Economists suggest the government show "zero tolerance" on capital flight as one of key remedies to tackle the ongoing macroeconomic disequilibrium in Bangladesh, as they see looming challenges.
They urged the government at a meeting on Sunday to inquire as to whether the unethical practice of over-invoicing and under-invoicing have been taking place in disguise of exports and imports.
They also suggest raising export retention, exploring the regional export markets, and conducting reforms especially in the taxation system.
The economists were speaking at a programme styled 'The recent economic challenges: how risky it is' organised by the Centre for Policy Dialogue (CPD) at its city office.
In introductory remarks, CPD executive director Dr Fahmida Khatoon said Bangladesh is in a "medium-term crisis". And the current measures taken by the government are inadequate.
"So, measures should be both short-and medium-term in nature," said executive director of the CPD.
Ms Khatoon said that the current crisis is not short-term but medium-term. If this trend continues, the country will plunge into a "long-term crisis".
Speaking at the programme, former caretaker government adviser Dr AB Mirza Azizul Islam said there are many challenges that have surfaced on the country's macroeconomic front of late.
Such a picture, he says, is evident in the country's financial sector. Private-sector investment has been squeezing, leading to poor employment and tax-GDP ratio.
He feels that Bangladesh would face a number of challenges in its shipments to Europe after graduation from the least-developed-country status.
"To get GSP-plus benefit, labour rights and allowing EPZ trade union are a must," Dr Islam says about the way out.
He notes that incentivising of 2.5 per cent on the remittances is not working so Bangladesh should now explore new markets to raise the remittances.
The economist put a question on a spurt in imports in recent months. "Are the imports genuine or involve over-invoicing?"
Speaking at the function, CPD distinguished fellow Dr Mustafizur Rahman said the depreciation of the local currency against the dollar casts an adverse impact on the economy. "This should be made gradually."
"We've been asking for long [the policymakers and the central bank] to depreciate the local currency gradually," he adds.
"The 10-per cent depreciation in a short span of time has many implications on the economy," Dr Rahman notes.
He said most capital flights take place from Bangladesh through under-invoicing and over-invoicing in external trade.
He mentioned that over the past decade more than $60 billion in capital flights took place in the country.
The CPD fellow pointed out that Bangladesh experienced over $33 billion equivalent of trade deficit and more than 20 billion current-account deficits in the past fiscal year to June 30.
He terms Bangladesh's external trade peculiar in a sense that here export is value-driven while import is price-driven. "This is not healthy for an economy."
Dr Rahman, however, said Bangladesh's net export in the last fiscal year was merely $28 billion. "We should consider the net export instead of gross 35 billion."
Dr Hussain Zillur Rahman, executive chairman at the Power and Participation Research Center, told the meet that there is an "economic injustice" that has surfaced in the economy.
"I see three aspects of the injustices-they are the creation of new poor, reversal risk in the SDG goals, and housing reversal."
He said his latest survey found that around 30 million have emerged as new poor while may go back to nutrition and education which are key targets of the SDGs.
At least 10 per cent of people have migrated to urban areas which he called a housing reversal.
Research director of CPD Dr Khondaker Golam Moazzem was the moderator.
jasimharoon@yahoo.com