Economic policy

Unbiased data is essential for sound economic policy

Prominent Economist Nurul Islam Says at BIDS Conference

Professor Rehman Sobhan, President of the Center for Policy Dialogue, delivers a keynote address virtually during the BIDS Annual Development Conference at the Lakeshore Hotel in Dhaka yesterday. MA Mannan, Planning Minister, Mashiur Rahman, Economic Affairs Advisor to the Prime Minister, and Binayak Sen, Director General of BIDS, were present. Picture: star

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Professor Rehman Sobhan, President of the Center for Policy Dialogue, delivers a keynote address virtually during the BIDS Annual Development Conference at the Lakeshore Hotel in Dhaka yesterday. MA Mannan, Planning Minister, Mashiur Rahman, Economic Affairs Advisor to the Prime Minister, and Binayak Sen, Director General of BIDS, were present. Picture: star

Independent agencies that collect data, analyze it and get the results to guide the government are of utmost importance as they help authorities make informed decisions, a renowned economist said yesterday.

“If government agencies and politicians interfere in analyzing the data, they will never get the right answer and they will be blamed tomorrow for their failure today,” said Nurul Islam, former vice president of the planning commission that worked with the Father of the Bangabandhu Nation. Sheikh Mujibur Rahman.

“It is important to let data collection be done independently and also research by independent agencies.”

He spoke at the BIDS Annual Development Conference at the Lakeshore Hotel in Dhaka on the occasion of Bangladesh’s 50th anniversary. Organized by the Bangladesh Institute of Development Studies, the three-day conference kicked off yesterday.

“They [policy-makers] can accept the results. If they can’t, they can explain to people why they can’t.

Thus, their inability is understood by posterity and the present generation.”

Mashiur Rahman, economic affairs adviser to the prime minister, said the planning mechanism in Bangladesh is autonomous and has enjoyed its independence without interference from political leaders.

Nurul Islam, Fellow Emeritus of the International Food Policy Research Institute, described economic policy-making by the Ministry of Planning and the Ministry of Finance as important.

“Analysis must be apolitical. Otherwise, economic policy-making is impossible.”

“It cannot be outsourced. I know in Bangladesh this type of research is outsourced,” he said, without giving names.

“It’s destructive in my view of government capacity building.”

Islam said that during his time as head of the Pakistan Institute of Development Economics, he enjoyed complete research independence.

He worked with Bangabandhu from 1972 to 1975. “I discussed corruption, bad governance and other issues with him, and he was very candid with me.”

“He allowed me to give him all the facts… the ruthless details. Bangabandhu also allowed the facts to come out, whether he made decisions or not was his business,” Islam said, adding that he had allowed complete independence of data collection and research.

Those who are Bangabandhu’s supporters should remember how Bangabandhu handled independent data collection and research, the former deputy head of the planning commission said.

He called nepotism, favouritism, embezzlement and the seizure of state power corruption, and urged BIDS to conduct research in these areas.

He said there was something wrong with the management of departments that do not allow civil servants to stay in research.

Binayak Sen, Director General of BIDS, said Bangladesh is fast becoming a manufacturing nation.

This largely explains why Bangladesh is catching up with its regional neighbors in terms of economic and social parameters. “Bangladesh’s success in urbanization mirrors its success in manufacturing,” he said while presenting a paper.

In his keynote address, Professor Rehman Sobhan, President of the Center for Policy Dialogue, said that in independent Bangladesh, loan funding from a public financial institution has indeed served to create a great class of entrepreneurs.

“But this was achieved at the cost of defaults by the new class of private entrepreneurs. This default has been perpetuated and tolerated over the years and remains with us under what is known as the default culture.”

On the role of working women in driving the entrepreneur revolution, Professor Sobhan said that what is noticeable in the entrepreneur revolution is the rise of female entrepreneurship at all levels.

“Arguably, this revolution has its roots in the microfinance revolution initiated in Bangladesh by Muhammad Yunus through Grameen Bank and Fazle Hasan Abed through Brac.”

Professor Sobhan said there is ample research evidence to confirm that microfinance has served to alleviate extreme poverty, created entrepreneurial capacity in women and provided them with a ladder to access larger scale economic activities in the SME sector.

Highlighting the entrepreneurial spirit of migrant workers, he said, thanks to the courage and entrepreneurial spirit of young people, Bangladesh earns about 20 billion dollars in official remittances and perhaps 5 billions more in unofficial payments.

This has increased gross national savings, improved external balance payments, and increased domestic payments. But they are exploited and exposed to enormous rent extraction by unscrupulous intermediaries.

He described NGOs and social entrepreneurs as agents of social mobilization.

In a paper presented at the conference, Zahid Hussain, a former senior economist at the World Bank in Dhaka, said the rate of implementation of the annual development program had recently fallen to its lowest level in 11 years.

“Our problem has never been the lack of intention to spend more; the problem is our ability to translate our intentions into meaningful actions.”