The policy formulation and implementation processes must therefore be informed by evidence and. research that brings out the needs and aspirations of the people. As different stakeholders may view policy priorities differently, the policy process typically involves many debates. The entrepreneurial talents of Bengal, suppressed during the Pakistan era, should be allowed to flourish in independent Bangladesh.
The regime could not counter the sentiment of radicalized students and industrial workers who were in favor of public property. Bangladeshi entrepreneurs could not have bought and run these units without significant financial and other support from the government. The benefits of large-scale public ownership of industry would be reaped by the politically powerful elements of society and not accrue to the masses.
Since the government has declared its intention to build a socialist economy, all major industries must be nationalized regardless of the ethnic origin of the owners. A key issue in the discussions with Bangabandhu revolved around the fate of Bengali industrialists... Radical Stand Limit the space for private companies Maintain the ceiling of Taka 25 lakhs for private companies introduced in March.
1972 Middle-of-the road
Under the irrigation management model of the 1970s, shallow tube wells (STWs) were sold to farmers. Deep tube wells (DTWs) and low-lift pumps (LLPs) were owned by the public sector BADC, but leased to farmers' cooperatives. Early 1970s; BIDS collaborated with BADC to conduct field studies on the occupancy rates of DTWs and LLPs.
For example, BIDS economist Mahmudul Alam studied the use of DTWs in the Comilla Thana for the period 1962/63 to 1971/72. DTWs and LLPs owned by BADC were sold to cooperatives or individuals/groups instead of rented to cooperatives. Owning irrigation equipment was expected to increase motivation to increase coverage and maintenance of the machines.
Contrary to expectations, capacity utilization was higher and irrigation costs lower in irrigation pumps operated according to the traditional model (leased to cooperatives or individuals) than for pumps owned by cooperatives or individual farmers. New irrigation equipment was mainly bought by large farmers who sold the water to others.
Index of total irrigated land (1980=100)
Mahmudul Alam finds serious
1985/87: A set of controls imposed on irrigation
Groundwater Management Ordinance
1985), Groundwater Management Rules (1987)
Late 1980s – early 1990s: Substantial
The Ministry of Agriculture, concerned about farmers' yields, wanted to maintain a high purchasing price for rice. Studies by economists provide very useful data on the operation of the public food distribution system. Mid-1980s: BIDS economist Nuimuddin Chowdhury conducts a series of rigorous studies on the rationing system, both its urban and rural versions.
Chowdhury said of statutory rationalization (SR) beneficiaries, “SR beneficiaries are usually elitist. Chowdhury's study of a limited rural ration system, the so-called modified ration (MR) system, also showed that the poor did not necessarily benefit from the system. Akhter Ahmed of IFPRI found that 70% of the estimated annual subsidy of US$60 million for foodgrains has flowed away from non-poor households.
Development partners (such as USAID and the World Bank) that had pressed for more substantial reforms in the ration system are emboldened, as is the Ministry of Finance. At the end of 1994/95, it was equivalent to 6.31 months of imports, one of the highest levels achieved in Bangladesh. Within six years, this important indicator fell from one of the highest levels in Bangladesh's history to one of the lowest.
Number of months of imports covered by forex reserves
Given the overall policy environment and external vulnerabilities, the usefulness of the fixed exchange rate system has run its course. The economic and institutional conditions of a floating exchange rate regime, such as advanced financial institutions and broad and deep foreign exchange markets, were not met in Bangladesh. No major deviation from the equilibrium exchange rate has occurred, nor is that allowed for the real effective exchange rate.
He was aware of the risks, but did not shy away from reform because of the risks. Instead, he first decided to build capacity in Bangladesh Bank to manage market liquidity so that speculative attacks on the Taka could be minimized. The central bank needed tools to both assess excess liquidity in the market and to dry it up as needed.
Ahmed asked for help from both the IMF and other central banks in the region. The help came immediately, and it was only after building sufficient capacity to manage liquidity that the government decided to float the exchange rate in May 2003. This policy episode has an important lesson for economic management in Bangladesh: Risks can be assessed and managed.
Monzur Hossain and Mansur Ahmed studied the effects of this policy reform in a paper published in 2009. Hossain and Ahmed concluded: It was de jure a free-floating exchange system, but de facto a managed drive. It appears that by opting for a de facto managed drive system, the government has finally settled on a middle ground between Fakhruddin Ahmed's proposal to move to a free-floating exchange rate and Mirza Azizul Islam's to maintain it.
A history of policy debates in Bangladesh shows that such compromises have often been the way the debates were resolved.
