Investment rate needs to be raised to 5pc: WB
Tuesday, 30 October 2007
FHM Humayan Kabir
Bangladesh will need to increase the existing investment rate to 5.0 percentage points, relying on higher domestic saving, a World Bank (WB) policy paper said.
In order to achieve this, three mutually reinforcing long-term transitions -- shift in the economic structure to labour-intensive manufacturing from agriculture, liberalisation of trade and spurring export competitiveness and diverting the urbanisation from the capital to other cities -- must be ensured, the paper noted.
At a discussion with the government in the city Monday, a Senior Economist of the World Bank, Sandeep Mahajan, expressed such views through a presentation from a newly prepared WB policy paper on "Bangladesh: Strategy for Sustained Growth".
Secretary of Economic Relations Division (ERD), M Aminul Islam Bhuiyan, Country Director of the World Bank Bangladesh office, Xian Zhu, and senior officials from all the ministries in the government and the World Bank Dhaka office attended the discussion.
Bangladesh can become a middle-income country (MIC) before or by the year 2016 if its GDP (gross domestic product) growth is increased to 7.5 per cent a year, the WB policy paper viewed.
Expressing optimism, the Washington-based donor further stated that though there are some challenges, some factors including an impressive growth record since 1990, sound economic fundamentals with many first-generation reforms in place, a young labour force, establishing of entrepreneurial culture and substantial improvements in human resource development had made the country optimistic to emerge as an MIC country.
Quoting from the strategy paper, Sandeep Mahajan said Bangladesh would need to employ its resources, both labour and capital, much more productively to sustain rapid growth performance of its, a government official who attended the discussion meeting told the FE.
The global lender treated Bangladesh as a low-income country for its per capita gross national income (GNI) of US$470 in 2005. The Bank's threshold for qualifying for MIC status was $870 in 2005.
Quoting from the policy paper, Mahajan in his presentation said Bangladesh needs to give attention to its burgeoning energy supply constraints that undercut productivity, limited access to foreign direct investment (FDI) in the manufacturing sector, presence of anti-export bias, skill deficiencies among workers and officials, limited economy-based knowledge and weak law and order situation.
Besides, the WB economist suggested to improve the country's trade liberalisation, boost export competitiveness and diversify the export base, make the port more efficient and remove the bottlenecks at customs and other offices related to shipping and connectivity with the hinterland.
Bangladesh will need to increase the existing investment rate to 5.0 percentage points, relying on higher domestic saving, a World Bank (WB) policy paper said.
In order to achieve this, three mutually reinforcing long-term transitions -- shift in the economic structure to labour-intensive manufacturing from agriculture, liberalisation of trade and spurring export competitiveness and diverting the urbanisation from the capital to other cities -- must be ensured, the paper noted.
At a discussion with the government in the city Monday, a Senior Economist of the World Bank, Sandeep Mahajan, expressed such views through a presentation from a newly prepared WB policy paper on "Bangladesh: Strategy for Sustained Growth".
Secretary of Economic Relations Division (ERD), M Aminul Islam Bhuiyan, Country Director of the World Bank Bangladesh office, Xian Zhu, and senior officials from all the ministries in the government and the World Bank Dhaka office attended the discussion.
Bangladesh can become a middle-income country (MIC) before or by the year 2016 if its GDP (gross domestic product) growth is increased to 7.5 per cent a year, the WB policy paper viewed.
Expressing optimism, the Washington-based donor further stated that though there are some challenges, some factors including an impressive growth record since 1990, sound economic fundamentals with many first-generation reforms in place, a young labour force, establishing of entrepreneurial culture and substantial improvements in human resource development had made the country optimistic to emerge as an MIC country.
Quoting from the strategy paper, Sandeep Mahajan said Bangladesh would need to employ its resources, both labour and capital, much more productively to sustain rapid growth performance of its, a government official who attended the discussion meeting told the FE.
The global lender treated Bangladesh as a low-income country for its per capita gross national income (GNI) of US$470 in 2005. The Bank's threshold for qualifying for MIC status was $870 in 2005.
Quoting from the policy paper, Mahajan in his presentation said Bangladesh needs to give attention to its burgeoning energy supply constraints that undercut productivity, limited access to foreign direct investment (FDI) in the manufacturing sector, presence of anti-export bias, skill deficiencies among workers and officials, limited economy-based knowledge and weak law and order situation.
Besides, the WB economist suggested to improve the country's trade liberalisation, boost export competitiveness and diversify the export base, make the port more efficient and remove the bottlenecks at customs and other offices related to shipping and connectivity with the hinterland.