In the name of Allah, the Almighty, the most Merciful

Excellences, members of the media, distinguished guests, ladies and gentlemen, Assalamu Alaikum,

In keeping with the instance set up in the past two years I have again appeared before you with our “Budget Thoughts” on the eve of the up-coming budget. However you are well aware of the present day situation in Bangladesh. You are aware that Mr. Illias Ali, the organizing se cretary of BNP national committee and President of Sylhet district committee of BNP& his chauffer Mr. Ansar Ali disappeared from near Illias Ali"s residence around mid night of 17th April last. Till today they remain untraced. Their family members and colleagues are passing their days in serious anxiety. Not only Illias Ali, garments industry labor leader M. Aminul Islam disappeared in the same way. His disfigured dead body was subsequently recovered. It is about two years that commissioner Chowdhury Alam has disappeared. As per Human Rights Organization statistics more than one hundred people disappeared in last one year throughout the country. A very recent statistics show that 122 people have disappeared, of whom a large number are BNP leaders and workers. These incidents of disappearances have created a sense of anxiety and panic home and abroad. Today every citizen remain in panic whether he would return home once he is out of the house. There is almost a reign of terror in the country. It has become impossible to go for creative and productive activities in this state of terror and insecurity. 33 top leaders of the party and the Alliance including our Acting Secretary General have been put behind the bars as they protested against this terrorism. Besides, more than 3000 leaders and workers of the party have been arrested. Most of them became victims of attacks and criminal cases. The incident of arrest of such a large number of top political leaders at one time is unprecedented in the history of Bangladesh.

Distinguished guests,

Today I am going to present our Budget Thoughts in such an indescribable situation when the general people are living an unbearable life due to serious crisis of water, gas and electricity.

* members of the public are seriously affected by unendurable load-shedding in this scorching heat.

* the economy is endangered and the people are suffocating due to soaring price hike of the essential items.

* productive employment and investment is stagnant.

* one person dies every three days at the very hands of the law enforcing agencies.

* nothing could be unearthed so far about the sensational murders including those of Sagor-Runi and Saudi Diplomat, Mr Khalaf Ali.

* indiscriminate repression of journalists by police has become the norm.

* When unprecedented traffic jam has turned city life uninhabitable.

* When dollar price is taka 82 in place of Taka 69.

* When development initiative and trade and commerce have become hostage to the tender flouters and toll collectors comprising of the Student Leaguers (Student wing of Awami League).

* When 3.3 million people have been made penniless in the share debacle and identified criminals who have made away with about One Lac Crores of taka are going scot-free.

* When unarmed Bangladeshi civilians are being killed at the border.

* When administration has become corrupt, inefficient and moribund due to naked politicization.

* When government has been continuously failing to secure our just share of water of the common rivers.

* When the secret agreement of the Prime Minister with India, regarding use of corridor and port is being implemented keeping the parliament and the people in dark about the contents of the agreement.

* When the government is signing agreement with foreign companies for exploring new gas and oil without disclosing to the people the conditions of the agreement.

* When government is pursuing a subservient policy on different national issues.

* When the Head of the State releases death-convicts belonging to Awami League abusing his constitutional authority.

* When all corruption cases against the ruling party people are withdrawn, but politically motivated cases filed against opposition politicians during the unconstitutional emergency government are being pursued with extra zeal.

* When ruling party cronies including the top hierarchy have gone totally corrupt.

* When sacks full of money are transacted as bribes, especially for new appointments.

* When no place is allotted to the opposition for political assembly; yet the ruling party holds political assemblies in stadiums and national assembly premises. Opposition rallies are foiled by imposing section 144 of Cr PC, political leaders are instantly arrested in the guise of mobile courts and when all democratic protests are silenced by the government with cruel atrocities.

* When fascist style barbaric police torture is let loose on the peaceful demonstration of the opposition party; even the party head office is kept cordoned by the police during pre-announced political events.

* by-passing the basic pressing issues of the people, the present govt. abolished the well established caretaker government system of 1996 and pushed the entire nation into an uncertain and terrible future.

