Up to $24b of project investment in 15yrs lost to graft, inflated budgets: White Paper

Of the $60 billion invested in the annual development programmes (ADP) over the past 15 years, $14-$24 billion, equivalent to around Tk1.61-Tk2.8 lakh crore, has been lost to political extortion, bribery and inflated budgets, sources at the White Paper committee told The Business Standard today (30 November). 

The information comes a day before the committee submits its report to the chief adviser of the interim government, Prof Muhammad Yunus, on Sunday (1 December). The full report comprising around 250 pages will be released at a press conference on Monday. 

According to the final draft of the White Paper on State of The Bangladesh Economy, corruption in large-scale public projects has caused an average cost escalation of 70% and delays of over five years.

"Misappropriation of funds during land acquisitions and the appointment of patronised project directors have further strained resources, undermining potential benefits from infrastructure and social investments," it said.

Debapriya Bhattacharya, head of the committee, at an event on Thursday, said their report will address a series of economic challenges, particularly the state of the banking sector and the alarming level of capital flight during the last 15 years of Awami League rule.

The report titled "White Paper on the State of Bangladesh Economy" will feature 22 chapters covering topics such as, inflation, GDP growth, the banking sector, external balance, power and energy, the quality of statistics, government debt, revenue, expenditure, mega projects, poverty and inequality, etc.

Transparency International Bangladesh (TIB) recently claimed that between $12 billion and $15 billion has been siphoned out of the country annually over the past 15 years. 

Their findings align closely with estimates from the White Paper Committee, which suggests that an average of $14 billion per year were laundered abroad during Sheikh Hasina's administration.

The interim government hinted at a huge capital flight from Bangladesh's banking system, much of it through the misinvoicing of export and import transactions. 

For example, Ahsan H Mansur, governor of Bangladesh Bank, told The Financial Times last month that approximately $17 billion had been diverted overseas during Sheikh Hasina's 15-year tenure. 

He said a single business group was responsible for laundering $10 billion of that total.

In 2022, the US-based research organisation Global Financial Integrity reported that Bangladesh lost an average of $8.27 billion annually between 2009 and 2018 due to trade misinvoicing by importers and exporters seeking to evade taxes.

In response to these findings, Bangladesh's interim government has sought assistance from the UK, US, Singapore, UAE, and other nations to investigate the overseas assets of Bangladeshi nationals, particularly politically exposed individuals and businesses associated with Sheikh Hasina's administration.

Addressing the nation on 17 November, Chief Adviser Prof Muhammad Yunus revealed that they have compiled a list of 150 influential figures accused of corruption and money laundering. Investigations are already underway against 79 of these individuals.

A member of the White Paper Committee acknowledged the challenges of accurately determining the scale of capital flight, citing time constraints and data limitations. 

However, the committee relied on scientific methodologies, government documents, and global reports to estimate their estimates. 

The committee, formed on 28 August, was given three months to prepare the report, which aims to provide a clearer picture of the economy plagued by years of mismanagement and distorted data.