Towards a pro-people direction
THE finance minister placed the 38th budget of Bangladesh for 2009-10 fiscal before the parliament on June 11, 2009. Incidentally, this is his maiden budget. Because of the people's high expectations, the size of the budget had to be a bit (14%) larger than the last budget. The budget is considered as the first step towards realising the visions for 2021.
It has included some new initiatives like public-private participation funds, expansion of social safety nets, and action programmes in developing electricity, agricultural and rural developments. For various reasons, the projects will depend mainly on the country's own resources. If the government can acquire the required funds, the budget will become an employment-generating one.
The finance minister is worried about the threat of an adverse impact of the global recession during the first half of the budget. To minimise the impact, the government has adopted measures like rehabilitation and skill development training programmes for returnee expatriate workers, prevention of retrenchment of expatriate workers and finding new markets, and making national skill development councils more effective. These steps may ultimately increase the demand for, and productivity of, the workers.
Increasing domestic demand is particularly critical during global recession because of falling export receipt. Thus, we may expect the government for refinance of schemes like equity and entrepreneurship fund, investment promotion and financing facilities fund and housing fund.
Emphasis on more power generation, and raising agricultural production, will improve domestic demand further. Steps like allowing merchant-banking facilities to state owned commercial banks will be useful for consolidating the capital market. Yet another good step is expanding the fiscal stimulus package to Tk.50,000 million.
It is relevant to point out that the G-20 countries have declared a bailout package of $1.1 trillion to overcome the crisis arising out of the global economic recession. Bangladesh is expected to receive budget support from these programmes. Under this package, $250 billion will be used for financing trade in the member states.
Access to this facility by countries like Bangladesh requires policy changes in trade financing by the multilateral institutions. As Bangladesh manages its external sector prudentlynot defaulting on debtit must be provided trade financing on liberal terms for importing essential commodities like fertiliser and fuel.
With limited resources, and high expectation of the people, the new budget formulation deserves credit. It has tried to touch almost all aspects of the people's lives, from availability of essential items to fuel, agricultural inputs, social safety net, bringing buoyancy in the finance and capital market, the need for maintaining domestic demand to offset the possible decline in export, earning satisfaction of public servants, extending some new facilities to professionals and women entrepreneurs, and attracting more vigorous private sector participation.
The extension of the facility for whitening black money for another three years has evoked severe criticism from some economists and budget analysts. The finance minister has admitted, though, that he himself does not appreciate the concept of whitening black money. He only agreed because of possible adverse impact of global recession in 2009-10 and the need for utilising the black money in investment. The opponents, however, have not accepted this argument. More discussions are needed on the issue for a final decision.
The national budget is just not a statement of income and expenditure. It is a vehicle through which growth and poverty alleviation are ensured. For a developing country like Bangladesh, presentation of a good budget is no mean job. Thus, the overall budget management at the ministry level must improve because of its weakness at the level of implementation.
In conclusion, we may say that the budget has tried to maintain a balance between growth and public interest. A budget can never meet all the demands and desires of the people. With cooperation and support from the people, if the country can attain a growth of even 5.5%, it will surely be an achievement.
A.B.M.S. Zahur is a former Joint Secretary.
For all latest news, follow The Daily Star's Google News channel.
Comments