Task force lists 'low hanging fruits' for overcoming monumental economic challenges
All recommendations made by the task force on re-strategising the economy
Highlights:
- Task force report proposes 'low-hanging fruits' to overcome economic challenges
- Quick wins are needed to build public confidence
- Medium and long-term strategies address deeper structural issues
- Pilot projects proposed in key areas like public hospitals and education
- New institutions and regulatory bodies are recommended
- Digital and AI technology should be leveraged
- Government efficiency must be improved
- Economic diplomacy should be enhanced
The Task Force Report on Re-strategising the Economy and Mobilising Resources for Equitable and Sustainable Development has made some recommendations that they termed "low-hanging fruits" for overcoming monumental economic challenges.
Education and Planning Adviser Prof Wahiduddin Mahmud handed over the task force's report to the chief adviser at the Chief Adviser's Office in Tejgaon yesterday (30 January).
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"The challenges facing Bangladesh today are monumental, but they are not insurmountable. The economic crisis, social unrest, and institutional decay that the new government inherited are the result of decades of governance failures. Yet, this period of transition also provides a unique opportunity for structural reforms that can set the country on a path to sustainable and inclusive development," says the report.
It says the recommendations are rooted in pragmatism. "We have emphasised actionable steps that can yield quick wins—'low-hanging fruits'—to build public confidence in the reform process. These measures include improving transparency in public procurement, streamlining regulatory frameworks to encourage entrepreneurship and foreign investment, and addressing the immediate food and energy security crises through targeted policy interventions."
Simultaneously, the report also outlines medium- and long-term strategies to address deeper structural issues such as governance reform, financial sector stability, and equitable human resource development.
In its report, the task force said the proposed recommendations outline a strategic framework to guide the interim government of Bangladesh in addressing pressing challenges and facilitating economic growth, social development, and environmental sustainability.
It also hoped that the reform agenda developed by this taskforce can be taken up for implementation immediately. "In particular, we have tried to suggest some 'low-hanging fruits' that can be harvested quickly, while others that are deemed to be high priority could at least be initiated within the tenure of the interim government."
It says, "One of the key lessons from our consultations is that reforms must be designed with implementation in mind. Too often, policy documents remain aspirational and fail to deliver tangible results due to weak execution mechanisms.
"The new government must prioritise the establishment of a robust implementation framework, backed by continuous monitoring, evaluation, and feedback loops to ensure policies are adjusted based on real-time outcomes."
All of the recommendations outlined by the task force on re-strategising the economy are mentioned below.
Case Pilots
1. Public Hospital Reform: We recommend selecting a specific public hospital in Dhaka for comprehensive reform, as highlighted in Chapter 14. This initiative would involve appointing qualified hospital administrators in place of generalists and establishing a new governing board.
Additionally, implementing a real-time monitoring dashboard will facilitate the collection of user complaints, and grant Youth and Citizen Groups online access to key performance indicators. Crucially, the user feedback data can be used to drive continuous improvements in service delivery, quality and performance.
2. Rural School and Clinic Reform: Similarly, we propose initiating a pilot project focused on reforming a rural government school along with a Community Clinic. While the foundational principles align with those for the public hospital, this initiative will be tailored to address the unique challenges and scale of rural educational and healthcare environments.
3. Reform of the Bangladesh Road Transport Association (BRTA): The approach for reforming the BRTA will mirror those proposed for other sectors. Here, robust performance monitoring and the integration of user feedback will be essential. Additionally, we will establish Youth and Citizen monitoring groups to utilize real-time data, ensuring transparency and accountability in this reform process.
4. Revitalizing the Buriganga River: The Buriganga River is on the brink of extinction, and urgent action is imperative for the survival of both the river and Dhaka. The government must send a decisive message affirming its commitment to this critical undertaking. If necessary, emergency legislation should be enacted to facilitate immediate, unimpeded action for this project.
Leadership should come from a dedicated Minister or Advisor, supported by a strong technical and legal team. Given the expected resistance from vested interests, it is vital to seek special judicial dispensations to avert potential sabotage. With rivers granted the right to life under the law, this emergency response would be fully warranted. Let the restoration of Dhaka begin with its rivers.
5. Reforming a Ministry: It is strongly suggested that an entire ministry of the government be taken up on a pilot basis to establish a monitoring and evaluation system that will serve to generate critical key performance indicators in real-time to allow the top leadership to quickly review performance of projects and programmes being carried out under its and different departments, directorates, divisions.
This is a critical gap that allows wastage and inefficiencies to continue unbridled. A move to close this gap would mark a major improvement in governance.
