Quality research centres a must for sound economic policymaking: economist

Bangladesh must set up superlative research centres to enable informed economic policy decisions, renowned economist and researcher Nurul Islam said yesterday.

The country should set up centres of excellence, where it can undertake special surveys and other critical studies, he said at a conference on the challenges facing economic research in Bangladesh, co-organised by Bangladesh Bank and Bangladesh Economists' Forum at BB Training Academy in Mirpur.

A centre of excellence refers to a team, a shared facility or an entity that provides leadership, evangelisation, best practices, research, support and training for a focus area. 

The government should select few universities or colleges for establishing the centres of excellence and invest heavily on them, he said, adding that it is needed to produce credible and quality statistical data.

“You cannot get quality research unless you invest in resources as making statistics is highly expensive,” said Islam, who has a PhD in economics from Harvard University.

The Bangladesh Institute of Development Studies can be turned into a centre of excellence by investing heavily, said Mohiuddin Alamgir, a former president of the Bangladesh Economic Association.

For example, the planning ministry can form a ten-member team from BIDS and extend high pay packages to do critical research work, he added.   

The government must introduce endowment fund for encouraging young scholars to do more research work, said Md Helal Uddin, associate professor of the economics department at University of Dhaka. 

“There should be a mechanism to induce research,” he said, adding that it is not possible to give higher salaries to university teachers considering Bangladesh's socio-economic context.

“DU is no longer a research university. Rather, it is a teaching university.”

The university has around 1,800 teachers and the government lacks the capacity to pay all of them highly. “Again, even if it did, not all teachers would be willing to conduct researches. Thus, it would be better to create a special endowment fund.”

Islam, who was the first deputy chairman of planning commission of Bangladesh, said the country has serious deficiency in quality research, which impacts policymaking.

He went on to call for multiple studies on the garments, remittance and non-farm sectors due to their higher contribution to the economy.

“Garment study is a black box here,” he said, while calling for studies considering the different aspects of the sector such as the number of factories, categories of workers, cost structure, and its socio-economic contribution.  

Several studies are also needed on the impact of remittance in macro and micro level. “We have to study different aspects of remittance as it is a vital sector to the economy.”

Islam, who has a PhD in economics from Harvard University, stressed on researches on income inequality, default loans and the rice market and its export potential.  

Also a research fellow emeritus of the International Food Policy Research Institute, Islam called upon the government to do multiple studies before announcing of any policy prescription frequently.

Atiur Rahman, governor of Bangladesh Bank, said adequate and reliable database is needed for policy reform initiatives for all public institutions in Bangladesh including the central bank.

Over the recent years, BB has vigorously pursued the strengthening of its in-house capabilities for surveys, research and analysis with new incentive structures including extensive higher training opportunities and higher weightage on publications for career advancement, he said. 

Besides partnering and liaising with local think tanks and universities, BB has also been inducting NRB experts from global organisations and foreign universities to strengthen the analytical underpinnings of the various policy initiatives.

Ex-ante and ex-post stakeholder consultations are now routine procedures in BB's policymaking and implementation, said Rahman.  Planning Minister AHM Mustafa Kamal said the country still has shortage of resources although its economy has developed over the last several decades. 

The government, however, is emphasising on higher investment in research and development, he said, adding that it is spending 0.6 percent of GDP for research and development, with plans to increase it to 1 percent within next three to four years.

He also promised to create a separate fund in the upcoming seventh Five Year Plan that will take effect from July next year.

The planning minister also said there will be incentive packages for corporate houses in the seventh Five Year Plan if they give funds for research and development.

M Syeduzzaman, a former finance minister, called upon the government to collect more tax revenues by plugging loopholes.

The country's tax-GDP ratio is still the lowest amongst the South Asian countries, he said, adding that higher revenues are needed to become self-sufficient.