BBS: An agency that helped the AL weave its ‘development’ fable

If you had ever asked an economist or development practitioner in private about the quality of data provided by the Bangladesh Bureau of Statistics (BBS) before 5 August, the answer would have varied from 'not so great' to 'absolute rubbish'. Off the record, one prominent economist even went as far as saying, "Don't ask me to comment on those lies." 

The recent findings from the Bangladesh Institute of Development Studies (BIDS) corroborates the notion; the 'User Satisfaction Survey 2024' reveals that only 29.39% of users expressed satisfaction with the quality of data provided by BBS. 

This dissatisfaction is emblematic of a broader issue of reliability within the BBS. Users have long raised concerns about the timeliness, consistency, and transparency of the data. With only 47.88% of users expressing satisfaction with the frequency of the statistics; this points to a systemic issue where BBS fails to provide timely updates in crucial areas like income, poverty, and agricultural data. 

The absence of reliable and up-to-date data complicates efforts to make informed decisions in governance, business planning, and research. This points towards an obvious question: To what extent did the data manipulation occur? And what are its consequences? 

The issue of dissatisfaction cannot be separated from the larger context of political interference and manipulation of data by BBS. Under the Awami League regime, the agency faced serious allegations of inflating economic figures — particularly concerning GDP growth — and deflating inflation rates, which were used to project a rosy economic picture. 

Birupaksha Paul, a professor of economics at the State University of New York at Cortland and former chief economist of Bangladesh Bank, was quite critical of AHM Mustafa Kamal, the Minister of Planning from 12 January 2014 to 7 January 2019 and Minister for Finance from 7 January 2019 to 10 January 2024, for his undue interference in data. 

"Sensitive data was doctored to suit the political narrative," he said, "also, the government had the privilege to manipulate and hide sensitive data as well. They manipulated the data opportunistically and made it politically palatable. Ministers who were proficient in data manipulation were rewarded. 

"And data frequency was also reduced. Because it allowed them to hide their weaknesses," he added. 

Riti Ibrahim, former secretary of the Statistics and Informatics Division, Ministry of Planning, shared similar experiences. 

"Suppose a certain figure needed to be shown as 15. But the data analysis yielded the number to be 6. It would not add up, obviously," she said. Then the data would have to be manipulated.

"National income account was shown to be larger than the actual figure, so that per capita income could be inflated. At the same time, inflation data was downsized. Why would you think the inflation rate hovered around 9%, but never crossed 10%? Because it was never shown." 

Birupaksha Paul, former chief economist, Bangladesh Bank

This issue became more pronounced in the sensitive branches that handled critical economic indicators, where data discrepancies were most prominent. Over time, this interference led to significant distortions in the published data, which misled not only domestic audiences but also international development agencies, as development partners like the World Bank relied on BBS data. Even then, there was scepticism. 

Bangladesh's Statistical Capacity Indicator, published by the World Bank, provides a stark reflection of this declining trust in the country's data. In 2014, Bangladesh scored 80 out of 100, signalling relatively strong statistical performance. 

However, by 2020, this score had plummeted to 60, a sharp decline that highlighted the country's struggles in maintaining credible and transparent statistical practices. 

The sharpest decline was seen in methodological indicators, where the score fell from 70 in 2014 to a mere 30 in 2020. This drop, significantly lower than South Asia's average score of 69, raised red flags among international development organisations and economists alike.

Concerns over the reliability of BBS data are not new but have grown over time. During the 2017-18 fiscal year, the government projected an economic growth rate of 7.65%, significantly higher than the World Bank's forecast of 6.65%. This discrepancy led to a public standoff between the government and international organisations, with the former holding a press conference to assert the accuracy of its data. 

Jyoti Rahman, a macroeconomist based in Australia, said, "Estimation of economic statistics such as the national accounts or consumer price inflation is inherently difficult. For example, it is not easy to capture the value added in modern services that rely on smartphones and apps. The problem is compounded when the statistics agency is politicised. 

"Like every other organ of the state, the BBS was also politicised under the fallen regime, with the worst excesses occurring when Mr Kamal was the Planning Minister," he added.

Kamal's successor in the Planning Ministry, MA Mannan, tried to curb the rampant politicisation, said Jyoti Rahman. 

"After the IMF program came into effect in 2023, the BBS started releasing the quarterly national accounts, which make it more difficult to fabricate economic growth figures. The CPI weights were also updated," he added.  

However, the BBS had already lost credibility under the old regime and therefore the methodological improvements failed to allay concerns, Jyoti Rahman opined. 

The manipulation extended beyond just GDP figures. 

Inflation data, another key economic indicator, was engineered to present lower-than-actual numbers. And the BIDS survey reflects it as well. The survey reveals that 33.16% of users do not trust BBS's inflation statistics. Also, 27.44% of users believe the data's reliability is low, and 5.72% consider it entirely unreliable.

