Sustained inclusive economic growth key to boosting domestic demand: BB Governor

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Bangladesh Bank Governor Dr Atiur Rahman has said that sustained inclusive economic growth with advancement opportunity open to all will be the key to strengthening domestic demand by reducing poverty as a defense against future financial crisis, reports UNB.
"The root cause behind weaker domestic demand in our region is poverty and low income of large part of the population. In fostering inclusive economic growth, central banks in the region will need to be proactive in promoting financial inclusion, with action programmes for bridging the market gaps and failures in reaching out to the excluded and under-served population segments and economic sectors," he said.
The Governor made the remarks in a keynote speech on "responses to the recent global financial and economic crisis - lessons in bolstering resilience and preventive defenses' at ESCAP in Bangkok on Tuesday.
Calling for a global dialogue on substantive reforms of the existing monetary order, Dr Atiur said: "If this is delayed indefinitely to be forgotten as the world recovers from the current crisis, it may not be very long before another episode of global imbalances cause surging global liquidity to inflate another round of credit bubbles and price bubbles, eventually collapsing to precipitate the next global crisis."
He said sustained inclusive economic growth should provide the increased revenues needed to finance expansion of the social safety networks; but richer advanced economies, multilateral development banks and private philanthropies will have important supportive roles to play, particularly at times of crisis and emergency.
The Bangladesh Bank governor said the vast majority of workforce in developing countries like Bangladesh being employed in the informal sector, promotion of well managed pension funds will be important in underpinning consumption demand from senior citizens as they retire from working life.
He noted that the pension funds will also be important financing sources for infrastructure and other longer gestation investment projects.
On promoting intraregional trade and investment, Dr Atiur said since financial markets in the region failed to be proactive in channeling the mounting regional reserves in infrastructure and other growth supportive real sector investments in the region, stronger direction and guiding hand from intergovernmental forums like the ESCAP may be the need of the hour.