Boosting savings, investment key to attaining double-digit growth: BoI chief
Monday, 9 November 2009
FE Report
Boosting savings and investment would be the key to attain double-digit economic growth, the head of Board of Investment (BoI) said Sunday.
Dr. S.A. Samad, executive chairman at the state-run BoI, said the investment-GDP (Gross Domestic Product) ratio should be moved up to 40 per cent if the country wants to attain the middle-income status.
Despite stinging global crisis, Bangladesh managed to grow by 5.9 per cent in 2009 fiscal, slightly lower than 6.2 per cent in 2006 fiscal year.
The country's growth could reach 6.0 per cent in the current financial year, but the World Bank says it must sustain 7-8 per cent a year to become a middle-income nation in a decade or so.
"Even savings-GDP ratio is important for (higher) growth. We need to increase it to 15 per cent, from 5 per cent," Mr Samad told a luncheon meeting, hosted by FICCI, a club of foreign investors.
"But it will take time. Rome was not built in a day. A startling improvement is required for increased investment," he added.
The BoI boss's remarks comes at a time when the country struggles to boost the foreign investment flow, which crossed US$1.0 billion mark in the country's history only in 2008.
"It was not a regular phenomenon. The flow increased due to the purchase of share in a telecom company," he told the foreign investors' community.
He said he became dejected when he looked at the investment figures.
The BoI chief said Bangladesh strived hard in the mid-1990s to attract FDI, even organised roadshows in multiple foreign cities, but little investment poured in.
Overseas capital registered with the investment board amounted to $573 million in January-July period this year, according to Bangladesh Bank figures.
Mr. Samad, also a former principal secretary, said Bangladesh can absorb US$3.0 billion to $5.0 billion in investments a year without being overheated.
The state investment promotion agency now targets to raise the investment flow to $3-$5 billion as it feels the investment climate in the country has started improving.
Boosting savings and investment would be the key to attain double-digit economic growth, the head of Board of Investment (BoI) said Sunday.
Dr. S.A. Samad, executive chairman at the state-run BoI, said the investment-GDP (Gross Domestic Product) ratio should be moved up to 40 per cent if the country wants to attain the middle-income status.
Despite stinging global crisis, Bangladesh managed to grow by 5.9 per cent in 2009 fiscal, slightly lower than 6.2 per cent in 2006 fiscal year.
The country's growth could reach 6.0 per cent in the current financial year, but the World Bank says it must sustain 7-8 per cent a year to become a middle-income nation in a decade or so.
"Even savings-GDP ratio is important for (higher) growth. We need to increase it to 15 per cent, from 5 per cent," Mr Samad told a luncheon meeting, hosted by FICCI, a club of foreign investors.
"But it will take time. Rome was not built in a day. A startling improvement is required for increased investment," he added.
The BoI boss's remarks comes at a time when the country struggles to boost the foreign investment flow, which crossed US$1.0 billion mark in the country's history only in 2008.
"It was not a regular phenomenon. The flow increased due to the purchase of share in a telecom company," he told the foreign investors' community.
He said he became dejected when he looked at the investment figures.
The BoI chief said Bangladesh strived hard in the mid-1990s to attract FDI, even organised roadshows in multiple foreign cities, but little investment poured in.
Overseas capital registered with the investment board amounted to $573 million in January-July period this year, according to Bangladesh Bank figures.
Mr. Samad, also a former principal secretary, said Bangladesh can absorb US$3.0 billion to $5.0 billion in investments a year without being overheated.
The state investment promotion agency now targets to raise the investment flow to $3-$5 billion as it feels the investment climate in the country has started improving.