Some tough govt steps slow down the economy: Experts

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The absence of democracy has slowed down the country's economic activities, including export and investment, experts told a discussion in the city Saturday, reports UNB.
They felt that the quick restoration of democracy is a must to revive the confidence of the private sector, which is the main driving force of economic growth.
Bangladesh Policy Forum (BPF), an independent think tank, organised the discussion at the National Press Club to focus on the current economic trends and challenges with Prof Farid Uddin Khan in the chair.
Former Energy Ministry Adviser Mahmudur Rahman presented the keynote paper in the meeting, which was addressed, among others, by Prof Dr Mahbubullah of Dhaka University and Brig Gen (retd) Shafayet Ahmed.
They told the discussion that many tough government steps, including the ongoing anti-graft drive, has slowed down the economy.
The rural economy is one of the worst victims of the government's stringent measures as many local bazars where farmers and small village traders used to display their goods have been destroyed, they said.
Mahmudur Rahman said Bangladesh in its history experienced negative growth rate in export only thrice-in 1981-82, 84-85 and 2001-02 fiscal years.
The former BoI executive chairman said the export growth in 2007 fiscal was 16 percent against 22 percent of the previous year, and the trend might continue to come down further in the current fiscal year as the growth rate in July-August 2008 dropped to 11.7 percent.
He said the private investment growth was 18.7 percent in 2006 and 2007, while government investment fell to 5.6 percent in 2007 from 6 in 2006.
In his paper, Mahmudur Rahman said the country's total investment growth rate was 24.3 percent in 2007 against 24.7 percent in 2006. He said the Foreign Direct Investment (FDI) fell to 6-7 percent in 2006 ($ 625 million) as the FDI in 2005 was 692 US million dollars and it is apprehended that Bangladesh would get only 500 million US dollars in FDI in 2007.
Rahman said the import of capital machinery also showed a negative growth for the first time in the last five years as the machinery import rate in 2006 was 38 percent, which came down to 25 percent in 2007.
He voiced concern over the high inflation rates in the country terming 2007 as the year of the biggest jump in the inflation rate (7.54-9.20 percent).
According to the International Monetary Fund (IMF), he said, the GDP rate of Bangladesh is also showing downtrend as it decreased by 5.5 percent from 6.51 percent in 2007 which indicates that Bangladesh would not be able to reduce poverty as per the requirement of the Millennium Development Goals (MDGs) by 2015.
Mahmudur Rahman described low investment, unemployment, high inflation, high fuel prices, falling export trend, low crop yields and low GDP rate as the key challenges for the country's development.
Prof Dr Mahbubullah said the rural economy has suffered a big setback after the 1/11 changeover as the government indiscriminately destroyed hats and bazars in villages.
"I don't understand what is the relation between the eviction of hawkers, demolition of local hat-bazars and the anti-corruption drive," Mahmudur Rahman said.
Dr Mahbubullah said this year's floods in two phases and poor management of farm loans has severely harmed the country's crop outputs.
"The Aman paddy target has already failed. Now the government will have to make its best efforts to get the highest harvest from Boro paddy to avoid any possible food deficit in the country," he said.
Brig Gen Shafayet said some structures have been demolished, thousands of hawkers evicted and some people arrested by the present government. "But, was there any overall change in the economy following these steps?" he wanted to know.