Prof Mahbubullah says economic stability is impossible without ensuring social power balance

Bangladesh’s enduring economic vulnerabilities cannot be resolved without establishing a genuine balance of power in society and dismantling the long-standing “loot-and-plunder economy,” former chairman of Dhaka University’s Development Studies Department Professor Mahbubullah said on Monday.

He argued that since December 16, 1971, the country has remained trapped in a cycle of primitive accumulation—an economic setup that distorts incentives, suppresses productive growth, and entrenches inequality.

The economist made the remarks at a seminar on two publications, Bangladesh State of the Economy 2025 and Sustainable Development Goals: Bangladesh Progress Report 2025, held at the NEC Conference Room in the capital.

Despite numerous policies and reform attempts, Bangladesh has failed to achieve durable outcomes because economic extraction and the transfer of wealth “from one set of hands to another” remain embedded in the system, he said.
“Unless we put an end to this continuous reshuffling of wealth, real productive growth will remain out of reach,” he warned.

Mahbubullah stressed that meaningful reforms relating to governance, investment, and market operations cannot take root without rebalancing the social and political power structure.
“We often speak of democracy and good governance, but neither can be achieved while this accumulation process persists. A fair distribution of power is the prerequisite for a functioning economy,” he stated, cautioning that reforms risk becoming superficial without such a foundation.

On inflation, he expressed scepticism that Bangladesh would be able to rein in price pressures within the next one to three years. Persistent supply-side bottlenecks, limited productive capacity, and a large demand burden driven partly by population growth make a rapid recovery unlikely, he said.

“Inflation cannot be controlled when commodity supply falls short of the money supply. Production must increase, but investment is stagnant. Without new investment, expanding supply in the short term is impossible,” he noted.

He further highlighted that prolonged government spending and increased liquidity have widened the gap between money circulation and the availability of goods.

Expressing concern over the “sluggish and depressed” investment climate, he warned that the country’s productive base is not expanding quickly enough to absorb labour or support stable long-term growth.

While the economy continues to rely heavily on readymade garments and foreign remittances, Mahbubullah said other promising sectors—including pharmaceuticals, ceramics, and light engineering—have failed to scale up due to structural barriers and weak incentives.

“A coherent incentive structure across fiscal, monetary, and planning policies is still missing. Without it, investors cannot be expected to take risks or expand production,” he said.

Describing the prevailing economic order as one centred on extraction rather than production, he argued that wealth continues to be generated through rent-seeking, misuse of state power, and distortive incentives rather than through productive investment.

“This loot-and-plunder economy has existed under every government for 54 years—sometimes more intensely, sometimes less—but we have never truly escaped it,” he remarked.

He concluded that unless Bangladesh shifts decisively toward a production-based economic model, growth will remain fragile and uneven.