Bangladesh economy has trodden a path in recent years that has yielded positive results, in spite of scepticism from the Jeremiads. The progress registered has been slow no doubt given the odds against which it has had to contend with but results achieved have not been tardy in coming. Rather than being erratic the posting of growth has been steady and established an upward trend, albeit modestly.
Take the case of the growth of gross domestic product (GDP). Though cynics scoffed at the phenomenon of GDP having been stuck at little over 6.0 per cent annually for over the past decade, the fact that it has not slipped below 6.0 in spite of headwinds coming from without bears testimony to its resilience and tenacity to hold the ground. Because of this unflinching record policymakers have been emboldened to aim at higher projection of GDP growth. This has been panned as overambitious and a pipe dream by nay-sayers and dubious by doubting Thomases of conservative leaning. Yet policymakers confident of the inherent strength of the economy have not only projceted growth above 7.0 per cent but have actually claimed achievement of the same.
The World Bank and the Asian Development Bank (ADB) have not been so optimistic about the rate of growth of Bangladesh GDP. Their forecast had not crossed the 'sound barrier' of 6.5 per cent. Lately, there has been a sort of change of heart (forecast) by one of them, ADB, which has become convinced that Bangladesh economy is now on the cusp of a transition to a higher growth path. According to news released on Sepetember 27, the ADB estimated Bangladesh's economic growth at 7.1 per cent for fiscal 2015-2016. Engendering almost a triumphalist feeling, this projection is higher than the Goverment's estimate. Bangladesh Bureau of Statistics (BBS) forecast the country's economic growth at 7.05 per cent for the year while the previous estimate by ADB was 6.7 per cent. Growth in fiscal 2016 exceeded expectations and sustained consumption continued to be the mainstay of growth.
However, the GDP growth forecast is dependent on sume prerequisites like sustained improved private investment, timely completion of key infrastructure projects and continued political stability. Apart from the last factor, the first two can be relied to vindicate the optimistic forecast for 2016-17, even though ADB is not too certain about it in spite of the momentum gained by them. Industrial growth projected two edge up to 10.2 per cent has no reason to falter as domestic demand is strong and the enabling environment is improving. Agriculture can be expected to overcome the obstacles of low prices as its products are being diversified for different markets ensuring a healthy growth rate above the present 2.4 per cent as predicted in the ADB report. The services sector's growth projected at lower than 6.3 per cent does not square with ADB's recent finding that this sector contributes the highest to GDP. All these indicate that while ADB's projection of GDP growth for 2015-16 at 7.1 per cent is realistic, the same for 2016-17 at 6.9 per cent does not accord with the recent trend.
The ADB having given a scorecard on the performance of Bangladesh's economy for 2015-16 it now remains to be seen whether the World Bank follows it on the heels with similar positive update. Working in tandem, as the duo do, their projections cannot be widely divergent. World Bank's last projection put the growth rate at 6.8 per cent. The economic outlook has changed since then calling for a revision of figures.
The International Monetary Fund (IMF), another important multilateral institution engaged in the business of making forecasts of global and individual country's economic growth, has projected that Bangladesh's economy will grow by 6.9 per cent this fical year despite the subdued global growth. The IMF's projcetion published in the World Economic Outlook on October 04 matches ADB's projection and falls little short of the target fixted by the Government of Bangladesh (7.2 per cent).
The Government of Bangladesh has already announced that last year GDP growth posted 7.05 per cent and based on this has fixed 7.2 per cent for the current fiscal. ADB's projection of a higher growth rate (7.1 per cent) for the past fiscal provides the basis for expectation that the modest rise in growth of GDP for 2016-2017 can be reached if investment and consumption levels are on an even keel. The greatest strength of the conomy, rising exports of garments and incresing volume of remittance will be sustained in future, rooted as they are in lower priced goods and low-wage employment respectively.
A piece of good news has come from the World Bank in its report on Bangladesh Development Update released on October 03. The report has observed that Bangladesh has done an impressive job in reducing poverty over the last decades and has the potential to end extreme poverty by 2030. According to the report, under the new $ 1.90 poverty line based on 2011 purchasing power, 28 million or 18.5 per cent of Bangladeshis lived in extreme poverty in 2010. More than 16 million people have graduated from extreme poverty between 2000 to 2010. About proverty reduction in Bangaldesh the World Bank President said recently, "many developing countries in the world can learn important lessons from Bangladesh to reduce extreme poverty and to promote sustainable development".
Two new reports, the Bangladesh Development Update and Shared Prosperity 2016 find that Bangladesh is making sustained progress in poverty reduction and increasing opportunities. To move to the next level and realise its goal of becoming a middle-income country by 2021 and overcoming extreme poverty by 2030, the country needs to sustain its economic and remittances growth, create more and better infrastructure and improving the quality of health and education. But the two new reports also acknowledge that the fruit of Bangladesh's development experience in innovation such as conditional cash transfers, gender equity in education, and successful family planning is being reflected in its notable reduction of poverty and improvemet in the lives of its citizens.
The growth in GDP and poverty reduction are related and in both respects the present efforts and programmes need to be continued. Whatever is being done by the government the private sector is promoting both the goals. So the conomy is on right track and what is needed now is to add more momentum.
This celebration of Bangladesh conomy can be rounded up with another piece of good news. It is not whopping in nature but morale boosting nevertheless. Accouning to the 2016-17 Report of the World Economic Forum (WEF), Bangladesh has moved up one step in the Global Competitiveness ranking. It now ranks 106th among 138 countries this year. The overall score, too, has improved. It was up by 1.06 per cent, from last year's 3.76 to 3.80. Though much remains to be done to improve the problematic factors like corruption, limited access to financing and inefficient governance, the minuscule progress made over the past year gives hope that the momentum for improving global compatitiveness will not falter.
hasnat.hye5@gmail.com
News to cheer Bangladesh economy
Hasnat Abdul Hye | Published: October 10, 2016 00:00:00 | Updated: February 01, 2018 00:00:00
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