Govt seeks more soft loan for import financing

The development partners Sunday advanced a six-point suggestion aimed at strengthening the Sixth Five-Year Plan (SFYP) of the country, reports UNB. The suggestions include efforts to increased domestic revenue mobilisation and improve the quality and quantity of public investment. They also suggested the government to focus on updating the Plan as less favourable external environment is contributing to balance of payments and inflationary pressures. The development partners also stressed on better public service delivery and strengthening of the public financial management systems, including oversight functions. The suggestions were made at a consultation meeting the development partners and donors had with the government at the NEC conference hall. Finance Minister AMA Muhith, PM's Economic Affairs Adviser Dr. Mashiur Rahman and development partners including World Bank Country Director Ellen Goldstein and ambassadors of some countries attended the meeting chaired by Planning Minister AK Khandker. Briefing the reporters after the meeting planning minister said that the donors have lauded the draft document and put forward a six-point suggestion for consideration. "After studying it, we will discuss it among ourselves. Then we will decide whether we can take something from their suggestions," he added. General Economics Division (GED) member Prof Shamsul Alam said that the government has sought more foreign aid in the meeting for import financing to help curb the growing inflation. "We have asked the development partners to provide more soft credits for different purposes including import financing to help curb inflation," he added. The suggestions are linked to analysis and aspirations more directly to actions, resources, targets, indicators and milestones. Those also articulate a more holistic approach to strengthening governance with specific strategies in key areas, update the macroeconomic framework to reflect emerging external pressures and underscore priorities for public financial management. The sixth five-year plan will be finalized by June next but it would have a retrospective effect from 2010-11. The plan envisages GDP growth of 7.3 per cent on an average, poverty reduction by 10 per cent, increase in share of industrial employment from 17 per cent to 25 per cent and increase in contribution of industrial productivity to 10 per cent to the GDP. The total investment under the plan would amount to Tk 13.3 trillion at constant 201011 prices and much of the investment will come from the private sector, accounting for 78 per cent of the total investment. External financing for private investment, primarily in the form of foreign direct investment (FDI) is expected to grow, but will still remain very small in relative term at about 3.4 percent. Public sector investment, much of it through the Annual Development Programme (ADP), will amount to Tk 3 trillion in constant 201011 prices, accounting for about 22 per cent of the total investment in the economy.