Robust, efficient financial management a must to ensure economic stability

State Minister for Finance says at the launch of PFM system

Published : 19 May 2024 10:20 PM

In order to ensure Bangladesh's economic stability and promote sustainable growth, State Minister for Finance Waseqa Ayesha Khan on Sunday called for policy planners, academics and development partners to assist in creating a robust and efficient financial management system for Bangladesh.

While launching the process for creating the Public Financial Management Strategy (PFM) for 2025-2030 in Dhaka today, she said that “PFM Strategy comes at a critical juncture for Bangladesh, as we navigate through unprecedented challenges and opportunities in the global economic landscape.”

She said adding, “As we confront the far-reaching impacts of the COVID-19 pandemic, it has become increasingly clear that resilient and effective financial management systems are essential for safeguarding our nation's economic stability and fostering sustainable development”.

The State Minister said, “As we embark on this journey towards formulating the PFM strategy, let us remain steadfast in our commitment to excellence, innovation and collaboration. Together, we have opportunity to shape a future where Bangladesh’s financial management systems are not only resilient and efficient but also equitable and inclusive, laying the foundation for sustained prosperity for generation to come.”

The inaugural discussion was organized by the Finance Division, Ministry of Finance with support from the World Bank, European Union and Global Affairs Canada. Presided over by Dr. Md. Khairuzzaman Mozumder, Secretary, Finance Division, the meeting was attended by Barnard Haven, Acting Country Director for Bangladesh and Bhutan, the World Bank as Special Guest.

Shirajun Noor Chowdhury, Additional Secretary, Finance Division made welcome address. Dr. Michal Krejan, Head of Cooperation (HoC), European Union Delegation to Bangladesh, Joe Goodings, Head of Corporate/Development Assistance, High Commission of Canada and Sylvia Islam, Senior Development Advisor, Global Affairs Canada also addressed the inaugural discussion.

Abu Daiyan Mohammad Ahsanullah, Joint Secretary, Finance Division made a presentation on Pathway to PFM Reform Strategy 2025-2030. Dr. Md. Khairuzzaman in his speech said enhancing PFM has remained a fundamental aspect of reforms aimed at fostering effective macroeconomic management and promoting good governance.

Effective PFM is an essential tool that ties together available resources, delivery of services and achievement of government policy objective.

 He however, mentioned that although significant improvement has already been done in PFM reform area in Bangladesh, more coordinated efforts are required from all stakeholders for maximizing the benefits from it.

Barnard Haven in his speech said Bangladesh has made remarkable progress on Public Financial management leveraging new technologies, adding, “I have seen incredible progress on systems like the integrated budget and accounting system, e-procurement and automated payments.”

 Heven said, “We hope that this collaborative approach will foster an integrated approach to the next generation PFM reforms in Bangladesh that voids fragmentation. It will align with national development objectives and the Smart Bangladesh Agenda, as Bangladesh prepares to reach its upper middle-income objective”,

Inaugural session was followed by two technical sessions. The 1st session- “Reflection from the Government Key Stakeholders” was addressed by Rehana Parven Member (Secretary) Planning Commission, Md. Masud Sadiq, Member (Customs, Policy and ICT), National Board of Revenue and Md. Mofidur Rahman, Additional Secretary, Finance Division.

This session was moderated by Md. Adbur Rahman Khan, Additional Secretary Finance Division. The second session was moderated by Suraiya Zannath, Lead Governance Specialist, Financial Management, the World Bank named “Voices from other Key Stakeholders”.

It was addressed by Mohammad Muslim Chowdhury, former Comptroller and Auditor General, Ramendra Nath Biswas, Director General, Institute of Public Finance and Dr. Monzur Hossain, Research Director, Bangladesh Institute of Development Studies. Mohammas Saiful Islam, Additional Secretary, Finance Division and National Program Director, Strengthening Public Financial Management Program to Enable Service Delivery (SPFMS) made the closing remarks.

The Government of Bangladesh recognizes the critical importance of strengthening its PFM system to effectively manage public resources, foster transparency, ensure accountability, and promote sustainable development.

 Effective PFM systems drive strong institutions, economic stability, resource efficiency, and public service excellence.

Over the past four decades, Bangladesh made significant strides in reforming its PFM system, starting with creation of Committee on Reforms in Budget and Expenditure Control (CORBEC) in 1989 followed by several reform initiatives including Reforms in Budgeting and Expenditure Control (RIBEC) Project, Financial Management Reform Project (FMRP), Strengthening Public Expenditure Management Program (SPEMP),

Public Expenditure Management Strengthening Program (PEMSP), Strengthening Public Financial Management Program to Enable Service Delivery (SPFMS).

Earlier, two robust PFM Reform Strategies were formulated for 2007-12 and 2016-21 to take forward the ongoing agenda of reforms and establish broader ownership of the reform process by government.

Bangladesh now seeks to transform its PFM system into a technology-driven, enhanced performance orientation and efficient public expenditure management system to support improved service delivery and sustainable development.

The PFM Reform Strategy 2025-2030 aims to address gaps and outstanding issues of previous PFM reform initiatives; cover broader political mandates- Smart economy, Smart citizens etc. in alignment with PFM functionalities.