2008 will be 'crucial' for economy

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Jasim Uddin Haroon
The country's leading businessmen and economists said 2008 will be crucial as well as challenging for the overall economy.
But, implementation of the planned road map for the general election, restoring confidence among the businessmen, containing galloping inflation rate would help combat the challenges successfully, they said.
They said enhancing social safety nets like the Vulnerable Group Feeding (VGF), Vulnerable Group Development (VGD), Food for Work and providing food subsidy at the distribution stages for the poor would resolve some of the crucial challenges.
The business leaders and economists also said that formation of truth commission should be expedited along with giving momentum to the already formed better business forum (BBF), regulatory reforms commission (RRC) to help restore business confidence.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue (CPD) told the FE Monday that reducing inflation to a tolerable level, enhancing agricultural rehabilitation programmes and good Boro and Aman harvest will ensure a better state of economy in the 2008.
"The country will face another big challenge if the next agricultural crops slows down as it will impact on the budgetary allocation necessitating food imports," CPD executive director added.
He also said the export growth should be raised by at least 30 per cent during the remaining eight months of the current fiscal for ensuring a better balance of trade.
President of Bangladesh Economic Association Kazi Kholiquzzamn told the FE that restoring confidence among the business is most urgent as only active and spontaneous involvement of the private sector would contribute to raising the gross domestic product.
"Agricultural rehabilitation programmes and other safety nets should be strengthened otherwise the poor will suffer," he added.
Acting president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) MA Salam told the FE that withdrawal of safe guard measures on the Chinese apparel export by the European Union (EU) is a major challenge for their sector.
"We are afraid of the withdrawal of the safe guard by the EU but we might perform well following congenial environment in the country," he added
Hossain Khaled, President of the Dhaka Chamber of Commerce and Industry (DCCI) told the FE that proper functioning of the BBF and the RRC might pave the way for restoring confidence and investment friendly environment in the country in 2008.
"I think government intervention on the normal business functioning on different excuses will hurt the business and the economy and we want government's role as facilitator in the new year," DCCI chief said adding "otherwise the new year will remain same as 2007".
Acting president of Chittagong Chamber of Commerce and Industry MA Latif told the FE that the government's main challenge is to sustain the achievements attained by the reform programmes in 2008.
"The business slowed down during the first few months of the 2007 due to the vigorous reform programmes, but we got good results later," CCCI chief added.
He also said the government should take steps to institutionalise the reforms at the Chittagong port, Chittagong Customs House and other government offices.
Professor of Economics of the Dhaka University Abu Ahmed told the FE that there is no alternative for the government to raise the GDP and only private sector might help raise it.
UNB adds: Country's business activities are likely to regain to some extent in the New Year overcoming the setbacks caused mainly due to the anti-graft drive that shattered business confidence.
"Formation of Better Business Forum (BBF) itself should give some confidence," Bangladesh Bank Governor Dr Salehuddin Ahmed, also a member of the high-powered BBF, told UNB today (Monday).
"Political uncertainty is unlikely to affect business that much," he said replying to a question, adding that it could be seen there would be some impact if the policies now in hand are implemented.
Business confidence declined largely during the last quarter of the outgoing year compared to the previous quarter despite recent government steps to ensure a better business environment in the country, according to a recent study.
However, the confidence is likely to improve a little during the next quarter (January-March), said the study by Shamunnay, a local socioeconomic research organisation.
Economist Dr Atiur Rahman, also Shamunnay chairman, thought that the business confidence is unlikely to improve much despite the formation of BBF and the Regulatory Reforms Commission (RRC). "It's not certain… let's wait and see."
Talking to UNB, Dr Atiur attributed investment slowdown as the most important cause behind the slow economic growth and found poor business confidence causing investors to shy away.
He said the investors always take their investment decisions in line with the government economic and political policies, but it seemed at this present unstable situation "different types of policy instructions were coming from different sides of the government."