You are about to present your budget in your current term. Next year, you can or can't present your budget because a general election is due in December 2008. So, you will undoubtedly be under great pressure from friends and colleagues in the caretaker government backed by the armed forces to make this year's exercise an election budget, full of populist give-aways.
Please resist such pressures. Next budgets make hardly any difference to the existence of the caretaker governmnet,its credibility and future of the caretaker government's approach acceptable to the nation and donors. That is more true than ever right now, since the general election is a good 9 months off, and voters have notoriously short memories.
Every Finance Minister/Adviser, is urged to produce a budget in the final year of his government's term. Yet, this does not work - in practise, voters vote out four-fifth of all incumbent governments. Announcing a tax cut or a new spending programme seems to make no difference to voters. Preparing a populist budget and expecting caretaker government's credible dividends is an exercise based on hope over experience.
Remember the experience of the last BNP Finance Minister, Mr.Saifur Rahman. In 2006, he sought to present an election budget 4 months before the 2007 election. He slashed import duties, and abolished excise duty on many items consumed by the general masses, ranging from umbrellas and kerosene lamps to toys and kitchenware. He cut the excise duty from different percentages for items consumed by the new rich class - cars, air conditioners, soft drinks. He abolished the surcharge on income tax, and increased the standard deduction for salaried folk.
But Mr. Saifur Rahman knew that voters in the 2007 election would not remember his 2006 budget measures. So, he hit on a masterly strategy. In July 2006, shortly before the general election was formally notified by the Election Commission and before the vote on account was due, he came out with a series of tax cuts and new spending programmes. He took advantage of the fact that the law permitted a wide range of tax changes between budget presentations. And so he produced what was, for practicable electoral purposes, a virtual full budget.
In this virtual budget, he announced indirect tax cuts that gave away an estimated Taka 22,000 crore of goodies to consumers. He made healthcare more affordable by cutting the customs duty on lifesaving bulk drugs and medical equipment and exempting them from the countervailing duty. He halved the excise duty on computers.Moreover, to cover every conceivable vote bank, he announced the creation of two new funds, one for different
But did it win any votes? The BNP and its allies were thrashed soundly. Much has been written about the failure of the BNP's Bangladesh Emerging Tiger election campaign. We need also to remember the failure of Mr. Rahman's several election budgets.These proved conclusively that voters are not impressed by tax cuts or promises of grand new programmes. They are interested in improvements in the quality of their lives. And that is something far beyond the scope of a mere budget.
I am sure, Mr Finance Adviser, that the logic of this is clear to you. Instead of trying to gain a reputation as a successful populist, you should aim to go down in history as a strong, sensible Finance and Planning Adviser. However, given neutral realities, you will not be able to ignore totally the political demands from your government as well as political parties active during the EPR. You cannot say that you will do nothing populist because it is counterproductive. That would be politically incorrect.
So, tell your colleagues that populism 9 months before an election will be completely forgotten. Far better to present a sober, prudent budget this time, and postpone populism until a virtual budget close to the 2008 election. Then, in January 2009, incumbent government can come out with any number of tax cuts and populist programmes in a virtual budget.
You know that this will make virtually no difference to the election outcome. But it will satisfy the nation that you have tried your best. Meanwhile, you can focus on long-term tax issues, thus ensuring yourself a place in the history books as a Finance Adviser who really progressive Bangladesh.
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Sign the Petition : Release the Arrested University Teachers Immediately : An Appeal to the Caretaker Government of Bangladesh
http://www.mukto-mona.com/human_rights/university_teachers_arrest.htm
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Daily Star publishes an interview with Mukto-Mona
http://www.mukto-mona.com/news/daily_star/daily_star_MM.pdf
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MM site is blocked in Islamic countries such as UAE. Members of those theocratic states, kindly use any proxy (such as http://proxy.org/) to access mukto-mona.
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Mukto-Mona Celebrates 5th Anniversary
http://www.mukto-mona.com/Special_Event_/5_yrs_anniv/index.htm
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Mukto-Mona Celebrates Earth Day:
http://www.mukto-mona.com/Special_Event_/Earth_day2006/index.htm
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Kansat Uprising : A Special Page from Mukto-Mona
http://www.mukto-mona.com/human_rights/kansat2006/members/
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MM Project : Grand assembly of local freedom fighters at Raumari
http://www.mukto-mona.com/project/Roumari/freedom_fighters_union300306.htm
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German Bangla Radio Interviews Mukto-Mona Members:
http://www.mukto-mona.com/Special_Event_/Darwin_day/german_radio/
Mukto-Mona Celebrates Darwin Day:
http://www.mukto-mona.com/Special_Event_/Darwin_day/index.htm
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Some FAQ's about Mukto-Mona:
http://www.mukto-mona.com/new_site/mukto-mona/faq_mm.htm
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VISIT MUKTO-MONA WEB-SITE : http://www.mukto-mona.com/
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"I disapprove of what you say, but I will defend to the death your right to say it".
-Beatrice Hall [pseudonym: S.G. Tallentyre], 190
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