BD needs domestic push to maintain growth target

Bangladesh needs to assess its domestic capacity to maintain its target of 7.0-percent annual GDP growth, said the Asian Development Bank's (ADB) country chief on Monday.
"Does the banking sector have the capacity to facilitate the increased demand from investors to drive economic growth?" ADB Country Director for Bangladesh Edimon Ginting asked at a Quarterly Luncheon Meeting of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI), at its Gulshan office on Monday.
"If not, then we really need to expedite reforms that will attract capital to the country, through both domestic and overseas investment," he added.
To sustain the growth target, the ADB country director recommended reforms, particularly, in the banking sector. He also called for a focus on climate change, skills development and measures to attract and facilitate both domestic and foreign investment.
For the current fiscal year, the government has revised its growth target to 6.5 per cent from 7.5 per cent. The ADB, however, forecasts a growth of 6.1 per cent.
In its recent economic outlook, the Manila-based multilateral lender projected 6.6 per cent GDP growth for the next fiscal year.
At the MCCI meeting, MCCI President Kamran T Rahman delivered the welcome remarks. Habibullah N. Karim, the chamber's vice-president, delivered the vote of thanks. The event was moderated by MCCI Secretary-General and CEO Farooq Ahmed.
The MCCI president acknowledged the ADB's assistance in developing Bangladesh's climate resilience, infrastructure, social protection, job creation and water and sanitation landscape.
MCCI, as a leading trade body of the country, is well-positioned to partner with the ADB to cultivate a favourable business environment, according to Mr Rahman.
He believes that the ADB's expertise, combined with MCCI's local knowledge, offers a unique opportunity to address Bangladesh's business challenges.
In his speech, ADB Country Director Edimon Ginting appreciated Bangladesh's growing role in the global economy and pledged the ADB's continued support in further enhancing it.
He identified potential for increased investment flows, skills development and overall capacity building in the country. He said a good competition policy is required to bring in new investments.
Mr Ginting also underscored the need for human resource development and improved economic governance -- areas where the ADB could offer more support.
An open discussion took place before the conclusion of the event. It covered topics such as the scope for ADB financing in Bangladeshi taka, the ADB's new indirect financing rule in the country, the need for ADB funding in social security and quality standards development, the ADB's role in
governance and law enforcement and capacity development initiatives in Bangladesh.
Mr Ginting pointed out that Bangladesh's banking sector is smaller than the country's needs, with limited capital available for private investors due to high levels of non-performing loans.
He said the banking sector needs to ensure better management by improved economic governance.
On revenue mobilisation, he said it is important to mobilise higher revenue prudently, considering the country's still-low tax base.
Regarding the Bangladesh Investment Development Authority (BIDA), Mr Ginting said it has a broad mandate but limited capacity, hampering its ability to deliver essential services.
He said a strong competition law is a must for safeguarding good investment practices.
While responding to a query, He said domestic industries are receiving significant protection, which could affect their export competitiveness.
Mr Ginting concluded by calling for bold reforms, focusing on economic diversification, green growth and human resource development.

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