Focus on economic priorities to skirt global financial crisis: Moriarty

---

FE Report
As the global financial crisis engulfs economies across the world, the US ambassador in Dhaka James F Moriarty said Sunday Bangladesh should stay focussed on 'economic priorities," broadening its export base and investing in infrastructure.
"I think the current financial crisis reinforces the need for Bangladesh to focus on economic priorities," he said.
Investments in infrastructure, diversification of exports and manufacturing, enhancing food security, and the development of human resource should be the priorities, he said while speaking at a luncheon meeting in the city, hosted by the International Business Forum, Bangladesh (IBFB).
His speech at the meeting was mainly focussed on the global financial crisis and its impact on Bangladesh.
Bangladesh's export basket remains precariously narrow, with more than three quarters of export earnings coming from shipment of apparel items to the US and European markets. The other major export-oriented sectors are frozen foods and leather and leather goods.
The US remains the country's single largest export destination and concerns are deepening over the fact that any protracted recession in the world's biggest economy would slow down Bangladesh 's apparel exports.
In fiscal 2007, Bangladesh shipped merchanside worth US$ 3.4 billion, while imports from the US totalled $384 million, leaving a big trade gap in favour of Dhaka.
Responding to a question, Mr Moriarty said the ready-made garment exporters would well weather the possible trade shocks by being 'competitive and innovative.'
He also said the United States, battered by the financial meltdown, will continue to be "a committed partner" as Bangladesh pursues its economic priorities.
The efforts put and resources spent on this financial crisis have led some to question the commitment of developed countries to helping poor nations around the globe, he added.
But he insisted that his government would continue to support poorer nations in their development efforts.
"Let there be no question that the United States will continue to stand by its friends, including Bangladesh ," the US diplomat said.
Mr Moriarty analysed the origins of the current crisis in financial markets and how it spread to the Main Street from the Wall Street.
He said the global nature of the current problems makes it 'critical' for nations to work together to solve the problems.
The US ambassador, however, underlined the need for staying committed to the basic free market principles that have "lifted millions of people out of poverty and have ensured prosperity for millions of others."
Referring to the US housing bust, Mr Moriarty said low interest rates, easy credit and rising housing values encouraged many home buyers to purchase homes they could not really afford.
He added that the shaken investor confidence in housing markets had a domino effect throughout world markets and the unwinding of complex financial instruments forced institutions, like AIG, and even countries, like Iceland, to the brink of collapse.
But he said the United States and other governments around the globe have moved quickly, and in concert, to tackle the crisis.
In early October, the Federal Reserve lowered key interest rates jointly with several European central banks and the Bank of Canada, with the Bank of Japan expressing support.
Nations around the world, from Europe to China, have announced rescue and stimulus packages to bolster financial markets and boost the real economy.
Most recently, Mr Moriarty noted that President Bush hosted a summit of G-20 leaders whose economies account for roughly 85 per cent of global GDP.
The grouping launched a detailed action plan that includes, among others, transparency and accountability, sound regulation, financial market integrity, international cooperation, and the reform of international financial institutions.
He said the action plan tasks G-20 finance ministers to take specific actions immediately and in the medium-term.
The US ambassador noted that open economies and well-functioning markets are essential to economic growth, employment and prosperity.
"This crisis can only be resolved through a commitment to the rule of law, respect for private property, open trade and investment, competitive markets and efficient, well-regulated capital markets," he observed.
IBFB president Mahmudul Islam Chowdhury also spoke at the luncheon meeting.