Challenges before the new govt
Sunday, 28 December 2008
Syed Jamaluddin
BANGLADESH will have an elected government after December 29. There was no open political activity in the country during the last two years. Naturally expectations are high that the incoming political govt will deliver according to the expectations of the people. But this is easier said than done. As usual the major political parties are making tall promises before the voters. But it will be difficult to implement their ideas for many reasons. The new govt. will have many challenges which will require urgent attention. The manifestoes declared by the major parties are full of generalities. Major issues to be addressed by the newly elected govt. are discussed in here.
Meeting the consequences of global financial meltdown for Bangladesh will be a high priority for the new govt. They will have to protect the growth rate, ensure employment generation, sustain remittances, protect overseas jobs and strengthen exports. The new govt. may organise a strong economic team to deal with macro-economic issues and find out innovative ways of tackling major issues. We must have the ability to confront the donors. Foreign aid has to be used for productive projects. Dependence on foreign consultants may be reduced. Procedures need to be simplified for encouraging the public-private partnership. Attractive terms and conditions are to be offered to the officials for making them result-oriented.
The major parties have announced that they would bring down the prices if they are elected. But they have not indicated as to how this will be done. Price control is a difficult task in a free market economy. It all depends on supply of, and demand for, commodities. Prices can not be reduced by a stroke of pen. The political party in power will have to concentrate on supply-and-demand management. They have to make sure that syndicates do not manipulate prices. If there is no political patronage, syndicates are unlikely to be successful. Bangladesh is dependent on import of a large number of commodities. Govt. should control monopoly in importing goods.
There should be fair competition in importing goods so that prices can not be manipulated. Monopoly can work if there is price control as in the case of petroleum products whose prices are determined by the govt. Price situation becomes difficult during natural disasters for which advance planning would be needed. Govt. is already providing subsidy and financial incentives in a number of cases. There is scope for rationalisation of the incentive structure. One party leader has promised that fertiliser will be distributed free to the farmers. This promise is unrealistic and impossible to fulfill.
Education sector is also a priority for the next govt. One party leader has said that education for girl students up to degree level will be made free. Another leader has declared that education for both girls and boys will be made free up to degree level .These are all lavish promises. What is needed is improvement in the quality of education. Teachers should be trained adequately to impart quality lessons to the students. Dropouts from schools and colleges has to be reduced. Education has to be provided to child labour. Primary education should be comprehensive. Private universities has many problems which may be looked into. More research has to be encouraged at university level. Education is the backbone of the nation and therefore, all support is to be given to this sector. Private sector participation is quite high in cities. Their participation at district level should expand. Public and private sector should complement each other in the expansion of education facilities. Pay scales and other benefits for the teachers should be comparable to other sectors.
Meeting of the energy needs is going to be the number one challenge for the next elected govt. The power generation has been far short of requirement leading to frequent load-shedding. The short supply of gas is hampering production in existing mills and factories and power plants as well as discouraging new investments. A good number of industries set up recently could not be commissioned because of non-availability of gas. The extent of power shortage is not being felt currently due to winter. After few months, mills, factories and residents would again be subject to limitless suffering due to load-shedding. There will be long queues of vehicles before the CNG filling stations as soon as summer sets in. The coal policy should be finalised expeditiously. The prevailing situation in the energy sector is a major deterrent to economic growth. The use of coal for generating additional power appears to be the most feasible option under the present circumstances.
The new govt. has to start working on food security. They have to ensure a good boro output through taking measures to reduce prices of fertiliser and diesel because of lower international price. Work on poverty alleviation has to be intensified with priority on agriculture. Making available farm inputs at lower prices can help the rice prices to go down to some extent. Lower fertiliser prices in the international market will enable the govt. to reduce the price of fertiliser. Adequate stocks of foodgrains in govt. godowns have to be ensured for the sake of food security.
Investment will not pick up if there is persistent shortage of power and gas. This year's fall in investment is an example. Investment has to expand if growth rate is to be protected. Political stability after the election is likely to encourage investment. Absence of shutdown and violence will be helpful for attracting investment. Increase in domestic investment will facilitate foreign investment. Improvement of infrastructure facilities will be the key to investment. There are many prospective areas of investment in Bangladesh such as power, gas, coal, textiles, shipbuilding, pharmaceuticals, fertiliser and eco-friendly jute products. Board of Investment has to play a dynamic role in soliciting foreign investment.