Distinguished guests,

In Bangladesh we have been pursuing free market economy. But our free market economy is not disregarding the welfare of the people. Free market economy can function well only in a state of unhindered competition. Democracy and individual freedom are its pre-requisites. But in today’s Bangladesh the ruling party has been demolishing individual freedom by means of taking away peoples’ democratic rights and perpetrating a reign of terror in fascist style. As a result our national economy is in a state of jeopardy. In the absence of transparency and accountability, autocracy is now the only resort of the ruling party. Disregarding open competition, party loyalty and family relationship are now the criterion for use and distribution of resources. As a result, skill has been exiled, productivity becomes stagnant and thus wastage is inevitable. In fine, they have been following a perverse path of capitalism. Consequently, genuine investors have been discouraged. Bangladesh has become an object of neglect by the development partners. Bad governance, corruption, plundering of state resources and extreme violation of human rights have seriously tarnished the image of Bangladesh overseas. In this context, EU ambassadors in Dhaka on 8th May last in a joint press conference expressed their anxiety and stated that Bangladesh has been suffering from “image crisis” in the international arena. They also said that things will not change unless the image is improved.
Japanese Deputy Prime Minister in his recent Dhaka visit clearly indicated about the adverse impact on flow of Japanese aid to Bangladesh if the government continue to fail to curb corruption.
Ladies and gentlemen,
The government’s blatant crony capitalism policy has been increasingly exposed before the public due to corruption at high levels. Not only World Bank but also JICA, ADB and IDB have stopped their committed aid package for the Padma Bridge project on account of corruption. It has been learnt that the World Bank has since sent two letters to the government on corruption in the Padma Bridge project. In response, government has rather made fun of the World Bank by simply transferring the then Communications Minister to another ministry. On the other hand, as an alternative source government has recently signed a MOU with another country for financing the Padma Bridge project whose interest rate and other terms and conditions have not yet been disclosed to the people. It is said that the bridge will be built on BOT basis. Toll charges for the local transports are yet to be fixed and the period the Bridge will be under the control of the company, have not yet been disclosed. The whole deal is totally non transparent. Meanwhile the present Communications Minister claimed that the construction work of the bridge will start within the tenure of the government. It is being said that discussion is going on with a Middle East country for construction of the bridge. We welcome any loan on soft terms. But we would like to make it clear that the people will not take the liability of any kind of nontranparency and financial corruption relating to the construction of this bridge. For construction of the Padma Bridge, agreement was signed with World Bank for 1.2 billion dollar at 0.75% interest with a repayment period of 40 years including 10 years grace period. We demand that before signing of any alternative agreement in this regard a comparative picture of the terms and conditions of any alternative source and those of the World Bank be disclosed before the public. This debt will have to be repaid by our taxpayers and they have a right to know. We would like to see that transparency and accountability are ensured. In this context we would like to reiterate that if elected we shall construct two Padma Bridges. After the Padma Bridge scandal World Bank has now wanted to know from the government regarding allegations of corruption in six more projects under the Communications and Education Ministries. The projects are: Dhaka Urban Transport Project, Dhaka Bypass Project, Devgram-Progoti Soroni Connecting Road Project, Post-Literacy and Continuing Education for Human Development Project, Meghna and Meghna-Gomoti Toll Plaza, Nokla-Hatikamrul-Bonpara Road Project and Dhaka City Corporation 3rd Road Project. Besides, World Bank has also wanted to know about the Dhaka – Mymensingh Highway construction project.
Ladies and gentlemen,
The government has of late approved establishment of nine new banks. Those who got the approval are all ruling party cronies. It requires taka 400 cr. as paid up capital for establishment of each new bank. The source of money of those who will establish these banks is still nontransparent. On the other hand in the new budget scope is being kept for whitening black money. Logically one may question whether this scope is being created for the so-called bank sponsors to whiten their black money. It may be mentioned here that at present there is no economic viability for establishment of any additional new bank. The existing scheduled banks have been suffering from serious liquidity problem over a couple of years. The existing banks are already trying to induce depositors by enhancing interest rates. The big question now is how the new banks would survive in the market by procuring necessary deposits. There is no doubt that it will create an adverse effect on the interest rate. As a result, investment, trade and commerce will suffer. These new banks will create extreme instability in the economy as it is very likely that they will grab deposits from the existing banks by exercising political muscle power.
