Second PRSP targets massive private sector investment
FHM Humayan Kabir | Wednesday, 6 August 2008
The second Poverty Reduction Strategy Paper (PRSP) spanning three years from FY09 will target a Tk4508.5 billion (US$65.7 billions) investment from private sector, singling it out as the main driver of growth, an official said Tuesday.
The PRSP-the government's main development plan - sets the ambitious target after the planning ministry said some 80 per cent of the country's Gross Domestic Products (GDP) and 90 per cent of the employment are now generated by the private sectors.
"The private sector is now the sole engine of our economic growth. The second PRSP will just reflect that reality," said a top planning ministry official.
"The PRSP has set a massive target as we expect it to make at least 82 percent of the total projected investment in the three years. We believe the sectors will continue to grow at a hefty pace despite some bottlenecks," he added.
Officials said the target is at least 60 per cent increase on the investment achieved in the first PRSP, which ended in FY08 and when the economy grew more than six percent a year.
The PRSP has formulated at the behest of the country's development partners, mainly the World Bank, which wants the country to adopt its only development plan, instead of being forced upon by the donors.
At the end of the first PRSP, the government has estimated that now 77 per cent of the country's investment, 93 per cent of domestic savings, 74 per cent of consumption expenditure and 72 per cent of domestic credit come from the private sectors.
Officials said during the next PRSP period, the private sector is expected to invest Tk1196.3 billion in the FY09, Tk1515.2 billion in FY10 and Tk1797 billion in FY2011.
The planning ministry has already prepared a draft PRSP, which is likely to be finalised within this month, the ministry official said.
The draft PRSP in its medium term macroeconomic framework (MTMF) projected public sector investment of TK 964.9 billion--- or just 18 per cent of the total investment projected in the three years to FY11.
The official said in the PRSP the government would stress adopting private-sector-friendly policies.
"Governance, infrastructure, inefficient and costly financial intermediation and credit, underdeveloped capital market and trade facilitation shortfalls will get top priorities in the second PRSP," he added.
"The legal and regulatory framework would be streamlined like never before in an effort to boost private sector growth," he said.
Quoting the draft PRSP the official said private investment in the agriculture would be promoted through enhanced public expenditure on agricultural research and extension services and rural marketing infrastructure.
"Creating a level playing field for all the private sector players will be a key priority area. The government will introduce polices to stem monopolistic or oligopolistic behavior in production," the official said.
The PRSP-the government's main development plan - sets the ambitious target after the planning ministry said some 80 per cent of the country's Gross Domestic Products (GDP) and 90 per cent of the employment are now generated by the private sectors.
"The private sector is now the sole engine of our economic growth. The second PRSP will just reflect that reality," said a top planning ministry official.
"The PRSP has set a massive target as we expect it to make at least 82 percent of the total projected investment in the three years. We believe the sectors will continue to grow at a hefty pace despite some bottlenecks," he added.
Officials said the target is at least 60 per cent increase on the investment achieved in the first PRSP, which ended in FY08 and when the economy grew more than six percent a year.
The PRSP has formulated at the behest of the country's development partners, mainly the World Bank, which wants the country to adopt its only development plan, instead of being forced upon by the donors.
At the end of the first PRSP, the government has estimated that now 77 per cent of the country's investment, 93 per cent of domestic savings, 74 per cent of consumption expenditure and 72 per cent of domestic credit come from the private sectors.
Officials said during the next PRSP period, the private sector is expected to invest Tk1196.3 billion in the FY09, Tk1515.2 billion in FY10 and Tk1797 billion in FY2011.
The planning ministry has already prepared a draft PRSP, which is likely to be finalised within this month, the ministry official said.
The draft PRSP in its medium term macroeconomic framework (MTMF) projected public sector investment of TK 964.9 billion--- or just 18 per cent of the total investment projected in the three years to FY11.
The official said in the PRSP the government would stress adopting private-sector-friendly policies.
"Governance, infrastructure, inefficient and costly financial intermediation and credit, underdeveloped capital market and trade facilitation shortfalls will get top priorities in the second PRSP," he added.
"The legal and regulatory framework would be streamlined like never before in an effort to boost private sector growth," he said.
Quoting the draft PRSP the official said private investment in the agriculture would be promoted through enhanced public expenditure on agricultural research and extension services and rural marketing infrastructure.
"Creating a level playing field for all the private sector players will be a key priority area. The government will introduce polices to stem monopolistic or oligopolistic behavior in production," the official said.