Khasru calls for urgent deregulation to boost investment, stop graft

Bangladesh is "over-regulated" and will fail to attract serious investment without "serious deregulation," BNP Standing Committee member Amir Khasru Mahmud Chowdhury has warned, urging a complete rethink of the state's role in business.

"Opening a restaurant requires 19 different permissions, and this extensive regulation in all sectors discourages investment. Without serious deregulation, nothing will change," he told a high-level review on the interim government's first year in office. The dialogue, organised by the Centre for Policy Dialogue (CPD) at the Lakeshore Hotel in Gulshan on Sunday, was presided over by CPD Distinguished Fellow Professor Mustafizur Rahman.

CPD Executive Director Fahmida Khatun presented the think tank's scorecard. Labour and Shipping Adviser Brig Gen (Retd) M Sakhawat Hossain attended as chief guest, with Bangladesh Bank Governor Ahsan H Mansur and senior trade leaders present.

Khasru said Bangladesh's low ranking in the ease of doing business index reflected structural inefficiencies. 

"If you genuinely want development, the government's role must be minimised," he argued, calling for self-regulation by trade bodies and online company registration for foreign investors "from the airport upon arrival."

He warned that excessive regulation fuels corruption and benefits an "oligarchy" of a few businesses.

He pressed for governance reforms to "democratise the economy" through transparency, accountability, and elections, alongside skill development, a creative economy, and policies to link marginalised groups to global markets.

"If this change is not possible, a hundred reforms will be of no use," he cautioned.

Governor Mansur assured that Bangladesh has "never defaulted" on foreign payments and will not do so. He acknowledged $2.5 billion in arrears but said commitments were made to clear them swiftly. "Remittances provided tremendous support, exports performed well, and every bank was instructed to meet obligations, whether they belonged to S Alam, Beximco, or anyone else.

Now, every foreign bank has restored Bangladesh's previous status," he said.

He highlighted stabilising the exchange rate as critical to controlling inflation. "We adopted a policy of not selling even a single dollar, and since 14 August last year, we have not sold one," he said. Mansur recalled telling foreign banks to "stop right there" when over 200 had cut credit lines, pledging action only if the situation failed to improve.

Banking reforms outlined by Mansur include capping directorships at six years, appointing independent directors, revising the Money Laundering Act, introducing a Deposit Insurance Act, and empowering the central bank to act against non-performing banks.

He also announced initiatives for agent banking expansion, school banking accounts, start-up funding, affordable housing finance, and lowering mobile internet costs while promoting QR-code payments.

Presenting CPD's review, Fahmida Khatun said inflation control had improved but many challenges persist. "GDP growth has been low due to political instability and unrest. Revenue collection and the tax-to-GDP ratio have decreased.

The concerning issue is the low private sector investment," she said. While exports, reserves, and remittances showed gains, she flagged foreign investment weakness, energy shortages, and unemployment.

Professor Mustafizur Rahman reminded the audience that CPD had set expectations in August 2024 during a period of high inflation, low reserves, and falling investment. "Now we are looking back after one year. There has been progress in several areas. Some have not met expectations. Some have just started," he said, stressing that future governments must turn stability into jobs and investment.

CPD's findings praised agricultural subsidies and renewable energy moves but flagged fragile banking health, limited export diversification, and slow labour policy reform.

It urged the government to sustain macroeconomic stability, inflation control, and social protection ahead of the 2026 polls, warning that without structural reforms, ordinary lives will see no qualitative change.