The World Bank (WB) Wednesday said the government would face daunting task in achieving a 7.3 per cent economic growth in the next fiscal due to lack of required investment. Bangladesh needs to increase its investment by 5 per cent to achieve the GDP growth target of 7.3 per cent set at the proposed budget for the fiscal year 2014-15, it added. While assessing the budget, the multi-lateral donor agency also finds the size of the budget larger than the implementation capacity. But said it was not large enough comparing to countries at similar level of development. “The proposed budget for 2014-15 fiscal is promising. But attaining the GDP growth target is challenging under the prevailing investment scenario,” Dr Zahid Hussain, senior economist of the WB’s Dhaka office told the reporters at a media briefing on fiscal 2014-15 budget assessmentHe said, “Bangladesh will need to increase its investment by 5 per cent to achieve the economic growth target as set in the proposed budget for FY 15. A 6.5 per cent GDP growth in the next fiscal will be a great achievement considering the current situation of Bangladesh.” At present, the rate of investment in Bangladesh stands at 28.6 per cent of the GDP (Gross Domestic Product). If the country wants to achieve the budgetary target, the investment GDP ratio should be raised to 33.6 per cent, said Dr Zahid Hussain. The WB country director Johannes Zutt, however, said, Bangladesh needs peaceful political atmosphere along with stable policy to overcome the sluggish investment climate prevailing in the country.Investors are reluctant to invest in an environment where both political climate and policy is unpredictable. “So, both political and policy stability is very important to create an enabling investment climate,” he added. He also stressed the need for eliminating the bureaucratic red tape to help boosting the investment. Zutt said the businesses want the government to provide a level-playing field that enables all competitors to come to a competition and that also involves fighting corruption. “Finally, the businesses look towards the government to provide the infrastructures, businesses to prosper and thus provide jobs.”The WB country director went on saying, “Still, there’s a lot can be done in Bangladesh to improve infrastructures such as improving transportation, connectivity and energy generation.”About the proposed budget for FY 15, the Zutt said, the WB welcomes a number of attractive features of the budget adding that from fiscal perspective. The budget presents an opportunity to improve the effectiveness of public expenditures through rebalancing the composition in favour of growth. “The main challenges would be revenue mobilization, external financing to meet the budget deficit and budget implementation,” he said.He also said the World Bank Group remains a dedicated partner to the government and the people of Bangladesh as it has committed to financing eight new projects in this year totalling $ 1.9 billion compared to $ 1.56 billion last year.”The World Bank remains ready to support the government in implementation of its development programme, particularly in the areas of structural reforms and improvements,” Zutt added.About the irregularities in the public banks, especially at the BASIC Bank, Zutt said that the public commercial banks had been in a poor shape for some time in Bangladesh as there were rising number of non-performing loans.Fresh capital injections in these banks will not help much in improving their condition unless necessary reforms are in place in their governance. That governance reforms may include at the Board level. Besides, the Boards should be made accountable for any kinds of irregularities.