New Institutions
1. Establishing a Center of Global Excellence: There is an urgent need to set up at least one Center of Global Excellence for postgraduate teaching and research focused on STEM (Science, Technology, Engineering, and Mathematics), Engineering, and ICT/AI (Information and Communication Technology/Artificial Intelligence) on the outskirts of the city within the next five years.
This centre will not only enhance the local education landscape but also aim to attract international scholars and researchers. If successful, it could serve as a prototype for future expansion into other disciplines such as Environmental Science, Renewable Energy, and Biotechnology across various locations in Bangladesh.
By learning from successful models such as the Indian Institutes of Technology (IITs) and other renowned institutions worldwide, we can develop a framework that prioritizes innovation, research, and quality education, thereby positioning Bangladesh as a regional hub for advanced research and study.
2. Reassessing Bangladesh Biman: For over half a century, Bangladesh Biman, the national airline, has failed to meet modern aviation standards and performance benchmarks. Its continued existence has largely depended on serving a captive market of migrant labourers, many of whom have reported poor service and inadequate services.
To ensure that Biman becomes a competitive player in the airline industry, the government must establish clear and measurable performance targets. Should Biman consistently fall short, we propose creating an entirely new airline-tentatively named Bangladesh Airways utilizing half of Biman's existing assets, but managed by an independent, world-class management company.
This dual-structure approach allows both airlines to target distinct markets and routes and foster healthy competition. If either airline fails to meet performance standards over a designated period, it must be permitted to exit the market, ensuring accountability and efficient service for travellers.
3. Establishing the Centre for Social and Behavioural Change Communication and Research (CSBCC&R): The establishment of an independent center dedicated to Social and Behavioural Change Communication and Research is essential in addressing the fragmented nature of current efforts in this critical area.
Presently, various departments handle communication initiatives without a cohesive strategy, leading to inefficiencies and missed opportunities. The CSBCC&R would centralize these efforts, providing a structured platform for both traditional media and digital communication strategies.
This centre would focus on modernizing communication approaches, employing evidence-based strategies to engage communities effectively.
By merging traditional methods such as community workshops and meetings with contemporary digital campaigns utilizing social media and online platforms, the CSBCC&R would create a unified and impactful communication strategy to drive social change, attitudes, norms and practices.
4. Creating a Regulatory Reform Commission (RRC): to address the pervasive issue of over-regulation and bureaucratic red tape that hinder business growth and foreign investment, the establishment of a Regulatory Reform Commission (RRC) is imperative.
This body will be tasked with continuously monitoring, evaluating, and streamlining the rules and regulations affecting all aspects of economic governance, including business operations, taxation, and trade. The RRC will actively identify regulatory inefficiencies, such as excessive paperwork, burdensome compliance requirements, and the discretionary powers of authorities like the National Board of Revenue (NBR) and the Customs Department.
By flagging these challenges to the government and relevant ministries, the RRC can advocate for reforms that facilitate a more conducive business environment. This initiative has the potential to dramatically enhance the ease of doing business in Bangladesh, making it an attractive destination for both domestic and foreign investors.
5. National Board of Revenue (NBR) Oversight Committee: A high-powered committee should be immediately constituted with proportionate representation from the private sector, civil society, and government to assess, evaluate and recommend to the Chief Advisor, how NBR should be restructured to remove inconsistent, arbitrary, and discriminatory policy/regulatory barriers related to customs, VAT and taxes.
Policy innovations from NBR (like back-to-back LC and the bonded warehouse system) transformed the RMG industry. Such innovations need to be continuously encouraged, instead of just focusing on revenue collection.
Urban Transport Initiatives
1. Implementing Automatic Traffic Signalling: Introducing an automatic traffic signalling system is a fundamental requirement for any major city worldwide, yet attempts to implement such a system in Dhaka have historically faced challenges, often collapsing due to resistance from vested interests.
Effective traffic management is crucial for alleviating congestion and improving the overall flow of vehicles and pedestrians on the roads. This initiative should be regarded as a "low-hanging fruit" because it is both actionable and capable of yielding immediate benefits. By utilising advanced traffic signal technology and data analytics, we can ensure that traffic lights respond to real-time conditions, thereby establishing a much-needed discipline to Dhaka's chaotic transportation network. This investment in infrastructure would not only enhance daily commutes but also contribute to overall urban development and improved quality of life for residents.
2. Transitioning to a Single-Operator Bus Franchise: The current model of public transport in Dhaka, characterised by multiple ownership of bus services, has led to significant confusion and chaos on the roads, directly impacting public safety and convenience.