Ladies and gentlemen,
The incidence of plundering more than twenty thousand crore taka (200 billion) through Quick Rental and Rental Power plant scam and siphoning off lion’s portion of it abroad by converting into dollar is now an open secret. The story of the ‘Black Cat’ of Bangladesh Railways is now well known. The recruitment-corruption in Bangladesh Railways involving crores of taka came to the notice of the nation through recovery of sack full of money from the vehicle of APS of the former Railway Minister. Now vain efforts are on to hide the ‘Black Cat’ through a camouflage by enacting a drama of meaningless and tailored enquiry. Many believe that the killing of Sagor-Runi journalist couple was done to hide a mega corruption. About 100 crores of taka have been plundered from the share market putting 3.3 million small investors at jeopardy. Some of these unfortunate investors have committed suicide. No penal action has so far been taken against those identified by Ibrahim Khalid committee as being responsible for the share scam. On the other hand, some of those responsible for the scam have been assigned the task of solving problems in the share market. Consequently the investors’ confidence in the capital market could not be restored. The general perception is that money plundered from the share market have been siphoned off abroad through conversion into dollar. We observed acute dollar shortage in the country immediately after the share debacle, resulting in enhanced import cost and increased inflation.
Ladies and gentlemen,
It has been learnt that Tk. 1,517 Crores (151.7 Million) are being separately earmarked in the name of development assistance beyond head wise allocation in budget for FY 2012-13. Though it is mentioned on paper that the amount would be spent for development of city corporation, district, and sub-district, Union Parishads and CHTs, it will in fact be distributed to party cronies. Besides, a further amount of TK 740 Crores (74 million) have also been kept as block allocation. We are afraid this non specific project allocation would be spent for party gains. I would like to emphasize that nobody has any right to play foul with the tax payers’ money.
Distinguished guests, ladies and gentlemen,
Of late an MOU has been signed between Rajuk and Sahara group from India for residential projects around Dhaka city. It is totally nontransparent how and on what terms only one foreign company could have been selected for the project without tender and without any competition. Meanwhile, TIB already raised question about this non transparency. Interests of the Bangladeshi developer companies has been totally ignored. It will open up a new den of corruption if the agreement is materialized bypassing government procurement laws, enacted during our time. This agreement with Sahara has been signed to facilitate illegal monetary gains for a very close relative of the Prime Minister. It has been learnt from a news report published in a local daily that Sahara’s Bangladesh subsidiary company “Sahara Matribhumi Unnayon Corporation Ltd” has been floated appointing Sheikh Fazle Fahim as its Director.
Ladies and gentlemen,
Commenting on government corruption, a reputed social-thinker Mr. Badruddin Omar has been quoted by a national daily as saying- “Bangladesh has been caught in the clutch of corruption. Corruption has spread everywhere, from the Head of the State down to the root level. Development and advancement of the country has become stagnant because of corruption. This has in turn increased further corruption and criminal offences. It is not only the foreigners who are talking about state corruption but also the Finance Minister himself has identified corruption as the principal impediment to the path of Bangladesh development, prosperity and good governance.”
This corrupt process of distribution of money from the State exchequer among the party’s own people is the naked manifestation of crony capitalism, which the present government is actively pursuing.
Ladies and gentlemen,
The discipline and dynamism achieved in Bangladesh macroeconomic management since 1991, and the example of respectable economic growth Bangladesh had achieved are on the verge of destruction due to government’s mismanagement, lack of skill, corruption, plundering and bad governance. Before 1975, Bangladesh was known abroad as a “Bottomless Basket”. During our time Bangladesh came to be known as an “Emerging Tiger”. During our time Goldman Sachs included Bangladesh in the "Next Eleven". The bright image created during our time has now been tarnished. This government has been systematically destroying all our institutions. They are making it extremely difficult for any future government to govern.
Dear friends from media,
