Infrastructure dev, skill upgradation main challenges, say economists
Sunday, 27 June 2010
FE Report
Discussants at a workshop on Saturday in the city, with its theme -- 'Lessons from the Crisis and Prospects of Inclusive Growth' -- stressed the need for putting the primodal thrust on infrastructural development and human skill upgradation for sustained growth of the Bangladesh economy, alongwith efforts for strengthening social protection.
Organised by Economic Research Group (ERG) -- an organisation that aims to extend the frontiers for knowledge on developing economics, the workshop was chaired by noted economist Prof Wahiuddin Mahmud.
Held at a city hotel, the participants in the seminar included, among others, former Finance Adviser Dr. Mirza Azizul Islam, Prof. M. Ali Taslim of Foreign Trade Institute, Dr. Ahsan Mansur of Policy Research Institute, Dr. Mostafizur Rahman of Centre for Policy Dialogue, Dr. Mohammed Tareque, Finance Secretary, Dr. Zahid Hossain of the World Bank, Dr. Sajjid Zohir, Director, ERG, and Dr. M.K. Mujeri of Bangladesh Institute of Development
Studies.
Dr. SAM Nuruzzaman of UN ESCAP welcomed the participants in the workshop.
The discussions in the workshop centred on the UN-ESCAP's 2010 report on Sustaining Recovery and Dynamism for Inclusive Development.
The selected group of participants in the workshop shed light particularly on two broad issues - 'lessons from the global economic crisis and policy responses' and 'prospects of internally-driven and inclusive growth in Bangladesh.'
Three main presentations were made at the workshop by Dr. Mirza Azizul Islam, Prof. M.A. Taslim and Dr. Sajjad Zohir.
The participants broadly agreed that the findings of the UN ESCAP's 2010 report do largely hold true for the relatively high performing economies in the region. The specific circumstances and pecularities of the relatively smaller and low income countries like Bangladesh do need to be carefully taken into consideration while examining the relevance of the suggestions made in that report to the context of such countries, they noted.
They were broadly unanimous in their view that "if a country already has a high level of domestic consumption, policies aimed at increasing further would cause a reduction in saving. This, in turn, would most likely reduce investment which is a basic prerequisite for accelerating economic growth," they noted.
The participants largely endorsed the view that any substantial effort to refocus on domestic demand in Bangladesh at this stage of its economic growth would not serve much of any useful purpose, in view of its low-level of per capita income, high consumption/gross domestic product (GDP) ratio, virtual total dependence on import of capital goods as well as most of the raw materials and intermediate goods, low export/GDP ratio, high negative export/GDP ratio, high consumption/GDP ratio etc.
About Bangladesh's export performance, the discussants highlighted the need on the part of exporters to find, at this stage, the ways for raising productivity in areas other than 'exploiting cheap labour'. 'The erstwhile comparative advantage of the country's apparel exporters in areas of cheap labour might have been stretched too far and could be under threat.' They broadly agreed with this contention made by Prof. Taslim in his key-note presentation.
For strengthening comparative advantage, the participants called for hard efforts under the present circumstances for technical innovations and skill up-gradation, without which export performance of the apparel sector might deteriorate in the coming days.
The participants in the workshop underlined the need for more coordinated endeavours by the ministry of finance and the Bangladesh Bank for better convergence of fiscal and monetary policies to confront the looming threat of inflation.
They identified educational skill as the most important source of productivity growth in Bangladesh and made strong pleas for raising the skill force of the population through sustained efforts to improve the quality and standard of education.
Concerns were also expressed by a number of participants over the sustainability of future growth of remittance earnings which recorded a remarkable increase in past couple of years. The decline in the number of new overseas job opportunities for Bangladeshis at abroad calls for drawing up an effective strategy to help reopening of the overseas job market, they pointed out.
About some specific suggestions made in the UN ESCAP's report 2010, the participants said Bangladesh has already been implementing the same, particularly in areas of strengthening social protection, promoting agriculture and rural development, supporting new engines of green growth and enhancing financial inclusion. However, there is now a grater need, they added, for strengthening such measures in the interest of promoting equity, poverty alleviation and environment sustenance.
They identified raising the level of investment as the major challenge to accelerated growth performance of the economy while noting poor infrastructure, especially gas shortages and frequent electricity outages, as the key constraints in this connection.
