Growth prospects linked to infrastructures
Saturday, 27 December 2008
BANGLADESH has had some notable successes in reducing its poverty from maintaining a steady growth rate of 5.0 per cent or above during the last decade and the present one. In the last two years, this growth rate, according to official figures, even surpassed 6.0 per cent. The target has been set under the national budget for fiscal 2008-09, for attaining a 6.5 per cent growth rate of the country's gross domestic product (GDP). This projection, however, is considered as overambitious in a recent report of the World Bank (WB). The WB forecast is that growth could be squeezed to 5.4 per cent or at least one per cent lower than the officially projected rate in the current fiscal year as the global economic downturn also starts affecting Bangladesh. The Bangladesh Bank has not agreed with this assessment by the WB, while reiterating its optimism that the growth target would be achieved, citing the present positive indicators of the macro-economy. All concerned would like to share the optimism of the country's central bank.
There is no denying here of the imperative for making concerted efforts in a synergy for maintaining and accelerating the pace of the growth performance of the GDP which must be at the centre of all economic aspirations in a country like Bangladesh. However, none can completely rule out the possibility of shrinking growth during the current fiscal if policies are not taken in time and pursued efficiently in the view of the changing circumstances. The end of the tenure of the present government is very near. It would be left to the new elected government to have its operational programme of action ready from its first weeks in office to cope with the volatile economic situation externally and maintain the desirable economic growth.
No doubt, the new government will have to put a premium on boosting vital energy supply at the fastest as a sort of fulfilling a major precondition for potential investors to invest in the economy which would, in turn, help create the economic growth. But it should be grasped early in the day by the elected government that only all-out efforts to improve energy supply will not lead to economic growth. Side by side, steps will have to be taken urgently to add to growth promoting infrastructures and adding to capacities and performance of existing ones.
The caretaker government has to its credit the bringing about of significant improvements in the operation of the Chittagong port. The port's better conditions have been a stimulus to businesses in general specially for the export-oriented industries. The new government will have to ensure that the existing efficiency of this vital infrastructure not only continues but is also further improved under their keen guidance. The port's capacities and supportive structures -- inland terminals, container depots etc. -- will have to be expanded. Then, the proposed expressway between the strategic Dhaka-Chittagong corridor should be built in record time by the incoming government to help the competitiveness of business by shortening lead time in their export-import operations. There are plans to expand and improve conditions in the export processing zones (EPZs) and to set up special economic zones (SEZs). The EPZs in recent years have particularly proved to be very useful in attracting particularly foreign investments. New EPZs and SEZs are on the cards. The construction of such new zones with the advanced infrastructures must be aimed for completion at an early date to increase the net of investments, both local and foreign. Roads, airports and other infrastructures are needed to be set up in different parts of the country.
In sum, the coming elected government will have to do many things to create and maintain a business-friendly environment to be successful in wooing more economic growth promoting activities. But these things will have to be accomplished in a coordinated manner with an emphasis put on infrastructural development. Hence, the government that will be formed on the basis of the verdict of the people in next Monday's general election will need to put in extraordinary efforts for ensuring appropriate quality investments in infrastructures and strengthening the related support facilities that are vital for harnessing the growth potential of the economy in full.
There is no denying here of the imperative for making concerted efforts in a synergy for maintaining and accelerating the pace of the growth performance of the GDP which must be at the centre of all economic aspirations in a country like Bangladesh. However, none can completely rule out the possibility of shrinking growth during the current fiscal if policies are not taken in time and pursued efficiently in the view of the changing circumstances. The end of the tenure of the present government is very near. It would be left to the new elected government to have its operational programme of action ready from its first weeks in office to cope with the volatile economic situation externally and maintain the desirable economic growth.
No doubt, the new government will have to put a premium on boosting vital energy supply at the fastest as a sort of fulfilling a major precondition for potential investors to invest in the economy which would, in turn, help create the economic growth. But it should be grasped early in the day by the elected government that only all-out efforts to improve energy supply will not lead to economic growth. Side by side, steps will have to be taken urgently to add to growth promoting infrastructures and adding to capacities and performance of existing ones.
The caretaker government has to its credit the bringing about of significant improvements in the operation of the Chittagong port. The port's better conditions have been a stimulus to businesses in general specially for the export-oriented industries. The new government will have to ensure that the existing efficiency of this vital infrastructure not only continues but is also further improved under their keen guidance. The port's capacities and supportive structures -- inland terminals, container depots etc. -- will have to be expanded. Then, the proposed expressway between the strategic Dhaka-Chittagong corridor should be built in record time by the incoming government to help the competitiveness of business by shortening lead time in their export-import operations. There are plans to expand and improve conditions in the export processing zones (EPZs) and to set up special economic zones (SEZs). The EPZs in recent years have particularly proved to be very useful in attracting particularly foreign investments. New EPZs and SEZs are on the cards. The construction of such new zones with the advanced infrastructures must be aimed for completion at an early date to increase the net of investments, both local and foreign. Roads, airports and other infrastructures are needed to be set up in different parts of the country.
In sum, the coming elected government will have to do many things to create and maintain a business-friendly environment to be successful in wooing more economic growth promoting activities. But these things will have to be accomplished in a coordinated manner with an emphasis put on infrastructural development. Hence, the government that will be formed on the basis of the verdict of the people in next Monday's general election will need to put in extraordinary efforts for ensuring appropriate quality investments in infrastructures and strengthening the related support facilities that are vital for harnessing the growth potential of the economy in full.