I would now like to draw your attention to an unfortunate issue. As you all know the winning of Nobel Prize by the founder of micro-credit Dr. Mohammed Yunus and his institution the Grameen Bank, has brightened the image of Bangladesh globally. But it is an irony of fate that out of personal vendetta the government is out to destroy the Grameen Bank and its associated bodies. We all know that Grameen Bank has been playing an important role in poverty reduction and empowerment of women. The lot of 8.5 million families is linked with the future of Grameen Bank. 90% of these 8.5 million families are women . They own 97% of the Bank. The government"s attempt to take control of the Bank for petty party interest has pushed the fate of its 97% poor owners into sheer uncertainty. We strongly condemn the heinous attempt of the government. We would also like to declare that if elected in future we will save the Grameen Bank from destruction and restore it to its rightful position.
Distinguished guests, ladies and gentlemen,
In FY 2011-12 the Finance Minister presented a budget for Tk. 1,63,589 crore with a deficit of Tk. 45,000 crore. For deficit financing Tk. 27,208 crores were shown as receipts from domestic source, while Tk. 17,996 crores from external source. Government borrowings from banks were about Tk. 18,000 crores upto mid April, out of which Tk. 11,000 crores was from commercial banks and Tk. 7,000 from the Bangladesh Bank. Informed guesses show that the amount would further increase at the end of the fiscal year. In 2011-12, Government expenditure increased excessively due to increased expenditure against subsidy. Subsidy, estimated initially was dreadfully faulty. On 13 September, 2011, during the revised estimate, subsidy expenditure was 2.75% higher than the original budget estimate. In terms of taka it rose to Tk. 47,385 crores, although it was Tk. 17,261 crores in the original budget estimate. Government issued bond of Tk. 2,700 crores as to the state owned commercial banks against the Bangladesh Petroleum Corporation liabilities. Government’s subsidy expenditure this financial year will be more than Tk. 40,000 crores, out of which Tk. 29,000 crores will be released from out of the current FY budget, while the rest Tk. 11,000 will be passed on to the budget FY 2012-13. The excessive subsidy is a manifestation of government’s imprudence and bankruptcy. The big question also remains about the proportion of the subsidy amount spent for productive purpose and that for gainful benefit of the party cronies. The government’s subsidy expenditure scenario reflects a gloomy picture of its economic mismanagement. The policy of increase of government expenditure instead of catering to the individual investors’ demands is no doubt suicidal. Consequently, inflation has swelled, balance of macro-economic stability has broken down and the next generation has been burdened with liabilities.
Distinguished guests, ladies and gentlemen,
In first four months and a half of this year, government has taken from Bangladesh Bank 98% of the loan estimated for the full year. It is unprecedented for the government to take sucyh a big amount of loan in so short a period. Paper money have been printed indiscriminately to cater for government borrowings. In first four months of the financial year, an additional supply of about Tk.53,000 crores was pumped into the market. Government borrowing from the commercial banks resulted in severe liquidity crisis in the market. The banks suffered from severe liquidity problems. Call market interest rate shot up abnormally. The state owned banks traditionally are used to supply money to the call money market. Ironically, now they themselves have to approach the call money market for support. Interest rate in the call money market shot up in an unprecedented way in the economic history of Bangladesh. As per Bangladesh Bank statistics, average interest rate in the call money market in January, 2012 was 19.66%.
Distinguished guests, ladies and gentlemen,
Debt servicing cost has been rapidly increasing in the country. In first 10 months of the current FY, almost 50% of the foreign loan received has been spent against debt servicing. According to ERD statistic 164 crores of dollar have been disbursed during this period, out of which 80 crores, as per latest information, have already been spent against debt servicing. Moreover, the way expenditure has increased against debt-servicing of the domestic borrowing, our national economy is being caught in a sort of debt trap. In future, lion’s portion of the amount taken for deficit financing will be required to be spent for payment of interest alone. In the current fiscal year, till 24 May, 164 crores of dollar have been disbursed as against 438 crores committed as foreign loan and aid. Which means only 38% has been received. There has been an acute negative impact on foreign loan and aid flow because of Government’s economic mismanagement, lack of skill and lack of donor agencies’ confidence in the government.
Ladies and gentlemen,
