Issue 22

October 2024

The overarching theme of the articles in this issue of Policy Insights revolves around the need for comprehensive reforms in Bangladesh, spanning political, economic, educational, and governance areas. The fall of the previous regime, driven by economic mismanagement and youth-led movements, has ignited hopes for democratic revival under the interim government led by Dr. Muhammad Yunus. Core challenges such as inflation control, banking sector reforms, and trade policy stagnation are highlighted, with recommendations for tariff reductions and export diversification. Additionally, Bangladesh’s tertiary education system is identified as an area that requires improvement to align with job market demands and foster innovation. The articles also stress the importance of reducing inequality through progressive taxation and improving governance structures to ensure transparency and fairness. Overall, the focus is on leveraging this pivotal moment to solidify long-term stability and economic resilience.

The lead article of this issue delves into the political and economic gains following the 2024 insurrection in Bangladesh and reflects on how that would help restore democratic governance. The article draws inferences from the liberation war of 1971 and emphasizes the need for continued reforms to address cronyism, corruption, and economic mismanagement. The author strongly advocates for deepening reforms to secure the benefits of this ‘second liberation.’

Similarly, Article 2 highlights the collapse of the previous regime after 15 years, toppled by a historic youth-led movement in Bangladesh. The regime’s downfall stemmed from economic mismanagement, rising inflation, and cronyism. The article emphasizes the need for inflation control, banking reforms, and foreign exchange management to restore stability.

Article 3 emphasizes the importance of reforming Bangladesh’s governance structures in the aftermath of the fall of the former regime. The article underscores the need for social, political, and economic governance reforms to ensure a fairer, and more transparent system of governance. These changes are essential for sustaining Bangladesh’s democratic revival.

Article 4 analyses global economic volatility, noting that income disparities, inflation, and macroeconomic instability are rising. The article urges developing countries like Bangladesh to adopt proactive policies aligned with global economic trends to safeguard stability.

Article 5 explores how progressive tax systems can reduce inequality. The article argues that despite economic growth, income disparity persists in Bangladesh, exacerbated by indirect taxes. Recommendations include enhancing direct taxes, expanding property taxes, and improving tax administration to foster inclusive growth.

Article 6 addresses the shortcomings in Bangladesh’s tertiary education system, such as low enrolment, poor quality, and a disconnect between education and job market needs. The article outlines reforms aimed at improving quality, boosting STEM enrolment, enhancing research, and fostering international collaborations. These changes are critical for supporting Bangladesh’s transition toward a knowledge-based economy.

Article 7 calls for urgent trade policy reforms under the interim government. The article critiques the stagnation of reforms and protectionist policies that have stifled export diversification. Key recommendations include reducing tariffs and leveraging exchange rate depreciation to boost non-RMG exports, positioning Bangladesh for global economic integration.

Finally, Article 8 illuminates Bangladesh’s growing integration into Global Value Chains (GVCs) through agricultural inputs. While the country has made strides in backward participation, forward participation lags. The authors recommend infrastructure improvements, streamlined tariff structures, and adherence to international standards to strengthen Bangladesh’s agricultural sector within GVCs.