The economy is now in a fairly balanced state, we are better than other countries, said Finance Adviser Dr. Salehuddin Ahmed.
He made this comment at a meeting on the role of remittances in the economy of Bangladesh at the Bangladesh Secretariat Reporters Forum (BSRF) office on Sunday (February 9).
He said, the economy is now in a fairly balanced state, I will not claim that it is completely in balance. Foreign debt payments are being made; we are trying to start something. What would have happened if we had not come, maybe we would have heard stories of development, the price level has decreased, etc. etc.
In response to a question regarding the increase in VAT in the middle of the fiscal year, he said, there was no opportunity to increase the immediate tax, Tk. 12 thousand crore is not a lot of money. 300 police vehicles have been burnt, where we will get that money, where will it come from. If there is VAT on slippers, I will review it, many people ask why VAT on biscuits, I will definitely see if it is at a low level. If the biscuits are expensive, VAT will have to be paid. But the gap is too big, we are walking on a tightrope, there is danger in both directions.
He said, remittances are one of the net foreign reserves. More than 2 billion remittances have come in a month, they are our unsung heroes. Not all remittances are sent through banking channels, some come through hundis. This leaves dollars outside. What happens if remittances do not come through legal channels, reserves decrease, and the macro economy is affected? Saudi Arabia's remittances also come through hundis via Dubai.
Criticizing the high cost of sending workers abroad, he said, agents charge more, Nepal and other countries do not charge so much. It is time to reduce the number of unskilled workers; they should be trained and sent.
Many are forced to go abroad illegally; this is partly the responsibility of our policy makers. A large part of them are illegal in Saudi Arabia, we pay less attention to them, they need to be addressed, he commented.
He said, the big challenge is that expatriates often return destitute. They cannot do anything after returning home. Sometimes they are cheated. If some part can be saved or invested, it is possible. In response to a question, he said, the expatriate scheme, universal pension insurance is certainly important. There are some inconsistencies in universal pension insurance; we are trying to make the matter up-to-date.
In response to a question about whether the incentive for remittances will be in the next budget or not! He said, the matter is not about the budget, the Central Bank can take a decision at any time.
How logical is it to put pressure on the economy by giving former promotions to government employees! Without directly answering such a question, he said, we are trying to reduce the expenditure; they have been deprived for a long time. We are under pressure by blocking roads daily and protesting daily.
Regarding the conditions of the IMF loan, he said, do we have to accept all the conditions, increase VAT, how many obstacles are there in increasing it? When I was the governor, the default was 29 thousand crore taka, now the default debt is Tk. 2.5 lakh crore. This money belongs to the people, it has to be returned. We are working thoughtfully, but everything may not always be good for everyone.