Discussants at a workshop on Saturday in the city, with its theme -- 'Lessons from the Crisis and Prospects of Inclusive Growth' -- stressed the need for putting the primodal thrust on infrastructural development and human skill upgradation for sustained growth of the Bangladesh economy, alongwith efforts for strengthening social protection.
Organised by Economic Research Group (ERG) -- an organisation that aims to extend the frontiers for knowledge on developing economics, the workshop was chaired by noted economist Prof Wahiuddin Mahmud.
Held at a city hotel, the participants in the seminar included, among others, former Finance Adviser Dr. Mirza Azizul Islam, Prof. M. Ali Taslim of Foreign Trade Institute, Dr. Ahsan Mansur of Policy Research Institute, Dr. Mostafizur Rahman of Centre for Policy Dialogue, Dr. Mohammed Tareque, Finance Secretary, Dr. Zahid Hossain of the World Bank, Dr. Sajjid Zohir, Director, ERG, and Dr. M.K. Mujeri of Bangladesh Institute of Development
Studies.
Dr. SAM Nuruzzaman of UN ESCAP welcomed the participants in the workshop.
The discussions in the workshop centred on the UN-ESCAP's 2010 report on Sustaining Recovery and Dynamism for Inclusive Development.
The selected group of participants in the workshop shed light particularly on two broad issues - 'lessons from the global economic crisis and policy responses' and 'prospects of internally-driven and inclusive growth in Bangladesh.'
Three main presentations were made at the workshop by Dr. Mirza Azizul Islam, Prof. M.A. Taslim and Dr. Sajjad Zohir.
The participants broadly agreed that the findings of the UN ESCAP's 2010 report do largely hold true for the relatively high performing economies in the region. The specific circumstances and pecularities of the relatively smaller and low income countries like Bangladesh do need to be carefully taken into consideration while examining the relevance of the suggestions made in that report to the context of such countries, they noted.
They were broadly unanimous in their view that "if a country already has a high level of domestic consumption, policies aimed at increasing further would cause a reduction in saving. This, in turn, would most likely reduce investment which is a basic prerequisite for accelerating economic growth," they noted.
The participants largely endorsed the view that any substantial effort to refocus on domestic demand in Bangladesh at this stage of its economic growth would not serve much of any useful purpose, in view of its low-level of per capita income, high consumption/gross domestic product (GDP) ratio, virtual total dependence on import of capital goods as well as most of the raw materials and intermediate goods, low export/GDP ratio, high negative export/GDP ratio, high consumption/GDP ratio etc.
About Bangladesh's export performance, the discussants highlighted the need on the part of exporters to find, at this stage, the ways for raising productivity in areas other than 'exploiting cheap labour'. 'The erstwhile comparative advantage of the country's apparel exporters in areas of cheap labour might have been stretched too far and could be under threat.' They broadly agreed with this contention made by Prof. Taslim in his key-note presentation.
For strengthening comparative advantage, the participants called for hard efforts under the present circumstances for technical innovations and skill up-gradation, without which export performance of the apparel sector might deteriorate in the coming days.
The participants in the workshop underlined the need for more coordinated endeavours by the ministry of finance and the Bangladesh Bank for better convergence of fiscal and monetary policies to confront the looming threat of inflation.
They identified educational skill as the most important source of productivity growth in Bangladesh and made strong pleas for raising the skill force of the population through sustained efforts to improve the quality and standard of education.
Concerns were also expressed by a number of participants over the sustainability of future growth of remittance earnings which recorded a remarkable increase in past couple of years. The decline in the number of new overseas job opportunities for Bangladeshis at abroad calls for drawing up an effective strategy to help reopening of the overseas job market, they pointed out.
About some specific suggestions made in the UN ESCAP's report 2010, the participants said Bangladesh has already been implementing the same, particularly in areas of strengthening social protection, promoting agriculture and rural development, supporting new engines of green growth and enhancing financial inclusion. However, there is now a grater need, they added, for strengthening such measures in the interest of promoting equity, poverty alleviation and environment sustenance.
They identified raising the level of investment as the major challenge to accelerated growth performance of the economy while noting poor infrastructure, especially gas shortages and frequent electricity outages, as the key constraints in this connection.