"Former state minister Shamsul Alam suggests avoiding big projects for two years"

 Former Minister of State for Planning, Shamsul Alam, recently advised against initiating any large-scale projects for the next two years. This recommendation comes amidst his broader suggestions aimed at mitigating the current economic instability. Among his proposals are the rationalization of tax exemptions, maintaining the budget deficit at 5 percent of GDP, reducing the average duty-tax rate to 20 percent, expanding social protection programs, and bolstering market oversight. Alam voiced these recommendations during a roundtable discussion titled 'Economy: Challenges of the New Government,' organized by Prothom Alo last Saturday. Having served as a Minister of State in the previous administration, Alam shared his insights at the event held at Prothom Alo's Karwan Bazar office, which drew participation from economists and business leaders. Addressing the prevailing economic uncertainties, Alam remarked, "We're witnessing instability across the economy, evident in foreign exchange reserves and inflation. While our macroeconomic indicators remained steady for a considerable period, recent events such as the Russia-Ukraine conflict and the Red Sea crisis have exacerbated the situation." He noted that the current government's manifesto prioritizes various issues, with inflation control being paramount. However, he expressed skepticism about achieving the targeted inflation reduction by next June. Alam highlighted the factors contributing to inflation, citing exogenous causes such as the US Federal Reserve's interest rate hikes and subsequent dollar appreciation. He emphasized that inflation cannot be solely addressed through interest rate adjustments, advocating for a nuanced approach considering the intricacies of production costs and import-export dynamics. On monetary policy, Alam cautioned against fully market-driven exchange rates, citing the imbalance between imports and exports. He suggested maintaining the current policy stance for the time being to prevent abrupt economic shocks. Furthermore, Alam stressed the need to ease strict import controls to facilitate production while also advocating for relaxed regulations to encourage capital inflows. He criticized stringent reporting requirements for financial transactions, arguing that such measures hinder capital influx and exacerbate currency depreciation. Regarding revenue collection, Alam proposed reducing taxes to alleviate inflationary pressures and stimulate economic growth. He emphasized the importance of diversifying revenue sources and transitioning towards direct taxation to foster sustainable development. Alam also highlighted the importance of market intervention to address imbalances and underscored the indispensable role of democracy in ensuring economic stability. In summary, Shamsul Alam's recommendations underscore the complex interplay of economic factors and the need for a comprehensive strategy to navigate current challenges and foster long-term stability.