As per media reports, government is going to present an ambitious and largely deficit budget for the incoming FY. This is being done at a time when external loan and aid flow has become relatively narrow. Direct foreign investment is almost nil. It is learnt that it will be a deficit budget of TK. 50,000 crores. We believe that this inflated budget of Tk. 1,90,000 crores is being framed on party consideration. The budget allocations are being determined keeping in view the upcoming national election. Because, as per schedule only half of 2013-14 budget will fall within the tenure of the government. After that, national election is supposed to be held. For financing this large amount of deficit, 25% will have to be catered from internal borrowings. ADP for Tk. 55,000 crores is being proposed to be included in the budget. That means 91% of the proposed ADP will be required to be financed through deficit financing.
Distinguished guests, ladies and gentlemen,
Compared to our overall needs, the upcoming budget cannot be termed ambitious. However from the point of view of implementation capacity and ability to cater for the required fund, the proposed budget is no doubt meaningless and ambitious. It may be mentioned that only 55% of this year’s development budget could be implemented in first 10 months of the FY. There is every likelihood of wastage and corruption in the next two months. The incoming budget is also going to be largely a deficit one. Fund will be arranged through imprudent bank borrowings. As a result economic imbalance, anarchy and restlessness are inevitable.
Ladies and gentlemen,
Financing will be the main challenge for the proposed budget for the year 2012-13. There seems no other option left to the Finance Minister other than enhancing collection of revenue. As per available information, Finance Minister declared to collect revenue of Tk. 1,40,000 crores to meet the budget expenses. For this they will have to increase revenue collection by 25%. But in view of slow growth, stagnancy in investment and production sector and ever increasing inflation, estimate for increasing 25% of revenue collection is highly impractical. Moreover, political restlessness might increase in the face of untold repression let loose by the government against the political rivals. Adverse impact is bound to reflect upon macro-economy, resulting in uncertainty in achieving revenue collection target.
Ladies and gentlemen,
Sale of savings certificate is a significant source for deficit financing of the budget. But there has been serious slide in the savings certificate sector due to government’s unwise steps. In the first 10 months of the current FY, net investment in this sector is only 380 crore. During this period, though Tk. 15,207 crores have been deposited against savings certificates, the depositors withdrew Tk. 14,827 crores. In the last fiscal Year, there was a net sale of Tk. 2,505 crore. Although Tk.6,000 crores was targeted for the current FY, only 380 crores could be sold so far. The prospective buyers were discouraged due to government’s wrong policies – like low interest rate in the beginning of the FY and deduction of tax at source. On the other hand, the middle class depositors due to high inflation rather withdrew their savings to meet their day to day expenses. In first 10 months of the current FY, export earnings grew only by 8.41%. In consecutive two months (March and April, 2012), compared on point to point basis with last year, exports reduced by 7.5%. If the same downward trend continues to persist in May and June, it is ominous. We have, at present, a very bright prospect for our garment sector which could not be fully exploited due to government’s economic mismanagement and lack of skill. In FY 2011-12, increase in the import growth had engulfed the entire benefit of the increase in the export growth. During this period, 4 million tons of food grains were imported, it is learnt. The question is why so big quantity of food grains had to be imported, despite government’s claim to have earned self-sufficiency in food grain production. On the other hand, allegation of corruption in the importation of food grains is well discussed. Import has reduced in the current FY as well. It is a matter of anxiety that import of capital-machineries (for setting up industries) and industrial raw materials has significantly reduced. It may be concluded that the sponsors are not at all opening LCs for importation of those two items meaning that the sponsors are not going in for new investments. At this backdrop, IMF thinks growth in the current FY will be 5.5% only. Weak growth in export, poor rate of investment, economic mismanagement and macro-economic imbalance are mainly responsible for this. Savings growth rate has also been reduced for high inflation. If growth-rate reduction continues unabated, the ambitions target of revenue collection in the next FY will be quite risky.
Distinguished guests, ladies and gentlemen,
When the present government assumed power foreign assistance stuck up in the pipe line was 835 Crore 85 Lac dollar. On the other hand, 1600 crores of dollars have now been stuck up in the pipe line. It’s a record failure of the government in utilization of foreign assistance. Construction of the PADMA Bridge has become uncertain due to allegation of government corruption in the project. The uncertainty provoked other donor agencies not to release their committed fund. Non availability of foreign assistance compelled government to depend on internal borrowings which triggered high inflation. Government will get 90 Crores of dollar as loan in 6 installments in 3 years from IMF under its Extended Debt Facilities program on certain hard terms and conditions. These conditionalities will put the members of the public in a suffocating and precarious situation. The upcoming FY is going to be more unbearable for the poor, the agriculturists, the low income group, the middle class and the general mass. Government recently took hard term IMF loan because of economic imbalance created by government’s economic mismanagement. But fact remains that the liability will have to be borne ultimately by the people.
