The challenging New Year

FE Team | Published: December 31, 2017 19:02:08

Yet another year on the Gregorian calendar passed into perpetuity leaving behind events and memories that were both relishing and nightmarish. With the end of the year 2017, the nations across the world have stepped into yet another year unaware of what remains in store for them. Nonetheless the start of a New Year offers ample opportunity to reflect on the immediate past and speculate on the future. As the peoples celebrate the New Year, they do speculate on their wellbeing, at both individual and collective levels. The celebration of the New Year in recent times both at home and abroad has acquired new dimensions; it is marked by unique festivity, pomp and grandeur.
From retrospective perspectives, the peoples would find that populism and ultra-nationalism that had taken hold in some parts of the developed world in the recent times notably lost steam in the year 2017. However, dilution of globalisation and multilateralism in trade and other important international issues such as united fight against global warming persisted throughout the year. Some leaders of the developed and powerful nations demonstrated their willingness to be 'protectors of their own national interests', instead of becoming the leading promoters of international cause.
However, at least, one new and young leader, France's President Emmanuel Macron promises a new kind pro-globalisation social contract. This has the potential to promote competition and entrepreneurship. The world would closely watch the move that Mr. Macron makes. After the great recession of 2009, the world economy was on a recovery path in the last couple of years. Expectations are quite high about the recovery gathering pace in 2018. Such a possibility, however, remains uncertain for central banks have lately been opting for tight policies. This development gives some ominous signals about global trade and aid, particularly for countries like Bangladesh.
Bangladesh's economic performance in the immediate past year was somewhat mixed with a number of macro-indicators doing well and some others showing signs of weaknesses. Its gross domestic product (GDP) growth performance was impressive at over 7.0 per cent. There are however different views about how the country's GDP is calculated with sceptics having their reservations for the official data on its economic growth rate. The country's export performance and remittance earning were well below expectations in 2017. After many years, its overall balance of payments (BoP) turned negative; the economy faced inflationary pressure in the final months in 2017, mainly due to surge in prices of rice and some other essentials. The major sore point of the economy experienced in 2017 was the unabated rise in soured assets of the country's banks and poor financial health of most public sector banks and a number of private ones, including those which started their journey not long ago.
Investment and private-sector credit-growth situation, as the official data indicate, showed improvements in 2017 over the corresponding levels of 2016. The government's net borrowing from the banking system was in the negative as it got more than enough through sales of its savings instruments. The country faced a major humanitarian crisis in the second half of 2017 when more than 0.6 million Rohingyas from neighbouring Myanmar entered its territory to escape ethnic persecution there. The influx has stirred up major international condemnation; the two governments are now in the midst of an intense negotiation on starting the repatriation of the Rohingyas to their homeland.
The country enters the New Year which in all likelihood will prove challenging, both politically and economically. The next national election is scheduled for the final months of this year or the first month of 2019. It is hard to rule out political troubles, ahead of it, in the event of persistence of disagreement over the process of its holding. Its economy could be a major casualty, as it happened during past elections, of political rivalries. Let's hope it does not happen this time. Unbridled corruption, tax evasion, capital flight, poor governance, regulatory failures, institutional malfunctioning etc., can further compound problems on the country's economic front, particularly about its growing income inequality. While its economy has thus been, on the whole, growing at a commendable rate, what is missing most is the 'feel good' factor. At the beginning of the New Year, all concerned do need to take a firm resolve to help reverse such a situation. It is no easy job but this provides no good reason for any laxity here.