12:00 AM, June 13, 2014 / LAST MODIFIED: 01:53 AM, March 08, 2015

Finance minister's food for a rethink

Finance minister's food for a rethink

Shah Husain Imam

FINANCE Minister A. M. A. Muhith gives a good copy to newsmen. He fancies unconventional words, creates controversy out of nowhere and takes on big institutions and sometimes heavyweights with copious ease. He is now-hilarious, then-combative sometimes with a fleeting frown in changing mood plays; it's never dull about him, always interesting reflective of a certain zest in his work.
And as they say, 'Only fools don't change their minds', Muhith, being highly intelligent, does change his. Let me cite two instances to carry my point: One, his commitment to present a white paper before the new parliament on shooting-at-the-foot financial scandals in the preceding term of the AL government; and two, his promise to strike out the provision of whitening black money from the NBR regulations at the post-budget press conference.
The 'white paper' is papering over the paralysis of action on the part of the government during the time the plunders had occurred. The scandals made a minced meat of any semblance of financial discipline and trust in an important segment of the financial system. Now a white paper is poised to be issued, that too not immediately but in the middle of next fiscal year! Effectively, a must-do, look-in exercise that should have been undertaken with the findings made public immediately after the spleens were vented out over the scams is set to come out as a stale academic narrative -- seven years too late. Meanwhile, the soft belly may have been distended -- unnoticeably without treatment may only be a balm applied on sore points.
The first tasks of the government were to have stopped the hemorrhage and put a corrective auditing system in place. As these steps went largely by default, no financial transparency and accountability could be bred into the system giving a free hand to collusive grabbing schemes of all types. Thus we hear of the rag-to-riches stories and the collateral rise in financial and other allied crimes.
Finance minister has himself admitted to a lack of inherent capacity to reform the system. That's why his budget speech did not suggest anything about the financial swindles. With this important direction missing in the budget, the impunity culture may be fed on a fresh diet. The onus, however, is not mainly on the budget to put such things right for which strong administrative and political wills will have to be employed top-down.
If one were to say that there is a connection between the failure to bring a satisfactory closure on the scams and the proliferation of black money one would be only stating the obvious.
It is as though Somerset Maugham is being played out through his famous quote, "The only way to make ends meet is to burn a candle at both ends."
Not surprisingly, Muhith's budget speech kept mum over black money. The finance minister himself has given the reason why. Said he, "Taka 34 crore has been whitened in the current fiscal year. From that point of view, there is no black money in the country."
Muhith ascribes land as the biggest source of black money pointing to the huge difference between registered price of land and its real price. In part it's true but the real propeller of black money is its sloshing through the political arena, giving it a de facto recognition.
Here, too, the finance minister has to content himself with a promise to conduct a study to know the extent of black money in the country and how it is generated. That a big parallel economy is operational both in and out of the country as a lost percentage to the national income and GDP growth is a fact of life.
It is time perhaps that we became a part of the international financial monitoring and surveillance system.
Only when Bangladesh turns into a hugely lucrative destination for investments, primed on strong infrastructure and connectivity networks that the lost monies perhaps would be funneled into the country.
Meanwhile, Muhith is happy over the prospect of taxing gold which is surfacing in abundance. Our levy on gold is much less than it is in neighbouring India leaving a margin for upward adjustment to discourage smuggling. A small gift in waiting!

The author is Associate Editor The Daily Star;
E-mail address Husain.Imam@the daily star


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