The proposed national budget for the 2005-06 fiscal year is ‘election-centric', ‘influenced by corrupt people' and ‘not based on the PRSP [Poverty Reduction Strategy Paper]', said the Bangladesh Economic Association on Sunday.

'The budgetary provision of whitening black money will be further confirmation of the “corrupt nation” image of the country,' said the BEA president, Qazi Kholiquzzaman Ahmad.

‘It appears that the government is encouraging corrupt people to indulge in more corruption by enabling them to clean their dirty money by paying some lump sums,' he told a news briefing at the National Press Club.

‘Moreover, the budget has not been framed on the basis of the poverty reduction strategy paper as it has no clear provisions for employment generation, In fact, the government as well as the finance minister has no real knowledge of the unemployment and poverty that is crippling our country.'

The finance minister has proposed allocation of Tk 4,600 crore for poverty reduction and employment generation but has not mentioned any other vital details of how and for whom the fund will be used, said the BEA general secretary, Abul Barakat. ‘Micro-credit will do little to create employment in the long run.'

Although a strong local government is a must for rural development and poverty reduction, the proposed budget does not have any provision to strengthen local government, he added.

He said by extending the deadline for whitening black money up to June 30, 2006 , the finance minister has officially encouraged corruption. ‘It is clear there is considerable political, business and election pressure that forced him to change his mind at the last moment.'

In a similar vein, Kholiquzzaman said there was no provision for strengthening the Anti-Corruption Commission.

He ruled out the finance minister's claim that the national economy would face problems if the money laundering facility was discontinued.

‘It is surprising that the finance minister has found out these problems only 4-5 days before the budget's announcement.'

‘How can it be possible that such an experienced finance minister is not aware of the movement of black money and its implications for the economy?' he questioned.

In the post-budget press briefing on Friday, Saifur Rahman said he had extended the deadline for whitening black money to check capital flight and prevent a negative impact on the economy due to termination of the money laundering provision.

With regard to the macroeconomic front, the association predicted upward inflationary pressure in the coming days. ‘The higher non-development expenditure and incremental government bank borrowing for different unproductive expenses due to the election will further increase inflation,' Barakat said.

If this trend continues, inflation will cross the double digit mark in the next fiscal year,' predicted Qazi Kholiquzzaman Ahmad.