To remedy this, a transition to a single-owner bus service franchise that brings all the fragmented owners together as one provider, has been recommended as a way to end urban bus transport chaos. This should be marked by a move to put drivers on a fixed salary rather than on a commission.
This will enhance public transport efficiency, increase ridership, and create a reliable, user-friendly public transport system that better meets the needs of the urban population.
Manufacturing, Investments, Exports and FDI
1. Cherry-Picking Winners: To advance export diversification in Bangladesh, two strategic policy approaches are sometime discussed: the first is to create a favourable regulatory environment that facilitates the natural emergence of successful industries/companies; the second, and a more targeted approach, is to actively "cherry-pick" high-potential firms and provide them with essential policy, financial, and technical support.
Evidence from recent successes in East Asian countries suggests that cherry-picking has yielded significant results. We advocate for this approach by identifying the most promising non-RMG (Ready-Made Garment) export performers among almost 1,500 entities currently exporting a minimum of $1 million annually.
By focusing our support on these select companies, we believe that a few could be nurtured to become substantial players in the market, thus contributing to broader economic growth and diversification.
2. Enhancing the One Stop Service (OSS) System: The much-discussed One Stop Service (OSS) designed to expedite investment proposal approvals remains an essential component of improving Bangladesh's investment climate.
However, its efficiency needs substantial improvement. Currently, the process involves four different entities, creating bureaucratic delays and complexity for investors. We propose consolidating all responsibilities under a single authority-specifically BIDA (Bangladesh Investment Development Authority). This streamlined structure would enhance accountability and provide clear guidance for investors navigating the system.
Additionally, integrating the PPP Authority's functions within BIDA would further simplify the investment landscape. A separate OSS focused on Micro, Small, and Medium Enterprises (MSMEs) is highly recommended to ensure that the sector receives the tailored attention it requires to foster growth.
3. Encouraging FDI in the Health Sector: The recent closure of the Indian medical market has accentuated the urgent need for high-quality healthcare within Bangladesh. To address this demand effectively, liberalizing FDI in the tertiary health sector is essential.
Although this idea has faced resistance from vested interests in the past, it is now imperative for the government to revisit the idea. Allowing foreign investments will significantly benefit local communities by providing access to quality medical services without the need for expensive medical tourism abroad.
Additionally, fostering competition in the healthcare sector will lead to better services, facilitate skills transfer among local healthcare providers, and establish vital backward and horizontal linkages with international and local health networks. The time has come for this market to be liberalised.
4. FDI in Technical and Vocational Education: The technical skill level of the workforce is a critical constraint to the country's economic growth. FDI into technical and vocational education could make a huge difference to the quality of the labour force.
Establishing or upgrading polytechnics that can award internationally recognized "foreign" certifications will elevate the perception and quality of technical education. This will address some of the bottlenecks in acquiring essential technical skills, thereby improving employment prospects and increasing wages for graduates.
A viable approach could involve converting existing polytechnics into colleges under the National University framework, allowing them to offer a two-year BA (Tech) degree. Such changes would not only help to upgrade the quality of education but also equip students with the necessary competencies required in a rapidly evolving job market. These measures will have a strong, much needed, 'gentrification effect' on the skilled- labour market.
5. Pursuing Economic Diplomacy for Enhanced Market Access: To ensure that Bangladeshi goods, services, and skilled labour gain greater access to broader international markets, a proactive approach to economic diplomacy is needed. This includes aggressively pursuing both bilateral and multilateral Free Trade Agreements (FTAs) that have, until now, seen limited progress.
Effective economic diplomacy requires not only skilled diplomats, but also robust communication campaigns tailored to potential partner countries. For Bangladesh, this means broadcasting comprehensive programs across various media platforms, including satellite television and social media, and in multiple languages, such as Chinese, Hindi, Korean, Japanese, English, and Russian.
Additionally, leveraging cultural exports like music and film can enhance the country's soft power internationally. Given the strength of the Ready-Made Garment (RMG) industry, Bangladesh can also capitalize on building its fashion industry to create new brands, and tap into global trends in fashion design.
6. Seizing Opportunities for Skilled Labor Exports: Several emerging economies are actively exploring avenues to import skilled labour to address severe labour shortages at home in sectors such as industry, healthcare, and services. Japan and South Korea are looking to Bangladesh as a potential source of skilled workers due to their declining and aging populations.