Distinguished guests, ladies and gentlemen,
Senior Leaders of the present government often boastfully claim that during their tenure they have added 3000 megawatt electricity generation capacity to the national grid. If this claim is right then the country’s electricity generation capacity should have increased by 82%. According to Power Development Board’s (PDB) annual report, the electricity production of the country has increased only by 27% in last three years. The load-shedding of electricity has now reached an unbearable level. Compared to the financial year 2006-2007, the electricity production during day time has only increased on an average by 200-300 megawatt only and during peak-hour in the evening by 1000-1200 megawatt. Even the Finance Minister has recently said that he is not very sure whether any development has taken place at all in the power sector during the tenure of this government. During the financial year 2008-2009, the loss of PDB in the power sector was 8.39 billion taka, the loss increased to Tk. 46 billion in 2010-11. The loss in the energy sector due to supply of liquid fuel to rental and quick rental power plants in 2008-09 was Tk. 40 billion which is likely to reach Tk. 80 billion in the current financial year. So only for 27% increased production of electricity the country had to incur a loss of Tk. 120 billion. Many experts feel that despite the increase of power tariff several times during the current financial year, the amount of direct and indirect subsidy to power sector will still be around 130-150 billion taka.
Ladies and gentlemen,
During the last three years wholesale price of electricity has been increased six times and at the consumer level the price has been increased five times. The Finance Minister has recently indicated that power tariff will be further raised in near future. During our time, the price of electricity was increased only once in the course of five years. Compared to our time, the wholesale price of electricity has gone up by more than two times and at consumer level increased by 2.5 times. All these have happened due to setting up of expensive liquid fuel based rental and quick rental power plants without any technical and financial feasibility. Those plants have been procured in a very non-transparent manner through unsolicited offers and without any competitive bidding. Many of these plants are experiencing frequent shutdown as they are too old and have become worn out. The shutdown is also caused due to the short supply of fuel. Only 10-40% capacities of these plants are generally utilized. However, regardless of their utilization the operators of these rental plants receive a minimum of 80% capacity charge as per terms of the contract. The cost of this wrong decision of going to quick rental system and mismanagement of the tgovernment, is being recovered from the consumers by raising the electricity prices from time to time. In order to benefit the operators of rental plants, most of whom are government party henchmen, the BMRE of existing power plants of PDB are deliberately not being done. Existing PDB power plants are also sitting idle as they are not getting the required supply of gas, because the limited gas that is available is supplied to the expensive quick rental plants on priority basis. We earlier cautioned the government that the decision to go for quick rental would be suicidal. Now the Finance Minister himself admits that it was a wrong decision to go in for quick rental plants.
Distinguished guests,
During our time with the assistance of ADB a master plan was drawn for the overall development of the power sector. Under this plan there was a program for diversification of fuel source for power generation and a three year road map for production of coal based power plant was prepared. Financing was also arranged for setting up of fuel saving 4000 megawatt capacity coal and gas based combined cycle and peaking power plants. Tender process was also completed for 1290 megawatt capacity plants. But those projects were cancelled by the unconstitutional emergency government in 2007. This government has also not taken any step for implementing those projects. The reason is obvious. The present government in the first two years of their tenure sat idle without doing anything for the development of power sector so that a crisis situation is created to justify procurement of large number of rental and quick rental plants and thereby giving opportunity to government party henchmen to make money by supplying those plants without going through any tendering or competitive bidding. In order to give legal protection to their illegal act, they have enacted an indemnity law in 2010. If we form government in future we shall not spare anybody who is found responsible for these misdeeds.
