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Home » Only 36% of Bangladesh’s budget is transparent

Only 36% of Bangladesh’s budget is transparent

by Bhaskor Maity
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Budgetary transparency involves full disclosure of all relevant fiscal information in a timely and systematic manner.

The citizens have a right to know what spending and tax policies the budget proposes, have a voice in budget decisions, and be able to hold the government accountable for managing public money.

Budgetary transparency involves full disclosure of all relevant fiscal information in a timely and systematic manner.

Washington-based International Budget Partnership (IBP) prepared the Open Budget Index (OBI), based on Open Budget Survey (OBS) on the countries’ budget transparency, public participation, and budget oversight situation.

IBP has been striving to promote transparency and oversight of government spending and conducting the OBS since 2006 with a view to know the comparative and independent assessment of fiscal transparency, oversight, and participation at the national level.

The survey is conducted by independent researchers typically based in each of the countries surveyed.

The researcher determines the answers to 140 factual questions, and anonymous experts review the outcomes.

Governments in all surveyed countries are also invited to review and comment on the results, and many are doing so.

The OBS uses criteria developed by the International Monetary Fund (IMF) in its Code of Good Practices on Fiscal Transparency, the Organization for Economic Cooperation and Development (OECD) in its Best Practices for Budget Transparency, and International Organization of Supreme Audit Institutions in its Lima Declaration of Guidelines on Auditing Precepts.

The survey examines the current state of transparency of the budget and how it has changed over time; the degree to which opportunities for public participation in the budget process are present; and the strength of the two formal oversight institutions, the legislature, and the supreme audit institution.

It has reviewed whether the information is opened up to the citizens through (1) pre-budget statement, (2) executive’s budget proposal, (3) enacted budget, (4) citizens budget, (5) in-year reports, (6) mid-year review, (7) year-end report and (8) audit report, etc.

Bangladesh’s score

In the OBI 2019, Bangladesh’s score was 36 which was 41 in 2017 and 56 in 2015.

Hence, Bangladesh’s budget is gradually becoming non-transparent.

It has been ranked below in OBI 2019 then all the South Asian countries such as Afghanistan (50), India (49), Nepal (41), Pakistan (44), and Sri Lanka (47).

Afghanistan topped the position in the region with scoring 50 in the transparency score in the survey.

In the OBS, the OBI categorizes countries into five major heads in terms of the availability of information – “extensive” with a score between 81 and 100, “substantial” with a score between 61 and 80, “limited” with a score between 41 and 60, “minimal” with a score between 21 and 40, and “scant” with score 0 and 20.

According to the 2019 OBI, Bangladesh’s score was even lower than the global average of 42.

Bangladesh ranked in 79th position out of 117 countries that year.

The country’s transparency score has been declining over the period since 2012 when the score was 58 and then it declined to 56 in 2015 and further declined to 41 in 2017 and 36 in 2019.

The OPS for 2021 is yet to be published.

Issues and remedies

Experts have opinion that Bangladesh’s performance dropped mainly due to delay in publication and not publication of budget-related documents.

The Finance Ministry in many cases publishes the documents and fiscal reports making several months delay.

Even mid-year review, year-end report, and audit report were not published on time.

Bangladesh may give priority to some of the actions to improve budget transparency.

The authority may take initiative to publish the pre-budget statement, in-year reports, and the mid-year reviews online in a timely manner.

All in-year reports and the mid-year review should be produced and published online within three months after the end of the reporting period.

Importance should be given to prepare and publish the year-end report and audit report in a timely manner.

The year-end report should be uploaded on the websites as soon as it is prepared.

The audit report should be produced and published online within 18 months after the end of the reporting period.

The executive budget proposal may include information on fiscal risks, such as expenditure arrears, extra-budgetary funds, and contingent liabilities.

The details on expenditures and revenues in the enacted budget and seeking public input on the content of the Citizens Budget may include.

Transparency alone is insufficient for improving governance.

The OBS also assesses the formal opportunities offered to the public for meaningful participation in the different stages of the budget process.

It examines the practices of the central government’s executive, the legislature, and the supreme audit institution (SAI) using 18 equally weighted indicators, aligned with the Global Initiative for Fiscal Transparency’s Principles of Public Participation in Fiscal Policies, and scores each country on a scale from 0 to 100.

The Parliament and supreme audit institution in Bangladesh, together, provide weak oversight during the budget process, with a composite oversight score of 39 (out of 100).

Another step may be taken to ensure inclusive public participation in the process of preparing and implantation of the budget for greater budget transparency.

Bangladesh has got a public participation score of 13 (out of 100).

Its National Board of Revenue (NBR) has established pre-budget consultations with the business community during budget formulation but, to further strengthen public participation in the budget process should also prioritize some of the actions.

The Ministry of Finance hardly consults with civil society on policy issues.

Authority may expand mechanisms during budget formulation that engage any civil society organization or member of the public who wishes to participate.

The vulnerable and underrepresented communities should also be heard directly or through civil society organizations representing them.

The lawmakers, through the standing committee of the Ministry of Finance, has reportedly established public hearings related to the approval of the annual budget, but should also allow any member of the public or any civil society organization to testify during its hearings on the budget proposal prior to its approval.

There is a perception that the Office of the Comptroller and Auditor General of Bangladesh may establish formal mechanisms for the public to assist in developing its audit program and to contribute to relevant audit investigations.

The Parliament provides limited oversight during the planning stage of the budget cycle and weak oversight during the implementation stage.

The executive’s budget proposal should be submitted to lawmakers at least two months before the start of the budget year.

Parliamentary committees should examine the executive’s budget proposal and publish reports with their analysis to the citizen preferably through an online platform.

A Parliamentary committee should examine the in-year budget implementation and publish reports with their findings online. The Parliament should be consulted before any change in tax structure and re-allocation of the budget passed through the enactment of the Finance Act of each year.

Moreover, the constitution has another obligation to amend the act through an ordinance by the President of the country.

The provision of the constitution should be evaluated further to specify the process of change in the finance act.

To strengthen the independence and improve audit oversight by the Bangladesh Office of the Comptroller and Auditor General, a Parliamentary committee should examine the Audit Report and publish a report with their findings online.

The audit processes are reviewed by an independent agency.

Bangladesh does not have any independent fiscal institution (IFI).

IFIs are increasingly recognized as valuable independent and nonpartisan information providers to the Executive and/or Parliament during the budget and audit process of CAG.

Open budget systems and practices lead to more efficient outcomes and are essential for holding the government accountable for the management of public funds.

The increasing transparency as well as better credit ratings in a cross-section of countries when controlling for several other variables, such as gross domestic product per capita, default history, and external debt and deficit levels.

Source: Dhaka Tribune

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