These countries are not only interested in hiring local talent, but they are also open to establishing training programs within Bangladesh to enhance skill standards prior to granting work visas. This initiative presents a significant opportunity for Bangladesh to develop its human capital while simultaneously addressing global labour shortages. Such collaborations could create pathways for skilled migrants to find meaningful employment abroad while contributing to the local economy, representing a win-win scenario.
7. Revitalizing Special Economic Zones (SEZs): Special Economic Zones (SEZs) have garnered considerable political and media attention in Bangladesh; however, actual progress toward their establishment and full operationalization has been meagre.
The upcoming critical phase involves selecting a handful of SEZs and ensuring they deliver meaningful results in terms of attracting investment, fostering foreign direct investment (FDI), and promoting exports.
Historically, several reasons, such as bureaucratic hurdles, inadequate infrastructure, and unclear policies, have hindered the successful execution of SEZs. It is imperative that the government address these issues head-on to streamline the process and establish clear precedents for attracting investment.
Crosscutting Actions
1. Leveraging Digital and AI Technology Across Sectors: A major strategic emphasis is required within key sectors such as education, health, agriculture, and public institutions to facilitate the widespread adoption of digital and artificial intelligence (AI) technologies.
For instance, employing satellite sensing technology can enable effective crop early-warning systems to improve agricultural practices, while distance education can ensure that learning continues uninterrupted regardless of geographical barriers.
By integrating these advanced technologies, we can enhance quality, efficiency and access across multiple sectors, ultimately improving outcomes for the entire population.
2. Reducing the Digital Divide: A critical strategy to utilize digital and AI technologies effectively is to bridge the existing digital divide. This involves reducing data costs, increasing access to affordable smartphones-implemented with appropriate safeguards for age-specific content and fostering the growth of a robust domestic software and hardware ICT industry.
By promoting widespread digital access, we can empower citizens, enhance digital literacy, and stimulate innovation within the ICT sector.
3. Reforming the Planning Process: Bangladesh's planning process has faced significant challenges that have led to inefficiencies and a lack of coherence in policy implementation. Reforming this process is of utmost urgency, as detailed in Chapters 8 and 14.
This reform initiative requires a comprehensive thrust in governance practices, monitoring and evaluation (M&E) frameworks, and improved policy-making processes. Additionally, project implementation arrangements and inter-departmental coordination must be enhanced to ensure that development goals are met effectively and efficiently.
4. Professionalisation of Leadership Positions: It is crucial for the government to assign qualified technocrats to leadership positions within technical departments, divisions, and institutes, rather than appointing generalists who may lack necessary expertise.
This shift away from archaic practices will ensure that leadership is informed and capable of making critical decisions relevant to their fields. The immediate benefits of such a strategic change could include improved project outcomes, better service delivery, and heightened accountability within public institutions.
5. Combating Everyday Extortion: A recurring and significant issue faced by citizens in accessing public services such as purchasing train tickets or obtaining passports-is the prevalence of extortion. This deeply entrenched problem extends beyond public services into markets, transportation systems, and construction sites.
To address this urgent concern, we strongly recommend the establishment of an independent "Anti-Goon Squad." This dedicated unit could operate within the public sector or be outsourced to private security firms, provided there are robust safeguards to prevent misuse.
Moreover, monitoring and oversight by Youth and Citizen groups must play a central role in ensuring the squad's effectiveness. Continuous fine-tuning and adjustments to its operational procedures will be necessary to keep the initiative responsive to emerging challenges.
6. Improving Government Efficiency: There is substantial scope for efficiency gains within government operations, particularly given reports of high waste levels.
Strategies to enhance operational efficiency may include transitioning to paperless offices, minimizing ceremonial and protocol-related expenses, reducing unnecessary construction of facilities, and limiting the frequency of meetings to save time and resources. Identifying and implementing these 'minor adjustments' collectively can result in significant improvements in government efficiency.
7. Implementing NID-Based Open Data Platforms: Establishing open data platforms based on the National Identity (NID) system-similar to India's Aadhar card can revolutionize service delivery across numerous sectors.
These platforms can facilitate access to finance, efficient distribution of subsidies, social protection programs, tax compliance, bank account openings, and meeting Know Your Customer (KYC) requirements. This digital intervention has already been tested successfully in other contexts and promises to have a transformative, economy-wide impact.
8. Establishing Emergency Reserves: To bolster food security, Bangladesh currently maintains reserve stocks of food commodities. We recommend expanding this approach to include additional security reserves for essential goods such as diesel, fertilizers, and edible oils all of which are prone to price volatility due to reliance on imports.
While long-term strategies, such as transitioning to solar and wind energy or increasing local production of edible oil seeds, are vital, establishing in-country security reserves can provide more immediate stability in pricing and supply.