Distinguished guests,
Around 10 million small and marginal farmers of Bangladesh are now facing great difficulties due to fall in the prices of rice and paddy at grower’s level. According to government‘s Agriculture Extension Department the cost of production of paddy has gone up by 20% in one year, from Tk. 550.00 per maund (37.5 kg) to Tk. 680.00 per maund. A maund of paddy is now selling at Tk. 450-500. So not to speak of profit, farmers are not even in a position to recover the cost of production. They are really in great distress. Government has recently announced to procure 1 million ton of rice/paddy at a rate of Tk. 28 per kg for rice and Tk. 18 per kg for paddy. But the government is not buying directly from farmers. They are buying either from traders or rice mill owners as the small farmers have very little direct access to public procurement arrangements. They have to go through middle men. So they do not get the right price. Middlemen enjoy most of the benefit from the government price support. On the other hand, the Finance Minister has indicated that in the next budget subsidy for agricultural input will be reduced. This will bring further misery to farmers.
Distinguished guests,
While announcing the budget for the current year, the Finance Minister predicted a 7% GDP growth. But Bangladesh Bureau of Statistics is now saying that the actual growth will be 6.32%. This estimate also appears to be an inflated one. Compared to last year our export growth has declined. Cost of import has gone up. Import of capital machinery and industrial raw materials have also declined. All these suggest that the growth rate will further decline. According to Asian Development Bank’s (ADB) estimate the growth will be 6.2% and IMF has predicted a growth of 5.5% only. According to BBS the growth in Agriculture has declined by 50% compared to last year. The growth in this sector will be only 2.53%. Fifty percent of GDP’s contribution comes from service sector. The projected growth for the service sector in the current year is 6.06%. Last year growth in this sector was 6.22%. BBS has projected a very optimistic growth of 9.47% in the current financial year for Industrial Sector. Last year the growth in this sector was only 8.22%. Due to fall in the import of capital machinery, rise in the cost of import and imposition of government restrictions to keep the factories closed for 12 hours a day for short supply of gas and electricity, the projected industrial growth seems to be unrealistic and will be difficult to achieve.
Ladies and gentlemen,
It is generally calculated that for one percent GDP growth, four percent of investment is required. Considering this capital output ratio, the quantum of investment estimated by BBS will not yield more than 6.2% growth of GDP. There are good reasons to doubt whether the quantum of investment estimated by BBS has actually taken place as the growth of private sector credit has declined. So the Finance Minister’s frequent claim of attaining 7% growth for the current financial year is totally absurd.
Ladies and gentlemen,
The inflation in the country has reached an unbearable level due to gross inefficiency and total mismanagement of the economy by the present government. According to Bangladesh Bank’s statistics, the overall inflation on point to point basis in March, 2012 was 10.1%. During August-November period of the current financial year, (2011-12) the overall inflation on point to point basis was more than 11%. In September, 2011 it was as high as 11.97%. On point to point basis the food inflation at the beginning of the financial year was 13.4%. Non-food inflation in Mach 2012, on point to point basis reached 13.96%. The overall inflation during the most part of financial year was in double digit. According to ADB, the rise in inflation is mainly caused by the rapid expansion of credit flow, frequent rise of power and energy tariff, depreciation of Taka against Dollar and excessive import of liquid fuel. The deteriorating law and order situation, and prevalence of illegal toll collection have also played their part in raising inflation. A minister of the present government himself admitted that the amount one has to pay as illegal tolls at different points for transporting goods is more than the actual transport cost. This causes rise in the cost of doing business and consequently rise of inflation. The rise in inflation has made the lives of low, middle and fixed income group of people miserable. Inflation has impacted negatively on the growth of investment, savings and production. According to IFC’s report on ‘Cost of doing business 2012’, out of 183 countries, Bangladesh stands 122nd. The position of Bangladesh was 118th and 111th in 2011 and 2010 respectively. If the cost of doing business continues to rise like this, then it is going to adversely impact the inflation further. In order to accelerate the economic growth there is no substitute to investment. It is therefore essential to remove all institutional bottlenecks that stagnate the investment.
Distinguished guests,
The root causes for inefficiency and mismanagement of the economy lie in the following conflicts/anomalies of the national economy:

