Openness can help economy move faster

Dhaka,  Mon,  21 August 2017
Published : 22 Mar 2017, 00:03:13

Openness can help economy move faster

Expert tells PRI workshop on fiscal transparency
FE Report

Transparency in the matters of budgetary measures, large project agreements, public procurement and spending, and defence budget is an imperative for good governance and effective public financial management (PFM).

Policy Research Institute (PRI) came up with this suggestion Tuesday at a joint meet with economic reporters, as it noted that information holdback in such matters of high national importance does affect country's international ranking.

Although Bangladesh has improved PFM with a number of initiatives of the Ministry of Finance (MoF) and introduced integrated budget and accounting system (IBAS) to maintain data, it is still in the middle category in terms of disclosure of information, said Dr Ahsan H Mansur, executive director of the PRI.

"In open budget index (OBI), prepared by the International Budget Partnership (IBP), Bangladesh is classified under country category C3, which is the middle category ranging between C1 and C5," Dr Mansur said at a media workshop on 'Fiscal transparency in Bangladesh' organised by PRI and Economic Reporters Forum (ERF) in the PRI conference room in the city.

The C3 category means Bangladesh publishes some budget information, but not enough to ensure an informed public debate. Its OBI score improved from 42 in 2008 to 56 in 2015 (C3 category is a score between 41 and 60).

Dr Mansur said Bangladesh can improve its ranking if it gives some efforts on this.

He presented a keynote paper at the workshop with detailed picture and recommendations on fiscal transparency in Bangladesh. The PRI also submitted the keynote to the ministry of finance, which is about to get down to crafting the next national budget.

According to the latest 2015 Fiscal Transparency Report of the US State Department, Bangladesh did not meet the minimum requirements of fiscal transparency and it did not make significant progress either towards meeting the minimum requirements.

"Information on earnings from state-owned enterprises is included in supplementary budget documents. However information on allocations to state-owned enterprises is not clearly presented and discussed in the budget," Dr Mansur told the meet.

 He thinks Bangladesh can make significant development in Financial Transparency (FT) over the next five to 10 years if it follows code of the International Monetary Fund (IMF).

The four pillars of the IMF code and manual used to determine Bangladesh's fiscal transparency are: clarity of roles and responsibilities defining the fiscal regimes and associated level of fiscal reporting, open budget process, public availability of information and quality of such information and assurance of integrity.

"We need to shift the system from narrow central government to local and then to general government," he said about the dos.

Dr Mansur also pointed out government's asset management as a major problem as it does not have any data on its property.

Further listing the missing factors in financial transparency, the policy researcher said government subsidies to most of the state-owned corporations are not explicitly recorded.

The government does not prepare balance sheet. So, some unfunded liabilities, including defence budget, are not transparent in Bangladesh compared to that of neighbouring India, he said.

Dr Mansur stressed the need for quarterly GDP (gross domestic product) and annual release of some vital statistics including employment and household- expenditure survey.

"The government releases the employment and HIES data every three years, which should be reviewed annually," he added.

He also criticized "politicization" of those basic economic data and suggested following a technology-based accepted methodology to release those.

Dr Mansur also termed the high revenue target as a pressure for tax authority.

"The MoF and the NBR should set the revenue target by sitting together. Setting 35 per cent growth for revenue collection is not feasible as average growth for tax collection has been noticed some 17 to 18 per cent in a year," he said.

There must be impact analysis of budgetary measures, which is absent here, he noted.

"There is also some problem with budget execution process. Budget-management process is not satisfactory although it is under strict control on 5.0 per cent deficit," he added.

Process of passing supplementary budget in parliament is like a stamping as it is done after completion of expenditure, he said, adding that expenditure plan of the government should be approved beforehand.

The government should maintain transparency on signing contracts with foreign companies. All of the Production Sharing Contracts (PSCs) of Petrobangla should be available on the website, he said.

He advocated that the content of large project agreements of the government, including Roopur, Rampal, and Padma Bridge, and projects with China should be made known to the public.

Dr Mansur suggested concerted efforts of the government for medium to long term (five to 10 years) to address the areas. He also recommended removing hurdles to right-to- information regime on the demand side.
Editor : A.H.M Moazzem Hossain
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