Over the past 15 years, $60 billion has been invested in Bangladesh's Annual Development Programme (ADP) and various development projects.
However, a significant portion—estimated between $14 billion and $24 billion (BDT 1.61-2.80 lakh crore)—has reportedly been lost due to political extortion, bribery, and inflated budgets.
This finding comes from the White Paper on the Bangladeshi economy, presented today by Dr. Debapriya Bhattacharya, Distinguished Fellow at the Centre for Policy Dialogue (CPD), at a press briefing held in Sher-e-Bangla Nagar, Dhaka.
The report highlights that corruption in large-scale public projects has led to an average cost increase of 70% and delays of over five years. Additionally, irregularities during land acquisition and the selection of politically favored project directors have wasted resources, reducing the potential benefits of infrastructure and social development investments.
Tax evasion, misuse of tax exemptions, and poorly managed public finances have further weakened the economy, depriving the state of crucial funds for development. Between 2009 and 2023, Bangladesh saw an average of $16 billion in illicit financial outflows annually—more than double the combined inflow of foreign aid and direct investments. Cutting tax exemptions by half, the report suggests, could significantly increase funding for education and healthcare.
Manipulated production data and underreported demand for essential goods like rice, oil, and wheat have destabilized markets. Unpredictable and politically influenced procurement policies have benefited a few powerful groups, while ordinary people have suffered. A lack of consistent stock monitoring has worsened these issues.
The report also draws attention to the country's banking crisis. Politically driven lending practices have increased non-performing loans, which now represent an amount comparable to the cost of building 14 Dhaka Metro systems or 24 Padma Bridges. Persistent loan defaults and financial scams have weakened the banking system, diverting resources from productive sectors.
The remittance sector has been similarly affected. Over the last decade, BDT 13.4 lakh crore (BDT 1.34 trillion) has been funneled through illegal hundi transactions by recruitment agencies for visa purchases—four times the cost of constructing the Dhaka Metro Rail project (Uttara-Motijheel). Corruption in the recruitment process has exploited migrant workers, reducing their contributions to the economy.
Social safety nets have not been spared either. Mismanagement in these programs has left many vulnerable individuals without proper support. In 2022, 73% of beneficiaries of social safety programs were identified as non-poor, up from 66% in 2016. Meanwhile, over 20 million people remain at risk of falling into poverty after just two days of lost income, underscoring the inequality exacerbated by corruption.
The report also sheds light on environmental challenges. Mismanagement and corruption in climate adaptation funds have worsened environmental degradation, delaying sustainability initiatives and increasing the risks posed by climate change.
The findings emphasize how systemic corruption has affected various sectors, undermining the country's development and stability while increasing inequality and hardships for ordinary people..
BDST: 1428 HRS, DEC 02, 2024
MSK
