad than those of Bangladesh because of their better education and training.

The banking sector of the country has been in serious crisis from different angles for a long time. The major problem for them is the ever increasing classified loans, which have now stood at as high as Tk. 187, 000 crore, pushing many of the banks into a liquidity crisis. Loan default, evasion of tax, and illegal transfer of money to foreign destinations--- corruption in one word, has been the major concern for the economic experts of the country. They are the stumbling blocks to the economic recovery, let alone the economic growth of the country. They have been the greatest headache for the government in running the economic affairs of the country in recent years.

Loan default, as of today, stands at Tk. 187,000 crore, and despite all efforts on the part of the government to put on a bridle around the neck of the galloping horse of loan default, there is no sign of redress. It is rather increasing at an alarming rate.

The country’s current budget has a deficit of Tk. 2.5 lakh crore. The reason for this huge deficit is simple. On the one hand, its revenue earning has always remained well below the required level. It hast has never been, and is very unlikely to be in the near future on par with the country’s requirements.

Roughly 25% of the people of this country live below the poverty line, earning less than $2 dollar a day. In that sense, 75% of the people, i.e. about 13 crore people earn more than $2 a day. In other words, if we consider a family of five on average having one family member earning more than (5x2)= $10 dollar a day, then there should be at least 25 million individuals who will be paying income tax every year. In practice, I understand, the figure is just about 4 million.

 Tax evasion is massive. Many are hiding their income to avoid paying taxes. Many are paying much less than what they are supposed to pay. The government exchequer is being denied in both ways. It is the responsibility of the tax collectors to identify the defaulters and bring them under the tax network. They have to find out why the general public is shy of submitting tax returns and declaring their income.

After what we have recently witnessed by the courtesy of the media about amassing wealth beyond proportion through illegal means by some of the top ranking tax officials, abusing state power and authority, it has become the top priority not only to make a thorough overhaul of the entire system but also to embark upon a cleansing operation from top to bottom.  
The tax payment system has to be made simple and digital, and the tax officials have to be accountable. Somebody has to answer how such nuisances with public money could go on with impunity years after years, right under the nose of the government.

Money laundering, or illegal transfer of billions of dollars abroad through over-invoicing or under-invoicing, is another big headache for the government to maintain a healthy economy. This is something that is bleeding the economy white and making the nation anaemic.
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The writer is a retired Merchant Mariner and a columnist. Email: [email protected]