Economy needs radical policy options, says Unnayan Onneshan

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FE Report
The proposed budget for the 2010-2011 fiscal year lacks radical schemes and options needed to lift the country's economy to a high growth trajectory, a local think tank said Saturday.
"The government has to recover from the current economic slowdown to escalate the rate of growth from the current annual average of 6.0 per cent and drive growth through expansion of productive capacity in real sectors," said Unnayan Onneshan, a research organization.
In its rapid assessment of national budget of 2010-2011, Unnayan Onneshan said to recover from the current slump and to accelerate the growth require fundamental policy shifts and initiatives.
It said the government has to recover from the current slowdown, partly attributable to the lagged effect of the global slowdown and partly owing to inherited decline associated with steps of the previous interim government.
The research outfit said the government also needs to drive growth through expansion of productive capacity in real sector such as agriculture and industry, enhancing employment and reducing poverty.
"It took the last two decades to increase the country's average annual GDP growth from 4.0 per cent to 6.0 per cent. Given such a track record of the economy over the decades regarding the rate of growth, there is no denying that the proposed budget is required to coming up with fundamentally different policy initiatives targeting for such a huge acceleration."
The government has projected growth rate for the upcoming fiscal year at 6.7 per cent - a figure many have termed as "ambitious".
The think tank also said the government also needs to come up with radical policy options in order to achieve the target growth of 8 per cent by 2013 as the share of agriculture and industrial sectors to the GDP is on the declining trend.
It said investment is also a crucial part to implement the Tk 1.32 trillion budget properly.
Unnayan Onneshan said there has also been a rapid decline in the amount of foreign direct investment.
The capital mobility in the economy has been negatively affected by factors such as infrastructural constraints, political variables, international financial linkages and fiscal policy coordination, it said.