There is uncertainty in the stock market. As the uncertainty over the national election is almost over, investors are preparing for getting healthy return after the election. Political stability after the election will be helpful for the capital market. Govt. has to take measures for further strengthening of the stock market.
Many state-owned enterprises are incurring heavy losses. Govt. has to spend a huge amount of money on those enterprises as subsidy. This is an old issue. Serious attention needs to be given to this problem. These enterprises may be privatised/liquidated/closed, depending on the situation. Resources released from these entities may be diverted to other priority development projects. In the past, govt. attitude was soft on this issue. But such an attitude has not solved the problem. Govt. can not bear the burden of sick industries.
Human resource development deserves priority. People from outside Bangladesh are being employed in our garment sector for want of trained manpower in the country. Therefore, we have to train up local people to take up job in the country. Training is also needed for those who are seeking job outside. Properly trained people can fetch more remittances for the country. The new govt. should adopt a manpower policy from the beginning. Adequate resources may be allocated for manpower development. Information Technology (IT) sector needs to be developed side by side.
The caretaker govt. has taken up a sizable safety net programme. This programme needs to be expanded to take care of all the vulnerable people. No body should be allowed to die from hunger. Monitoring implementation of the Annual Development Programme (ADP)should be given top priority by the new govt. Timely implementation of the ADP will ensure the overall growth rate of the economy. Private sector may be increasingly associated with project implementation.
Only one party has announced that they will propose a bill in parliament for banning hartal. But the two major parties did not say anything about this. If the parties returning to parliament would be able to take a decision to ban the hartal, it would be a landmark event. We keep our fingers crossed and hope to see a positive decision on this issue .Business people have been very vocal in requesting the parties for banning of hartal.
Apart from initiating action on the issues mentioned above in the first hundred days of assuming power, the newly elected govt. may consolidate the reforms introduced by the caretaker govt. The latter has taken many useful steps which need to be protected and advanced further. Reform process has to continue.
The writer is an economist and
columnist
BANGLADESH will have an elected government after December 29. There was no open political activity in the country during the last two years. Naturally expectations are high that the incoming political govt will deliver according to the expectations of the people. But this is easier said than done. As usual the major political parties are making tall promises before the voters. But it will be difficult to implement their ideas for many reasons. The new govt. will have many challenges which will require urgent attention. The manifestoes declared by the major parties are full of generalities. Major issues to be addressed by the newly elected govt. are discussed in here.
Meeting the consequences of global financial meltdown for Bangladesh will be a high priority for the new govt. They will have to protect the growth rate, ensure employment generation, sustain remittances, protect overseas jobs and strengthen exports. The new govt. may organise a strong economic team to deal with macro-economic issues and find out innovative ways of tackling major issues. We must have the ability to confront the donors. Foreign aid has to be used for productive projects. Dependence on foreign consultants may be reduced. Procedures need to be simplified for encouraging the public-private partnership. Attractive terms and conditions are to be offered to the officials for making them result-oriented.
The major parties have announced that they would bring down the prices if they are elected. But they have not indicated as to how this will be done. Price control is a difficult task in a free market economy. It all depends on supply of, and demand for, commodities. Prices can not be reduced by a stroke of pen. The political party in power will have to concentrate on supply-and-demand management. They have to make sure that syndicates do not manipulate prices. If there is no political patronage, syndicates are unlikely to be successful. Bangladesh is dependent on import of a large number of commodities. Govt. should control monopoly in importing goods.
There should be fair competition in importing goods so that prices can not be manipulated. Monopoly can work if there is price control as in the case of petroleum products whose prices are determined by the govt. Price situation becomes difficult during natural disasters for which advance planning would be needed. Govt. is already providing subsidy and financial incentives in a number of cases. There is scope for rationalisation of the incentive structure. One party leader has promised that fertiliser will be distributed free to the farmers. This promise is unrealistic and impossible to fulfill.
