Political economy of the size of government: What shakes and what shapes


Jamaluddin Ahmed

(Continued from last day's section, last part)

A number of analysts and observers with whom this Jasim (2014) talked to, noted that the number of ministries in Bangladesh “is already large” in Bangladesh, compared to the situation in many other countries like Thailand, Malaysia, the Philippines, Sri Lanka, South Korea, Japan, the UK and many more.  

“What counts most in this contest is the quality of output, not more functioning of a ministry”, one of them observed. When this correspondent drew his attention to the claim by some quarters that the cost of running the government in Bangladesh is not far out of line with other comparator countries in fiscal terms, he observed that this factor must not be taken “as a source of any comfort” in the Bangladesh context where recurring expenditures on account of pay and allowances as well as retirement and pension benefits for serving and retired public officials increased by about 120% in last two decades and a half alone. 

The number of employees under government revenue budget has increased by 83 per cent to 1.26 million over the last three decades since the early 1980s, leaving aside the first post-Independence period.  

This growth, according to most of analysts and experts with whom this correspondent talked to, is rather disproportionate to the public services that the administration delivers.   

And this overstaffing eats up a significant chunk of government revenues coming from taxpayers’ money without yielding the expected quantitative and qualitative outcome, they said. Government expenditure in the last fiscal also increased to Tk 248.67 billion--up nearly 69 times over the 1983 mark. 

In FY 2014, the number of approved posts for the ministry of home affairs was 281,122, against which and some postings were made for 258,451. The ministry of primary and mass education has approved posts for 215,072. Some 189,544 have been posted. In FY 1983, the ministry of education was the biggest ministry in terms of manpower followed by the ministry of home affairs.

The ministry of primary and mass education was then part of the ministry of education. The ministry of education had 185,587 posts in FY 1983 while the that of home affairs had 118,974.

Meanwhile, the departments and directorates also rose, in to 275 in number in FY 2014 from 181 in FY 1983. Experts like economists and former bureaucrats are of the view that the fiscal space is shrinking as a result of a substantial growth of expenditure in the ‘non-development’ areas. Fiscal space, they said, will shrink further after implementation of the next new national pay scale. It is set to be announced next month. 

We are managing a central bank with nearly 90 general managers in comparison South Korean central bank is running  with 6 general managers in a most efficient manner. In Bangladesh, now nearly 500 bureaucrats do not have position in their cadre service; many are sitting at State Owned Enterprises doing nothing. Contractual employment in the Government is de-motivating eligible down level promotion seekers.    

Shape Bangladesh on the Spirit of Liberation War:

Expert commission need to set up for manpower planning and crafting organization for the size of Cabinet for Bangladesh to Structure of Government the Shape Bangladesh on the Spirit of Liberation War. 

The Meritocracy should get priority both in politics and bureaucracy. All managers in politics and bureaucracy must meet the literacy criteria. Current system of Five Year Plan is not functioning.

To make the planning and budget document effective, Bangladesh should formulate long term business plan considering all variables by setting national goal with a provision of revision every two years. 

Budget should be considered as integral part Five Year Plan which has not been practiced. The Planning and budget process should comply the requirements of constitutional provisions [7 (1); 7 (2)]. The Five year Plan and Annual Budget should emphasis higher allocation to the development expenditure (70%) and less (30%) to the revenue expenditure.

In the revenue model direct collection need be higher ratio (55%) than indirect tax (45%). Generation of Black money within the economy tend to increase if indirect tax collection is not collected.. Application of ICT is essential to collect the desired level of revenue collection. All government officials must be ICT literate, if any one left must be given time line to recover his/her ICT weakness.

City Corporation and municipality revenue management requires automation to meet growing demand of urbanization within the country. 

Education, Primary and secondary Health Care, Electricity, Road Infrastructure, Railway, Sea Port and River Ways and Information Technology investment will bring long-term benefit.  The 7th Five Year Business Plan document should emphasis highest and largest investment to Build Bangladesh as middle income country by 2021. 

(Concluded)


Jamaluddin Ahmed is General Secretary, Bangladesh Economic Association and Chairman, Janata Bank