The government has planned to recast its poverty reduction strategy paper (PRSP) in two months to face the worsening global economic crisis, which has started to bite the country's main growth levers, officials said.
The move comes after an independent poverty reduction strategy monitoring committee led by economist Wahiduddin Mahmud Thursday advised the planning ministry to 'overhaul' the PRSP, making it fit for new global economic order.
The last caretaker administration framed the three-year PRSP --- the government's main strategy document for development --- in October last year aimed at boosting economic growth to 7.2 per cent by FY2011.
But months into the paper was framed, the world is in grip of the worst economic downturn since the 1930s with Bangladesh witnessing sharp squeeze in its merchandise and manpower exports.
"We are facing now an extraordinary situation and are dealing with a different reality," said Mustafizur Rahman, executive director Center for Policy Dialogue (CPD) and a member of PRS monitoring committee.
"The global economic meltdown has changed our growth outlook and macro-economic projections. However, the existing PRSP does not reflect this changing global economic scenario and how it is affecting Bangladesh," he said.
Although the global downturn first hit the top economies and big Asian exporters from late last year, Bangladesh escaped the first round of the fallout thanks to its controlled financial system.
But in the recent months, the country's merchandise shipments have become stagnant while manpower exports plunged by at least 40 per cent due to sharp decline in oil revenues in the Gulf countries.
"We need to recast the PRSP so that we can absorb the shock. These new strategies would also help the government frame the upcoming budgets," Mustafiz said.
Planning ministry officials said the committee led by Prof. Mahmud has already suggested the government to work out ways to weather the global meltdown in an "emergency basis" within two months.
The committee was initially tasked by the Prime Minister to recast the second PRSP reflecting the ruling Awami League's election manifesto in a bid to bring down poverty rate to 25 per cent from 40 per cent by the year 2013.
In its manifesto, the Awami League promised to steer the country's economy to a good shape by the time it ends its tenure and bring unemployment rate down to 15 per cent from the existing 40 per cent.
"Since the present government has vowed to implement its election manifesto, some new strategies and plans will be included in the current PRSP," the ministry official said.
But he added that the latest global economic meltdown has become the top worries for the PRS monitors due to the severity of the situation --- in addition to pledges made into the manifesto.
The first poverty reduction strategy paper, which expired June 2007, was adopted in July 2005, by the BNP-led four-party alliance government. Then the government prepared an extended PRSP for the FY08.
The current PRSP has projected a fund allocation of total Tk3190.44 billion to implement development and poverty reduction programme during FY2009-FY2011.
But Mustafiz said the latest crisis has even changed the 'resource allocation' outlook, as the government's revenue and aid projection might now fall far short of the PRSP target.
The document has singled out private sector out as the main driver of growth, eyeing Tk4508.5 billion (US$65.7 billions) investment from the sector during the three-year implementation period.
The PRSP set the ambitious target after the planning ministry said some 80 per cent of the country's GDP and 90 per cent of the employment are now generated by the private sectors.
