Issue 15

June 2022

The Cover article in this issue of Policy Insights summarizes the findings from research conducted by PRI, on the state of consumer protection in Digital Financial Services in Bangladesh. The authors provide insights on the profile of users and agents in the DFS landscape and consider the factors in regard to fraud in the medium. The research intended to understand the socio-economic profile of users, and the quality of their experience with the services. This would enable to understand the propensity of different types of fraud in the sector, the socio-economic features that make people vulnerable to fraud, and to what extent satisfactory redress is available when a customer or an MFS Agent experiences fraud.   

An article in this issue discusses a dozen growth fundamentals where Bangladesh quantitatively lags high-performing East Asian developing countries and Vietnam when they were at similar income levels.  Although the eighth five-year plan recognizes these critical issues and targets for achievement by 2024-25, the fact that high-performing East Asian economies had already attained these targets when they were at the same per capita income level as we had in 2019 suggests there is an urgent need to catch up.

Another article in this issue of Policy Insights shed light on the pivotal issue of climate finance. It presents the current progress in climate finance in the context of Bangladesh as well as highlighting its shortcomings. It further provides feasible options to strengthen the strategic focus and implementation of the Bangladesh Climate Fiscal Framework and green bank financing as precursors to the essential adoption of a Green Growth Strategy.

An article in this issue talks about the compilation of System of Environmental -Economic Accounting (SSEA). Contemplating why SEEA compilation has not been attempted effectively as of yet, the article suggests some practical options on how Bangladesh may compile SSEA. 

The rise of the readymade garment (RMG) industry in Bangladesh reflects the triumph of human potential. Bangladesh RMG industry has come of age and is now a global player, highly price competitive as well as quality competitive when it comes to basic garments, knitwear, and cotton products. An article in this issue reflects on the journey of Bangladesh’s RMG sector from infancy to becoming a major player and essential driver of the economy.

The Bangladesh economy has earned praise from analysts across the globe for its export and growth performance and is on a path to winning the war against poverty. It would be a fair assessment to suggest that Bangladesh energetically launched first generation trade reforms in the 1990s and is still reaping the benefits of those reforms But tariff reforms, one critical ingredient of trade policy, still remain largely unfinished with some ossification evident in recent times, as pointed out in an article of this issue of Policy Insights. 

Another article reflects on the shortfall of banking ethics in Bangladesh. A very powerful indicator of this is the resurgence of the incidence of non-performing loans (NPL). The rise in NPLs has happened in both public and private banks, although NPL incidence continues to be mostly concentrated in public banks. The only sustainable way to scale back loan write offs, as suggested in the article, is to stem the tide of bad loan decisions through sharp improvements in banking governance where lending decisions are guided by project quality and not political or business connections.