
Bangladesh stands at a pivotal moment in its economic evolution. With a new government in place and a renewed commitment to reform, the opportunity to reshape the nation’s economic and institutional architecture has never been more urgent. The White Paper on the State of the Economy (December 1, 2024) offered a candid assessment of past missteps and a blueprint for building an economy that serves the people—not just the powerful. It revealed that corruption has been a chronic affliction, costing the nation an estimated USD 234 billion over the past fifteen years. These funds could have been invested in employment-generating projects, lifting millions out of poverty.
To recover this stolen wealth, a Presidential National Accountability Ordinance (NAO) must be enacted urgently, by the establishment of a powerful National Accountability Bureau (NAB). This body should be operational within two months and begin asset recovery efforts by the third.
Successful models exist. Pakistan’s NAB, for instance, has recovered USD 20 billion in stolen assets over the past two years alone. Bangladesh can adapt such frameworks to its own context, ensuring swift and impartial justice.
Reimagining Anti-Corruption Infrastructure in Bangladesh
Bangladesh’s existing anti-corruption body—the Anti-Corruption Commission (ACC)—was established to investigate and prosecute corruption. However, its credibility has eroded, often accused of targeting opposition figures while shielding ruling party affiliates. This politicization has rendered the ACC ineffective, necessitating a structural overhaul.
The proposed NAB, inspired by Pakistan’s NAO framework, is envisioned as a transformative institution—independent, professionally managed, and empowered by a robust legal framework. It would investigate major offenses such as embezzlement, abuse of authority, and money laundering, and operate under the principle of “Accountability for All.”
Key features include:
- A dedicated Accountability Court for swift justice
- Authority to arrest suspects, freeze assets, and access financial records
- Provisions for voluntary asset return and pardon of accomplices to expedite recovery
- International cooperation for cross-border corruption cases
This framework would restore public trust and institutional integrity—if backed by genuine political will and public oversight.
Economic Progress Under the New Government
Since assuming office in August 2024, the current government has made measurable progress in stabilizing key economic indicators. According to data from the Bangladesh Bank:
- The trade deficit narrowed by USD 2 billion
- Foreign exchange reserves increased by USD 5 billion
- Inflation declined by 3.11% (point-to-point)
- Home remittances rose by USD 6 billion
These improvements, achieved amid global economic headwinds, reflect prudent fiscal management and a renewed commitment to reform. GDP growth in 2024 was 4.22%, compared to 5.78% in 2023. However, this figure spans two administrations—seven months under the previous government and five under the current one. The full-year 2025 data will offer a more accurate reflection of the current government's impact.
Growth is expected to remain moderate due to the burden of non-performing loans in the banking sector, inherited from the previous administration. These liabilities may necessitate austerity measures, limiting development expenditure and dampening economic momentum.
Post-Uprising Economic Stabilization: A Comparative Perspective
Bangladesh’s post-transition recovery has drawn attention for its relative resilience. Unlike other countries that experienced regime upheavals—such as Sri Lanka, Indonesia, Iran, and Russia—Bangladesh has thus far avoided hyperinflation, mass poverty, or prolonged instability.
This outcome is largely attributed to a series of decisive policy interventions implemented by the interim government, including:
- Tightening monetary and fiscal policies
- Conducting asset quality reviews
- Recovering misappropriated assets
- Ensuring banking sector liquidity
- Reforming revenue collection by separating tax policy from administration
These measures helped stabilize inflation, restore investor confidence, and prevent a deeper economic collapse. The policy interest rate was raised to 10%, anchoring the exchange rate and curbing inflationary pressures.
Bangladesh’s experience underscores the importance of institutional reform, transparency, and decisive governance in navigating post-crisis recovery. It also reinforces the broader argument for structural transformation laid out in this article.
Navigating Fiscal and External Challenges
The government faces a delicate balancing act between managing the budget deficit and the balance of payments. On the expenditure side, while foreign debt costs are fixed, domestic borrowing costs can be reduced by retiring high-interest bonds and issuing lower-coupon alternatives. A 200 basis point interest rate cut could save USD 2.16 billion annually, stimulating growth with minimal inflationary impact.
On the revenue side, a progressive property tax structure should be introduced. Raising the rate from the universal 5% to 8–10% for wealthy individuals could generate significant revenue, though exact estimates require further analysis.
To ease pressure on the balance of payments, Bangladesh should explore reducing its USD 300 million vehicle import bill and USD 330 million edible oil imports. Promoting public transportation and domestic cultivation of oil-producing crops could cut these costs by half, enhancing self-reliance.
Citizen Ownership: A Path to Inclusive Prosperity
Bangladesh belongs to its people. To democratize economic growth, the government should consider allocating partial ownership of selected state assets directly to citizens. Inspired by Norway’s sovereign wealth model, this initiative could provide annual dividends, reduce inequality, and foster national stewardship.
A National Citizen Wealth Fund could be established, seeded with revenues from strategic sectors like energy, telecom, and infrastructure. Managed transparently, this fund would empower citizens economically and strengthen civic engagement.
Conclusion: Building an Economy for the People
The road to economic justice and prosperity in Bangladesh is long but navigable. By institutionalizing accountability, rationalizing fiscal policies, and empowering citizens through equitable asset ownership, the nation can move beyond short-term fixes toward sustainable development. The vision must be clear: an economy not just measured by growth figures, but by the well-being, dignity, and opportunity it provides to every Bangladeshi. The time to act is now.
References:
- https://bdplatform4sdgs.net/wp-content/uploads/2025/02/Final-Draft_Unedited_0911-hrs_Compiled-Report-without-Front-and-Back-Cover.pdf
- https://khalidzafar.com/wp-content/files_mf/1527157757NationalAccountabilityBureauOrdinance1999.pdf
- https://nab.gov.pk/recoveries/
- https://www.arabnews.com/node/2611227/amp
- https://www.bb.org.bd/en/index.php/econdata/bopindex
- Bangladesh's Economy After Mass Uprising | Bangladesh’s economic performance has been unique post-uprising
About the authors:
Mohammad Masud Alam is a retired banker having worked in Societe Generale Bank, Bank of Montreal, National Bank of Oman and United Bank Limited.
Dr. Habib Siddiqui is a peace and human rights activist and author who has successfully deployed Operational Excellence initiative within four major multinational corporations.