Education sector is also a priority for the next govt. One party leader has said that education for girl students up to degree level will be made free. Another leader has declared that education for both girls and boys will be made free up to degree level .These are all lavish promises. What is needed is improvement in the quality of education. Teachers should be trained adequately to impart quality lessons to the students. Dropouts from schools and colleges has to be reduced. Education has to be provided to child labour. Primary education should be comprehensive. Private universities has many problems which may be looked into. More research has to be encouraged at university level. Education is the backbone of the nation and therefore, all support is to be given to this sector. Private sector participation is quite high in cities. Their participation at district level should expand. Public and private sector should complement each other in the expansion of education facilities. Pay scales and other benefits for the teachers should be comparable to other sectors.
Meeting of the energy needs is going to be the number one challenge for the next elected govt. The power generation has been far short of requirement leading to frequent load-shedding. The short supply of gas is hampering production in existing mills and factories and power plants as well as discouraging new investments. A good number of industries set up recently could not be commissioned because of non-availability of gas. The extent of power shortage is not being felt currently due to winter. After few months, mills, factories and residents would again be subject to limitless suffering due to load-shedding. There will be long queues of vehicles before the CNG filling stations as soon as summer sets in. The coal policy should be finalised expeditiously. The prevailing situation in the energy sector is a major deterrent to economic growth. The use of coal for generating additional power appears to be the most feasible option under the present circumstances.
The new govt. has to start working on food security. They have to ensure a good boro output through taking measures to reduce prices of fertiliser and diesel because of lower international price. Work on poverty alleviation has to be intensified with priority on agriculture. Making available farm inputs at lower prices can help the rice prices to go down to some extent. Lower fertiliser prices in the international market will enable the govt. to reduce the price of fertiliser. Adequate stocks of foodgrains in govt. godowns have to be ensured for the sake of food security.
Investment will not pick up if there is persistent shortage of power and gas. This year's fall in investment is an example. Investment has to expand if growth rate is to be protected. Political stability after the election is likely to encourage investment. Absence of shutdown and violence will be helpful for attracting investment. Increase in domestic investment will facilitate foreign investment. Improvement of infrastructure facilities will be the key to investment. There are many prospective areas of investment in Bangladesh such as power, gas, coal, textiles, shipbuilding, pharmaceuticals, fertiliser and eco-friendly jute products. Board of Investment has to play a dynamic role in soliciting foreign investment.
There is uncertainty in the stock market. As the uncertainty over the national election is almost over, investors are preparing for getting healthy return after the election. Political stability after the election will be helpful for the capital market. Govt. has to take measures for further strengthening of the stock market.
Many state-owned enterprises are incurring heavy losses. Govt. has to spend a huge amount of money on those enterprises as subsidy. This is an old issue. Serious attention needs to be given to this problem. These enterprises may be privatised/liquidated/closed, depending on the situation. Resources released from these entities may be diverted to other priority development projects. In the past, govt. attitude was soft on this issue. But such an attitude has not solved the problem. Govt. can not bear the burden of sick industries.
Human resource development deserves priority. People from outside Bangladesh are being employed in our garment sector for want of trained manpower in the country. Therefore, we have to train up local people to take up job in the country. Training is also needed for those who are seeking job outside. Properly trained people can fetch more remittances for the country. The new govt. should adopt a manpower policy from the beginning. Adequate resources may be allocated for manpower development. Information Technology (IT) sector needs to be developed side by side.
The caretaker govt. has taken up a sizable safety net programme. This programme needs to be expanded to take care of all the vulnerable people. No body should be allowed to die from hunger. Monitoring implementation of the Annual Development Programme (ADP)should be given top priority by the new govt. Timely implementation of the ADP will ensure the overall growth rate of the economy. Private sector may be increasingly associated with project implementation.
Only one party has announced that they will propose a bill in parliament for banning hartal. But the two major parties did not say anything about this. If the parties returning to parliament would be able to take a decision to ban the hartal, it would be a landmark event. We keep our fingers crossed and hope to see a positive decision on this issue .Business people have been very vocal in requesting the parties for banning of hartal.
Apart from initiating action on the issues mentioned above in the first hundred days of assuming power, the newly elected govt. may consolidate the reforms introduced by the caretaker govt. The latter has taken many useful steps which need to be protected and advanced further. Reform process has to continue.
The writer is an economist and
columnist