Ex-adviser, businesses home in on economic blights
Thursday, 3 June 2010
FE Report
The country's economic growth appears to be feeble despite five per cent-plus expansion amid the global meltdown, record remittance flow and estimated food grains output, said a former caretaker government adviser Wednesday.
"We cannot become a middle-income country with the current gross domestic product growth and a sluggish investment scenario," former adviser Hossain Zillur Rahman told a seminar in the city.
He made the comments at the seminar styled 'BICF Business Confidence Survey (First Quarter 2010)' jointly organised by Dhaka Chamber of Commerce and Industry (DCCI) and Bangladesh Investment Climate Fund (BICF) at the DCCI auditorium.
Commerce minister Muhammad Faruk Khan attended the event as chief guest, while DCCI president Abul Kasem Khan and ICC Bangladesh president Mahbubur Rahman spoke.
Jamaluddin Ahmed, president of Institute of Chartered Accountants of Bangladesh, Fazlul Haque, president of Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA) and Asif Ibrahim, director of DCCI, spoke as panel discussants.
Hossain Zillur said the international community including a couple of global rating agencies has mentioned Bangladesh as one of the emerging economies with great economic potential.
"We have to exploit the potential. For this, policy constraints and discontinuity have to be corrected," he said.
"We cannot be complacent with our present achievement as our target is to turn Bangladesh into a middle-income country," he said adding that the middle-income country status, however, does not only mean achieving 1000 US dollars per capita income.
He said the country is also experiencing investment slowdown both in terms of quality and quantity. "This is not an encouraging sign," he added.
The former commerce adviser expressed concern as more investments are being made in non-productive sectors, which, according to the executive chairman of Power and Participation Research Centre (PPRC), might not contribute to long-term growth.
Mr Zillur said the number of people going abroad for jobs is also going down as Bangladesh's major labour markets like Malaysia have dried up.
Faruk Khan said the government has chosen to go for unsolicited rental power deals as the normal government procedures have failed to yield any major breakthrough on improvement of the electricity situation in the last one year.
"We have declared the energy sector as an emergency one and we have started the process to buy electricity directly," the minister said.
The cabinet committee on government purchase has already approved proposals of nine rental power plants, which would add nearly 900 megawatt of electricity in the next six to nine months.
ICC Bangladesh president Mahbubur Rahman said Bangladesh itself needs to invest in the country to pave the way for attracting more foreign direct investment.
The veteran businessman also urged the government to fix the energy situation fast and rid the Chittagong Port of politicisation to build business confidence.
"The government also needs to decide on coal as we don't have any alternative but to generate electricity from the minerals to free gas for the industries," said Mahbubur Rahman.
Abul Kasem Khan said China's competitiveness in low-cost production base would diminish very soon, creating new opportunities for investment elsewhere.
During the keynote paper presentation, Aminur Rahman of IFC-BICF said the business confidence in the country has dipped in the first quarter of 2010 due mainly to shortage of energy and utilities, increased cost of raw materials, declining demand and lack of internal funding.
The BICF survey, which was conducted among 1,512 firms, showed the number of firms having investments during the period also plunged to 34 per cent compared to 52 per cent in the last quarter of 2009.
The country's economic growth appears to be feeble despite five per cent-plus expansion amid the global meltdown, record remittance flow and estimated food grains output, said a former caretaker government adviser Wednesday.
"We cannot become a middle-income country with the current gross domestic product growth and a sluggish investment scenario," former adviser Hossain Zillur Rahman told a seminar in the city.
He made the comments at the seminar styled 'BICF Business Confidence Survey (First Quarter 2010)' jointly organised by Dhaka Chamber of Commerce and Industry (DCCI) and Bangladesh Investment Climate Fund (BICF) at the DCCI auditorium.
Commerce minister Muhammad Faruk Khan attended the event as chief guest, while DCCI president Abul Kasem Khan and ICC Bangladesh president Mahbubur Rahman spoke.
Jamaluddin Ahmed, president of Institute of Chartered Accountants of Bangladesh, Fazlul Haque, president of Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA) and Asif Ibrahim, director of DCCI, spoke as panel discussants.
Hossain Zillur said the international community including a couple of global rating agencies has mentioned Bangladesh as one of the emerging economies with great economic potential.
"We have to exploit the potential. For this, policy constraints and discontinuity have to be corrected," he said.
"We cannot be complacent with our present achievement as our target is to turn Bangladesh into a middle-income country," he said adding that the middle-income country status, however, does not only mean achieving 1000 US dollars per capita income.
He said the country is also experiencing investment slowdown both in terms of quality and quantity. "This is not an encouraging sign," he added.
The former commerce adviser expressed concern as more investments are being made in non-productive sectors, which, according to the executive chairman of Power and Participation Research Centre (PPRC), might not contribute to long-term growth.
Mr Zillur said the number of people going abroad for jobs is also going down as Bangladesh's major labour markets like Malaysia have dried up.
Faruk Khan said the government has chosen to go for unsolicited rental power deals as the normal government procedures have failed to yield any major breakthrough on improvement of the electricity situation in the last one year.
"We have declared the energy sector as an emergency one and we have started the process to buy electricity directly," the minister said.
The cabinet committee on government purchase has already approved proposals of nine rental power plants, which would add nearly 900 megawatt of electricity in the next six to nine months.
ICC Bangladesh president Mahbubur Rahman said Bangladesh itself needs to invest in the country to pave the way for attracting more foreign direct investment.
The veteran businessman also urged the government to fix the energy situation fast and rid the Chittagong Port of politicisation to build business confidence.
"The government also needs to decide on coal as we don't have any alternative but to generate electricity from the minerals to free gas for the industries," said Mahbubur Rahman.
Abul Kasem Khan said China's competitiveness in low-cost production base would diminish very soon, creating new opportunities for investment elsewhere.
During the keynote paper presentation, Aminur Rahman of IFC-BICF said the business confidence in the country has dipped in the first quarter of 2010 due mainly to shortage of energy and utilities, increased cost of raw materials, declining demand and lack of internal funding.
The BICF survey, which was conducted among 1,512 firms, showed the number of firms having investments during the period also plunged to 34 per cent compared to 52 per cent in the last quarter of 2009.