9. Removing political influence from the banking sector: A powerful vested interest group has played pivotal role in weakening the sector for decades. This needs to be dismantled. The Bangladesh Bank must be allowed to function independently, as per the Bangladesh Bank Amendment Bill 2003.
A single individual or group of individuals should not be allowed to obtain majority ownership of more than one commercial bank. No new bank licenses should be given out on political grounds. Use of public funds to recapitalise poorly governed commercial banks needs to stop. An exit policy for troubled banks should be formulated to protect the depositor interest.
Miscellaneous Actions
1. Utilizing Degraded Lands for Solar Energy: Despite land scarcity in Bangladesh, there remain significant amounts of degraded and unused land available in both private and public sectors. Identifying and repurposing these lands for solar parks could enhance renewable energy production.
The Tea Garden Association has already put forward a proposal that warrants further investigation. Additionally, rooftop solar installations in urban areas could be incentivized through net metering, contributing to effective energy generation and consumption.
2. Exploiting Existing Gas Fields: Considering the current severe gas crisis, which is exacerbated by foreign exchange constraints, a relatively straightforward solution lies in exploring and exploiting existing gas fields to tap into additional reserves that are likely to be present.
This initiative can be efficiently undertaken by BAPEX (Bangladesh Petroleum Exploration and Production Company Limited) at a relatively low cost. By focusing on maximizing the output from existing fields, Bangladesh can alleviate some of the immediate pressures caused by the gas crisis, reduce reliance on imports, and support the energy sector's stability while longer-term energy solutions are developed.
3. Regulating Sand Extraction: Sand extraction is critical to meeting the demands of the construction industry; however, it has also sparked significant environmental concerns. The government previously enacted the Balumahal Act of 2010 to regulate sand extraction and prohibit activities in sensitive areas like riverbeds, residential zones, and tea gardens.
Unfortunately, unregulated and illegal sand mining has persisted, leading to severe erosion, water pollution, and disruption of the natural hydrology of rivers. It is imperative to scientifically identify and establish appropriate sand mining areas while enforcing stringent regulations to curb malpractice.
This approach not only protects environmental integrity but also addresses the grievances of local communities affected by irresponsible sand extraction.
4. Streamlining Public Service Call Centres: The proliferation of numerous call-centre numbers dedicated to public services both general and emergency creates confusion and inefficiency for citizens seeking assistance. To enhance efficiency and response times, we recommend consolidating these services into two central numbers: one for general inquiries and another for emergencies.
Additionally, incorporating AI technology into these systems can increase operational efficiency, reduce wait times, and improve overall user experience. By optimizing this service, the government can better serve its citizens and streamline communication processes.
5. Establishing a "Dhaka Haat" for SMEs: To promote small and medium enterprises (SMEs), the government should consider setting up a "Dhaka Haat," modelled after Delhi's successful handicraft market, which operates year-round to showcase SME products.
This venue can provide a dedicated space for local artisans and small businesses to display and sell their goods, fostering economic growth and encouraging entrepreneurship. Managed under the aegis of the SME Foundation, this initiative would not only enhance visibility for local products but also support capacity building within the SME sector.
6. Re-Categorizing SMEs (Also Labelled as MSMEs): The vast and diverse grouping of small and medium enterprises (SMEs) also labelled as micro, small, and medium enterprises (MSMEs) lacks an organic justification and must be re-categorized. Each category within the SME spectrum faces distinct challenges and opportunities, which should be recognized to ensure that policy support is effective and appropriately targeted.
Without addressing this need for re-categorization, policy initiatives risk concentrating assistance on larger enterprises within the sector while neglecting smaller firms that may require tailored support to overcome their unique barriers. A targeted approach will ensure that all SMEs, regardless of size, receive the necessary assistance to thrive.
Conclusion
The actions and recommendations presented serve as an initial roadmap for economic reform, embodying a vision for a transformed Bangladesh that is responsive to its people's needs. By prioritizing impactful projects in healthcare, education, and governance, the interim government can restore trust in public institutions and create momentum for sustained progress.
Pilot projects will provide valuable insights, enabling iterative improvements and broader implementation in future reforms. The use of digital and AI technologies, along with the establishment of institutions promoting excellence and regulatory reform, will enhance Bangladesh's competitive position globally.
Ultimately, these recommendations call for a shared responsibility between government officials and citizens to build a better future. With strong leadership and strategic planning, Bangladesh can turn challenges into opportunities, fostering a prosperous, equitable, and resilient nation for current and future generations.
