Bangladesh Bank Governor Ahsan H Mansur has warned that despite improvements in the financial sector, ongoing instability in the political and security environment is deterring both domestic and foreign investment.
Speaking at a dialogue titled ‘365 Days of the Interim Government’, organised by the Centre for Policy Dialogue (CPD) at a hotel in Gulshan on Sunday, August 10, Mansur stressed that economic recovery cannot be sustained without broader stability.
“If only the financial sector is stable, but the political situation and law and order remain uncertain, investment will not return,” he said.
“We must be realistic. While there are positive signs in the investment pipeline, meaningful inflows will take time. With national elections on the horizon, big investors, especially foreign ones, are holding back. They want to see what the next government will do. It’s natural for them to say: ‘Let’s wait and talk to the next administration.’ That’s the reality.”
He noted that the country is currently importing $5 billion every six weeks, yet asked whether import levels have truly decreased or if there are visible shortages in the market.
“Perhaps you’ll say we’re not importing capital machinery, that’s a fair point,” he acknowledged. “But then I ask: who will invest in this environment? Without confidence in stability and policy continuity, no one will commit.”
Mansur painted a sobering picture of the economy’s recent past. “We were on the edge of the abyss. If we hadn’t acted swiftly, the risk of falling in would have been very high.”
He outlined two primary objectives of the current administration: macroeconomic stabilisation and advancing structural reforms so that any future government can build on a stronger foundation.
“Strengthening the financial sector isn’t something that can be done in one or two years. It’s a continuous process. Our hope is to set that process in motion,” he said.
Mustafizur Rahman, Honorary Fellow at CPD, recalled that just a week after the interim government took office on August 8, 2023, CPD held its first discussion on the challenges ahead.
“At that time, the economy was in a perilous state,” he said. “Foreign exchange reserves were plummeting, the taka was depreciating rapidly, inflation and unemployment were rising, and export growth was declining. The interim government came to power amid a massive student-led uprising. Now, a year later, it’s time to reflect and evaluate.”
Mustafizur acknowledged progress in stabilising the banking sector and the announcement of a preliminary election schedule, but cautioned against complacency.
“Despite criticism or debate, political actors will ultimately carry forward our collective aspirations,” he said. “But structural reforms must not be delayed.”
Dr Fahmida Khatun, Executive Director of CPD, presented the main paper at the event, highlighting a lack of progress on key reform recommendations.
“The task force formed to redefine Bangladesh’s economic strategy for inclusive and sustainable development has made valuable recommendations. Yet, we see little implementation,” she said. “There has been no visible advancement on reforms in the labour sector, media, women’s rights, or health. And notably, no commission was even formed for education.”
Showkat Aziz Russell, President of the Bangladesh Textile Mills Association (BTMA), delivered a sharp critique of the interim government’s policies toward the textile and garment sector – the backbone of the economy.
“The governor mentioned that the garment sector helped save the economy during the crisis,” Russell said. “But I ask: what has been done for us in the past 365 days?”
He pointed to several policy setbacks, including a sharp increase in corporate tax in the textile sector from 15% to 37%, the imposition of a 2% duty on raw cotton despite duty-free access for finished products, persistent shortages of gas and electricity, and a complete halt in new factory construction –highlighting that out of 1,850 factories in his sector, not a single new one had been built in the past year, and in fact, some had already shut down.
“This is not magic,” he said. “This is stagnation. I offer this as constructive criticism, not an attack.”
Showkat also questioned the government’s approach to banks involved in financial scandals.
“Why are we bailing out banks that were looted? Compensate the customers, close the bank, and expand branches of sound financial institutions. That would protect jobs and restore trust. But instead, we’re rewarding the owners of failed banks.”
He expressed disbelief at the proliferation of banks in a small country: “Nowhere else are banking licenses handed out like family inheritances. In Bangladesh, it seems only those who can hit a six in cricket get a license.”
Meanwhile, BNP Standing Committee Member Amir Khasru Mahmud Chowdhury said that the primary responsibility of the interim government is to return ownership of the state to the people.
“Some progress has been made in restoring economic stability,” he acknowledged. “Money laundering has been curbed, and many of those involved have fled the country. As a result, remittances and exports have increased.”
However, he stressed the need for a break from the past. “We should not carry forward the budgetary framework of the dictatorship. Instead, we could have introduced a new budget—one that prioritises social welfare and excludes the regressive policies of the past.”
Labour leader Razequzzaman Ratan criticised the current political narrative, saying, “In the past, if you criticised the previous government, you were branded anti-liberation. Now, anyone who speaks out is labelled an ally of fascism. You’re only interested in finding political allies—why are you hiding your brother-in-law? How can you expect different results by governing in exactly the same way?”
He called for a national discussion on the deep-rooted impact of extortion on Bangladesh’s economy, politics, and culture.
“It’s estimated that Tk 1,80,000 crore is extorted annually,” he said. “We need to ask: how does this affect our political system and the lives of ordinary people? This conversation must happen.”