Greater trade openness stressed for faster growth

Speakers at a seminar Saturday stressed greater trade openness, good governance and prioritized infrastructure development for a steady economic growth and employment generation.
The speakers came up with the suggestions at the third session on 'Trade, Aid and Infrastructure' at the seminar. Bangladesh Economists' Forum (BEF) has organized the two-day seminar on Vision 2030: A Framework for Economic Policy Making and Strategy Formulation in Pluralistic Democracy'.
Zaidi Sattar, chairman of Policy Research Institute (PRI), presented a paper on 'Challenges of Export-led growth: breaking into new markets and new products'. Country director of the IGC-Bangladesh Sultan Hafeez Rahman and former BB governor Mohammed Farashuddin presented two papers respectively on 'Making Aid work in Bangladesh: Improving Aid Mobilization and Coordination for Aid Effectiveness' and 'Infrastructure Constraints to Growth and Development'.
State Minister for Finance and Planning M A Mannan moderated the session where Mohammad Ali Taslim, Professor of Economics at Dhaka University, and Khurshid Alam, Director of PRI, spoke as designated discussants.
Zaidi Sattar, in his paper, said trade is and will be the lifeline for Bangladesh's growth, development and employment creation.
He said theory and historical evidence support the contention that Bangladesh should continue on a path of export-oriented development.
Emphasizing Bangladesh's need for trade openness, he said it frees a country like Bangladesh from the constraints of local economies. "A country which has efficiency, innovativeness, dynamism and competitiveness can cash on in trade openness," he said.
He said no matter how large the size of the domestic country, it is no match to the global economy of about $60 trillion.
"It is for this reason that even larger economies like China and India are eager to access world markets to sell their products and services which is the best way to create jobs and sustain growth at home," he said. He also stressed export diversification and market diversification for a sustainable and steady growth.
Country director of the IGC-Bangladesh Sultan Hafeez Rahman said aid in Bangladesh has been significantly misused or ineffective for lack of accountability, transparency, prioritization in selecting programmes and inefficiency.
He raised questions on use of aid in some sectors such as feasibility study in a programme by foreign donor, appointing a consultant for primary education.
He blamed lack of prioritization as government has always been leaving behind railway from the priority list of aid-supported development programmes.
Former Bangladesh Bank Governor Mohammad Farashuddin said good governance and pluralist democracy is the key to development or hindering development.
He said development in the physical infrastructure, roads, railways, ports, power and energy, telecommunications and waterwyes, bridge and so on have not been adequate to optimally facilitate the growth momentum.
"Roads sector in the country is too much powerful, and the sector hinders railway and waterway grow properly to contribute on development," he said.
Pointing on much infrastructural development in primary education sector, he said governments have put much importance on quantitative growth rather qualitative development.
He urged government to set up domestic coal-based power plant rather importing coal or fuel for producing electricity.
He also made call for stopping most valuable natural gas in non-productive sectors like domestic use.
Terming that foreign aid was detrimental to own resource allocation; Professor Mohammad Ali Taslim said Bangladesh really does not need aid now.
He urged to give more importance on domestic production and consumption using own resource rather than promoting export-led development policy.
He said there is no constant policy for all countries in the world. A country has to make its own policy on its potential and resource. Khurshid Alam said Bangladesh needs to be more open for FDI if it wants be engaged global value chain.
"Though formally Bangladeshi economy has much ideal environment for foreign direct investment, but informally there are many constraints for FDI," he added. M A Mannan said government is aware of prioritization disarray and it will be fixed gradually.
He also said government has taken initiative to complete two-lane Dhaka-Chittagong railroad in next two years replying to distinguished speakers criticism that government did not give importance on railroad.