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Fiscal Accountability and the Parliament: The Case of Budget Making Process in Bangladesh

Monthly Bangladesh Economic Update, July 2017

July 2017

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, in its July 2017 issue of Bangladesh Economic Update, states that lack of fiscal accountability due to limited role of the parliament in budget making process together with constitutional and systematic rigidities results in inefficiency, poor implementation of budget and misuse of public resources.

To deal with the problem, the research organization calls for immediate adoption of necessary reform measures that may include revision of budget-related constitutional provisions, expansion of scope of parliamentary surveillance over fiscal management, and strengthening of concerned parliamentary standing committee.

The think tank finds that the status of budget implementation is on the decline since FY 2010-11. Of the total budget outlay, 97.05 percent was implemented in FY 2010-11, whereas the rate subsequently decreased to 93.18 percent, 90.76 percent, 84.59 percent, and 81.59 percent in FY 2011-12, FY 2012-13, FY 2013-14, and FY 2014-15 respectively.

 

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“The Road Not Taken” A Rapid Assessment of National Budget 2017-18

Monthly Bangladesh Economic Update, June 2017

June 2017

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, states that the proposed budgetary measures for FY 2017-18 fall short in addressing high prices, sluggish growth in real sector, rising joblessness, dwindling social sector spending, and institutional weaknesses. 

The budget speech seems to lack providing prudent and farsighted solutions to the current challenges except it earmarks an ambitious target of expenditure amidst inefficient distribution of resources and cost overrun, says the organization in its rapid assessment of the proposed national budget for the FY 2017-18.

“The Finance Minister concedes “still have many miles to cover,” and stops “by woods on a snowy evening” (the title of the poem that he quotes is “Stopping by Woods on a Snowy Evening”). He could have taken “the one less traveled by” and that could have “made all the difference” (the last two lines of Robert Frost’ another poem, “The Road Not Taken”) – says the think tank to metaphorically refer to the context of the proposed budget.

 

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A Pre-Budget Analysis of Major Economic Challenges

Monthly Bangladesh Economic Update, April 2017

April 2017

The Unnayan Onneshan (UO), an independent multidisciplinary think tank, in its pre-budget issue of Bangladesh Economic Update calls for prudent fiscal management in dealing with potential economic risks and vulnerabilities in the year ahead.

In identifying the major economic challenges as regards the national budget 2017-18, the UO notes that waning capacity of the authority in implementing budget is looming large.

Both the collection of revenue and implementation of expenditure, especially Annual Development Program (ADP), have fell short of target in the current fiscal year.

The private investment stagnates, and public investment lacks quality resulting in cost escalation in projects. In addition, upsurge in illicit capital outflows bars capital formation in the economy.

Inadequate spending on social sector is likely to limit improvements in human development. Higher allocations for health, education and social security are indispensable to sustainable development.

 

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Debt and Deficit: Trends and Challenges

Monthly Bangladesh Economic Update, March 2017

March 2017

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, in its monthly publication of the ‘Bangladesh Economic Update’ March 2017, reveals that persistently increasing outstanding debt along with high debt-service payment every year is likely to lower development finance and escalate intergenerational debt burden in the future.

The research organisation in its eighth year of this monthly publication notes that at the end of FY 2015-16, the total outstanding domestic debt has increased by 17.7 percent while the total outstanding external debt burden increased by 10.1 percent. However, during the period of July-January of FY 2016-17, total outstanding domestic debt increased by 18.21 percent while foreign aid decreased by 16.53 percent compared to the corresponding period of FY 2015-16.

The debt-gross domestic product (GDP) ratio is on the rise since FY 2012-13. Statistics suggest that the outstanding domestic debt as percentage of GDP was 15.11 percent in FY 2012-13, 15.12 percent in FY 2013-14, and 15.23 percent in FY 2014-15, and 15.55 percent in FY 2015-16. In the first seven months of the current fiscal year (July-January of FY 2016-17), the ratio increased to 14.35 percent in compared to 13.76 percent in the corresponding period of FY 2015-16.

 

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External Sector: Recent Trends and Challenges

Monthly Bangladesh Economic Update, February 2017

February 2017

The Unnayan Onneshan (UO), an independent multidisciplinary think-tank, in its monthly publication of the ‘Bangladesh Economic Update’ February 2017 reveals declining growth in two major external sector indicators – export shipment and wage earner’s remittance, and consequential deficit in current account balance are likely to exert pressure on the country’s balance of payment.

Calling for a thorough reexamination of the current trade and industrial policies to address the structural bottlenecks and creation of a stable business climate to attract increased inflow of private investment including FDI, the UO urges for the adoption of new strategies aimed at expanding country’s productive capacities that enhance utilization of available resources through efficient entrepreneurial capabilities and increased production linkages.

Referring to declining rate of growth in inflows of wage earner’s remittance, the think tank shows that the inflow of remittance declined by 17 percent and amounted to USD 8112 million in July-February of FY 2016-17 compared to the corresponding period of the preceding fiscal year. On monthly basis, the remittance inflow stood at USD 936 million in February 2017 (a decline by 17.6 percent from February 2016), which is lowest in the first eight months of the current fiscal year.

 

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