Fuel sector received $4.12 billion in subsidies in eight months, finance adviser Titoomir says

Subsidies of 4.12 billion US dollars have been given to the fuel sector in the past eight months, Prime Minister's finance and planning adviser Rashed Al Mahmud Titoomir has said. The figure itself brings into view a large part of the pressure currently on the country's economy.

He made the remarks at a programme to launch an ESG dashboard organised by the garment manufacturers' body BGMEA on Monday afternoon. Speaking at the event, the finance adviser set out the government's economic plans, the poverty situation and the challenges ahead.

Titoomir said that, for lack of effective steps by the past government, nearly eight million people have fallen below the poverty line. The government hopes this number will fall by 5 percent through the family card, he said.

On social protection programmes, he further said it will be possible to eliminate 60 percent of poverty through initiatives such as the government's family card. In other words, the government sees social protection as one of the main tools for reducing poverty.

The finance adviser said a strong possibility has been created for Bangladesh to finally graduate from the list of least developed countries and become a developing country in 2029. But he also commented that the previous government had taken no initiative to prepare for this graduation.

For this reason, three years have been kept for preparation, the adviser said. The government wants to use this preparation time for the changes that will come in trade and the economy after LDC graduation.

Setting out the government's economic plan, Rashed Al Mahmud Titoomir said the government is working to build a capable and healthy Bangladesh by increasing investment in the production sector to create employment, increasing internal resources without raising taxes, and increasing spending in the education and health sectors.

Comparing the current economic situation with the crisis of 1975, he said the country is still having to pass through an economic crisis like that time. Through this comparison, he sought to convey the depth of the crisis.

The finance adviser mentioned that there are three big challenges before the government. They are the fragile economy inherited from before, the pressure of inflation, and the employment crisis.

On employment, in his words, the July charter has come, but educated people are not getting employment. In other words, he highlighted the reality that the job market crisis has not eased even after political change.

The account of 4.12 billion dollars in fuel subsidies in eight months is important, because this huge expenditure directly creates pressure on the government's budget. At the same time, as this subsidy has to be given to hold down fuel prices, the government's finance managers face a difficult question of balance.

The finance adviser's remarks at an industry-related event such as the launch of BGMEA's ESG dashboard also carry a message for the business community. As the government has called investment in the production sector and job creation priorities, entrepreneurs in export-oriented industry will be watching the implementation of that plan.

All together, the finance adviser's speech contains, on the one hand, an acknowledgement of a fragile economy, inflation and an employment crisis, and, on the other, talk of the family card, preparation for LDC graduation, and plans to increase spending on education and health.

What remains to be seen is how far the government can implement its announced plans while handling this pressure of fuel subsidies, and how far the assurances given on poverty and employment are reflected on the ground.