Bangladesh experienced an average of $16 billion in annual illicit financial outflows during former Prime Minister Sheikh Hasina’s administration, according to the final draft of a White Paper on the State of the Economy, submitted on Sunday to Chief Adviser Prof. Dr. Muhammad Yunus.
The White Paper, prepared by a 12-member committee led by economist Dr. Debapriya Bhattacharya, covers the period between 2009 and 2023. The document highlights that the amount laundered annually was more than double the combined value of foreign aid and foreign direct investment (FDI) inflows.
Dr. Bhattacharya stated that the findings reveal deeper systemic corruption than anticipated. “The report demonstrates how crony capitalism fostered oligarchs who shaped policies to serve their interests,” he remarked during the report submission.
Sectoral Corruption and Revenue Leakages
The banking sector emerged as the most corrupt, followed by physical infrastructure, energy, power, and ICT. The report identified significant revenue losses due to systemic tax evasion, misuse of tax exemptions, and poor public finance management.
Tax exemptions for influential groups during the past regime amounted to 6% of the GDP annually. The report noted that even halving this amount could have doubled education funding and tripled health allocations, representing missed opportunities for critical development.
Banking and Development Mismanagement
The White Paper highlights widespread corruption in the banking sector, including fraudulent loans, misappropriation, and forced bank takeovers using state influence. It also uncovered substantial corruption in the Annual Development Programme (ADP), with resources squandered on politically motivated, unfeasible projects, inflated costs, and delayed timelines.
The report finds systematic cost overestimation and artificially enhanced project costs after approval to siphon funds.
Besides, cronyism and favouritism dominated project procurement, excluding qualified bidders, while resources were wasted due to weak feasibility studies, prolonging timelines and inflating costs.
Prof. Mustafizur Rahman, a committee member, revealed that a review of seven out of 29 large ADP projects showed project costs inflated by 70%, rising from an initial estimate of Tk1,14,000 crore to Tk1,95,000 crore.
The estimated initial cost of the seven projects examined was Tk1,14,000 crore which was later revised upward to Tk1,95,000 crore by adding many components, showing an inflated land price, and purchase manipulation.
The project costs were raised almost 70 percent without analysing the cost benefit, he said. He also suggested brining the people responsible for money laundering to special prosecution.
AK Enamul Haque, committee member, added that in the last 15 years over Tk7,00,000 crore was spent on ADP and 40 percent of the money was plundered by bureaucrats.
Power Sector Irregularities
The report identified inefficiencies and corruption in the energy sector, noting that excess capacity payments to power plants amounted to Tk36,000 crore. Between 2010-2024, capacity and rental payments to private power plants totaled Tk115,000 crore, while plant utilization rates remained inefficient at 42%-46% over the past five years.
“This is an indication of a very inefficient system,” the paper said, adding, “A 65 percent plant factor is achievable by minimising maintenance, reducing standby capacity and full supply of fuel.
M Tamim, another committee member, estimated that of the $30 billion invested in power generation, at least $3 billion were lost to kickbacks.
While receiving the report, Chief Adviser Prof. Yunus, as quoted by the Chief Adviser’s Press Wing, said, “This White Paper is a historic document that reveals the economic devastation caused by the previous regime,”
He expressed outrage at the scale of plunder, stating, “The economy was looted openly, and we failed to confront it effectively.”
