Economic advancement depends on several applications, from proper policy-making to implementing assigned tasks at the right time. Good governance should be ensured in every aspect of work.
Every country, especially developing countries like Bangladesh, must practice proper equilibrium between order and accountability to drive its operating system correctly.
Good governance is crucial to developing in all sectors, for example, the financial system, health, law enforcement, education, democratic system, social and religious aspects, project implementation, etc., where the lack of it may incur significant financial losses, either through corruption or system disruption, that lead a country to further economic losses or slow GDP growth.
However, the definition of good governance should be clear to policymakers and all classes of people of any respective country, as it is often described as a political issue practised by political leaders or upper-level government officials.
However, the concept is partial, as it encompasses more widened areas, and its workflow covers all activities undertaken by public and private initiatives for the people.
Moreover, good governance does not crown itself only by selecting leaders for any work; it assures the after-work dimensions and makes those leaders responsible in front of interrogation if the work is not up-to-date with reality.
During the regime of Sheikh Hasina’s government, government projects, especially mega projects, were questionable.
Padma Bridge, Metro Rail, Cox’s Bazar Rail Road, and some other projects played good roles in the economy, but from the perspective of the budget, while doing those mega projects were highly corrupted. That often raises the question—where was good governance at that time?
Before describing the importance of good governance, we will examine the current scenario of Bangladesh’s banking sector.
According to Bangladesh Bank, the total amount of Non-Performing Loans (NPL) was around 22 thousand crores BDT in 2009, which increased to around 1 lakh 82 thousand 295 crore BDT in 2024.
Such an amount of NPL is definitely a disaster for the economy, demonstrating the lack of good governance in the banking sector.
Credit Risk Grading (CRG) is essential when providing loans to different individuals.
If the banks complied with the CRG model perfectly and only approved loans to those who satisfied the criteria to get a loan, then the amount of NPL would not be in that disastrous situation, which sends a message regarding the importance of good governance in the banking sector.
Good governance in the capital market is one of the pillars of the economy’s stability. The listed companies on the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) trade their stocks or shares in the capital market and issue bonds to the people.
Bangladesh Securities and Exchange Commission (BSEC) must ensure the proper investment environment for stock market investors by implementing appropriate policies and avoiding corruption and partiality.
The share market falls in 2009-2010 showed the weak monitoring system, lack of proper policy, and duplicity of the influential investors in this market. This indicates a lack of good governance in the share market, which directly affected the economy and caused many investors to lose their invested capital.
Also, corruption in Initial Public Offering (IPO), issuance of placement shares, and illegal syndicates by influential business people and government officials have made this market highly volatile for the last several years.
This trend demotivates investors to enter the capital market, threatening money circulation in the economy. On the other hand, well-planned policies and a proper monitoring system can stabilise this market, which will play a significant role in the economy.
Good governance practices are incredibly significant in export-oriented businesses, as foreign buyers often cancel their orders if good governance is disrupted by labour law or a lack of transparency in work procedures.
Foreign buyers prioritise compliance with labour law and safety tools, especially in the ready-made garment (RMG) sector. They cancel orders if there is any work or labour safety mismanagement.
Ensuring freedom of speech and a democratic environment to select leaders are prerequisites to establishing good governance in a country.
Not only at the national level but also in the local or organisational leader selection process, the scope to select leaders without intervention can promote democratic practice in a country, and democratic leaders can best suit people’s engagement for the welfare.
After the July revolution, people were more conscious of their freedom of speech and the implications of democracy, which are good aspects for Bangladesh.
These trends should be continued to achieve emancipation in life, which can enhance the practice of good governance in the country.
Lack of good governance motivates corruption, which enhances money laundering and ultimately paralyses the economy. When local currencies are transferred abroad illegally, it creates money shortages in a country, which causes inflation.
Voting rights should be free to ensure proper accountability. This would ensure good governance in all of Bangladesh’s sectors, which would be helpful for the country’s economic advancement.
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