Debapriya Bhattacharya at a book unveiling programmeBD heading toward ‘political and social earthquake’

Dr Debapriya Bhattacharya, Distinguished Fellow at the Centre for Policy Dialogue (CPD), said on Thursday that the bureaucracy had played a major role in supporting the previous government’s acts of financial misappropriation.

He also said that the consequences of long-suppressed vulnerabilities in the banking sector which he believes bureaucrats contributed to – are now fully surfacing.

Dr Debapriya made the remarks at a book unveiling programme at the Economic Reporters’ Forum (ERF) in Dhaka.

He said that key individuals must be held accountable for their collaboration in acts of misappropriation.

“If we have to name two or three individuals, the head of the central bank would be among the key accused. His wrongdoing is very serious because it was his responsibility to ensure accountability and transparency,” he said.

Hidden banking sector ‘illnesses’ now exposed

Responding to a question about the sharp rise in non-performing loans (NPLs), Debapriya, who is also a Distinguished Fellow at the Centre for Policy Dialogue (CPD) said forensic audits conducted in recent months have uncovered the true state of the banking sector.

“The NPLs that had been concealed have now been exposed. Provisioning shortfalls and reserve deficits have also been revealed. It is not just that NPLs have increased, capital gaps have also come to light,” he said.

“In truth, you did not know your body had so many illnesses. Now that these have been identified, you are feeling alarmed. There is no reason to panic simply because the internal weaknesses have become visible.”

Debapriya also questioned the government’s approach to solving the crisis. “Other than merging five banks, appointing administrators, and reverting some parts of the Banking Companies Act – what else has been done? We want to see what has been achieved in terms of good governance,” he said.

Drawing attention to broader national risks, the economist warned that Bangladesh may face a major “political and social earthquake,” far greater than the physical earthquake the country recently experienced.

Concerns over foreign investment and port management

Debapriya criticised the government’s hurried announcement of foreign investment proposals regarding the lease of a terminal at Chattogram port, especially in the absence of structural reforms.

“Announcing massive foreign investment commitments within just 13 days is unrealistic. Decisions taken behind a Non-Disclosure Agreement lack transparency. Large decisions do not last without stakeholder participation,” he said.