Dr Birupaksha Paul said, "National income account was shown to be larger than the actual figure, so that per capita income could be inflated. At the same time, inflation data was downsized. Why would you think the inflation rate hovered around 9%, but never crossed 10%? Because it was never shown." 

Consequences of data manipulation on development and policy

The implications of manipulating data for political gain are far-reaching. Economists have likened governing with inaccurate data to driving blindfolded — decisions made based on flawed data often lead to ineffective policies that do not address the root causes of economic issues. 

Inaccurate GDP and inflation statistics distort the perception of economic progress, leading to misguided policies that may initially seem effective but ultimately cause more harm. 

For instance, overstating GDP growth can lead to premature claims of economic success, which can, in turn, justify a lack of investment in sectors that require critical attention, such as infrastructure and healthcare.

International organisations like the World Bank and the Asian Development Bank (ADB) have raised alarms over these discrepancies, noting that unreliable statistics make it difficult to assess the real economic situation of the country. 

For policymakers, the manipulation of statistics creates significant barriers to effective governance. Accurate data is the cornerstone of decision-making in any country. 

"When statistics are doctored to serve political narratives, the true state of the economy is obscured," said Birupaksha Paul. "Bangladesh becoming a developed country by 2041 was also part of this flawed narrative based on manipulated data." 

Jyoti Rahman supported the notion as well. 

"There is a saying in marketing that a salesperson shouldn't believe their own spin. It is hard to tell whether the old regime had adhered to this old dictum. Economic projections and policies had to use the official figures. But the economic modelling and methodology could always be adjusted by the officials to adjust for the exaggeration. 

"Perhaps as time went on, and the more experienced and seasoned officials left the bureaucracy, such adjustments became rarer," he continued. 

This makes it difficult for the government to implement policies that can address pressing issues like inflation, unemployment, and poverty. Misleading data on inflation, for example, resulted in policies that underestimated the severity of rising prices, thereby compounding the economic challenges faced by the population. 

When asked about the data manipulation, Mohammed Mizanur Rahman, director general of the BBS, said, "A White-Paper Committee has been formed under the leadership of Dr Debapriya Bhattacharya, who will investigate the methodology and credibility of the BBS data from the time in question. If they find any discrepancy, they will disclose it." 

About the political influence on BBS data, he said that he has not seen any outside influence during his time as the DG since last year. 

"I cannot comment on what happened at the time in question because I was not here back then." 

There is a saying in marketing that a salesperson shouldn't believe their own spin. It is hard to tell whether the old regime had adhered to this old dictum.

Jyoti Rahman, macroeconomist

Steps for BBS to improve transparency and accuracy

Restoring trust in BBS will require substantial reforms. Greater transparency and independence in how data is collected and reported is paramount. 

"Improvements in statistical methods are necessary to rebuild public trust. BBS should be more transparent about its data collection processes and consider gathering feedback from users," said Riti Ibrahim. 

One critical recommendation is the establishment of an independent oversight body that can monitor BBS operations and ensure the integrity of the data. Such a body would be responsible for conducting regular audits, detecting discrepancies early, and preventing political interference in the data collection and reporting processes.

Strengthening the internal capacity of BBS is another essential step. Appointing statisticians and professionals with technical expertise to key positions within the agency is crucial to ensuring the accuracy and reliability of the data. 

Currently, many leadership positions within BBS are filled by individuals from administrative cadres who may lack the statistical knowledge required for such roles. 

"BBS is currently dominated by administrative cadre officials in senior roles, which hampers its ability to function effectively. It is crucial to appoint statisticians to these key positions to ensure proper guidance within the agency. While technical committees are largely statisticians, involving external experts would enhance the quality of the data," Riti added. 

In addition, improving data accessibility and frequency should be a top priority. BBS must undertake comprehensive changes to rebuild trust, improve transparency, and ensure that its statistics are both accurate and timely. Only by addressing these issues can Bangladesh ensure that its policies are based on solid, reliable data that reflects the true state of the economy.

Dr Birupaksha Paul said, "We need more frequency of updates. Otherwise, how will you be able to predict the course of the economy? 

"Like every other government agency, the senior leadership should be revamped. This is necessary to restore public trust," said Jyoti Rahman. 

He is optimistic that over time, the BBS will publish various methodological assumptions and organise seminars and workshops involving independent practitioners, academics and journalists.

"These moves will help restore both competence and credibility of the BBS," he added as well. 

Moreover, like the US or India, there should be private think-tanks that can calculate large-scale data. 

Dr Birupaksha Paul thinks that ending the data monopoly of BBS will be helpful to create checks and balances, so that data manipulation can be detected.