* Imbalance between income and expenditure of the government.

* Trade Imbalance.

* Mismatch between contractionary monetory policy and expansionary public expenditure policy.

* Rise of subsidy expenditure disproportionate to revenue earnings of the government.

* Mismatch between desired and actual investment.

* Imbalance between high growth of public credit with low growth of private sector credit flow.

* Mismatch between foreign aid committed and actual aid disbursed.

* Mismatch between scheduled date of project completion and actual date of completion.

* Absence of good governance.
In order to remove the above imbalances, conflicts and mismatch, the following actions are necessary:

a) Containing inflation.

b) Reducing government borrowing from banking system.

c) Strengthening foreign currency reserve.

d) Stabilizing the exchange rate.

e) Enhancing manpower export.

f) Creating investment friendly environment.

g) Expanding export and reducing import dependency.

h) Reducing corruption.

i) Establishing professionalism and ensuring good governance.
Ladies and gentlemen,
While presenting our thoughts on the national budget last year and the year before, we had proposed implementation of certain creative projects for economic development of the country. The government did not accept those. On the contrary, government’s mismanagement has brought the economy to the brink of collapse. Last year when I presented our “Budget Thoughts” I expressed concerns on the poor budget management of the government and cautioned the government about the consequences of such mismanagement. The government did not pay any heed to those. Our concerns, particularly relating to budget deficit and its management, government domestic borrowing and debt management, have come true. The present government has made such a mess of the national economy that any government in future, even with all its good intentions, will find it difficult to revive and revitalize the economy. However, we believe that with sincere political commitment and spontaneous participation and co-operation of the people, the nation can overcome such stagnancy.
Distinguished guests, ladies and gentlemen,
Our pledge to the nation for future Bangladesh is to transform the country by 2030 into a higher middle income country. In order to achieve this objective we need to do the following:

1. Address infrastructure deficiencies and ensure investment friendly environment for both local and foreign direct investment.

2. Seek new avenues of production and explore new markets.

3. Develop human resource through advanced knowledge, technology and education and create adequate job-opportunities.

4. Reform agriculture sector to expedite growth.

5. Adopt a comprehensive strategy for urban development in the context of rapid urbanization.

6. Develop and expand multidimensional connectivity with countries of South, South East and East Asia.

7. Pursue sustainable adaptation strategy for addressing climate change challenges.

8. Seize all opportunities for progress and prosperity.

9. Pursue a development strategy that suits the creative and dynamic characteristic of the people of Bangladesh.

10. Ensure human security along with state security of Bangladesh.

11. Prevent waste of resources and ensure its most efficient utilization for development of the country. Take stringent steps to curb corruption.

12. Make efforts to attain zero population growth for the country.

13. Strengthen local government institutions. Adopt comprehensive strategy for rural development.

14. Formulate and implement appropriate policies for exploration, extraction and optimum use of gas, oil, coal and other mineral resources. Ensure optimum generation and supply of electricity within the quickest possible time.

15. Make the judiciary effectively independent and neutral to ensure justice and rule of law for all

16. Build a just society and ensure participation of all sections of the people in the development process of the country.
Excellences, distinguished guests, ladies and gentlemen, We firmly believe that by 2030 we will be able to take Bangladesh to our desired level of prosperity. Our people have extraordinary resilience, drive and capacity to take the country forward. There is no dearth of creativity in our people. We have to make proper use of this creativity and resilience to make Bangladesh a resourceful and prosperous country. For this, what is required is dynamic leadership. To attain this objective there is no substitute to the rule of law and good governance. We are committed to establish social justice and ensure good governance. Thank you all.

Allah Hafiz, Bangladesh Zindabad