Abu Sazzad :Political instability had played the major hindrance to achieve the projected GDP growth target of all the six Five-Year Plans (FYPs) of the government since 1973. Inefficient institutions and their lack of democratic practices were behind the non-fulfillment of achieving the targeted GDP growth, said a joint keynote paper.Renowned economists Dr Sadiq Ahmed, Dr Mohiuddin Alamgir and Dr Kamal Mujeri prepared the keynote paper for the second Bangladesh Economic Forum (BEF) conference held at the Bangladesh Bank Training Academy recently.According to the economists, the theme of the forthcoming seventh Five-year Plan is to “Accelerating Growth, Empowering Citizens.” The implementation of the plan will begin from next year and will go on until 2020.Under the plan, the average growth rate is projected at 7.4 per cent over the seventh plan period. The FYP will seek to raise the GDP growth rate progressively from 6.5 per cent in FY2015 to 8 per cent by FY2020.It is estimated that some 12.9 million additional jobs will be available during the five years of the seventh FYP, including 2 million jobs abroad for migrant workers. Again, the FYP seeks to reduce poverty rate from 24.8 per cent to 18.6 per cent and extreme poverty to around 8.9 per cent by FY2020.Total investment over these five years will amount to Tk. 31.9 trillion. The private sector will continue to play its dominant role, accounting for 77.3 per cent of total planned investment.The aim of the plan is to empower people with more employment and skill development opportunities, supply credit for SME development and introduce ways to make people more productive.Along with growth, the plan will emphasize social protection, urban transition and a sustainable development pathway resilient to disaster and climate change.Former Bangladesh Bank Governor Dr Mohammad Farasuddin told The New Nation recently that the next plan should focus on equity and social protection in addition to accelerating growth. “We will not be able to empower every citizen, but we will be able to provide them with social protection.”He questioned credibility of the data on employment, and believed their number would be much higher than the official estimation of 4.5 per cent.”We will have to reduce poverty through creation of jobs, as the trickle-down theory is a thing of the past. Emphasis has to be placed on micro, small and medium enterprises.”Farasuddin said achieving a middle-income country status should be driven by performance in the Human Development Index, not by that of per capita income. “Becoming a middle income country on the basis of per capital income is misleading.”The keynote paper added: “The Planning Commission produced the country’s first Five- Year Plan (1973-78) under the leadership of Professor Nurul Islam. Unfortunately, implementation suffered from extremely fragile institutions, the huge challenge of building up a war ravaged economy, weak administrative capacities, inadequate resources and political turmoil. The average GDP growth target of the plan period was 5.5 per cent, but actually achievement was 4 per cent.The second Five-Year Plan (1980-85) was grounded in a sound macroeconomic model but political uncertainties doomed it to failure. The average GDP growth target of plan was 5.4 per cent, but actually achievement 3.8 per cent only.The third Five-Year Plan (1985-90) was formulated with a strong infrastructure focus. Implementation was mixed because of political uncertainties. Political instability was a constant threat to planned development until democracy was restored in 1991. Natural disaster was also a factor. The average GDP growth target of the plan period was 5.4 per cent but actually achievement was 3.8 per cent.The fourth Five-Year Plan (1990-1995) focused on poverty alleviation and meeting the basic needs of the people. Defining strategies were human resources development, women in development and environmental sustainability. But failure of political institutions played into under performance of the first four plans with the realize growth rates well bellow the projected. However, the performance of the economy was better under the fourth plan than the earlier plans. The plan witnessed a shift in the economic structure of away from agriculture towards industry and services. The average GDP growth target of the period was 5 per cent but actually achieved 4.2 per cent.The fifth Five-Year Plan (1997-2002) was a bold plan of the day calling for seven per cent growth rate of GDP. The private sector was envisaged to play a dominant role accounting for 56 per cent of total investment. Increasing globalization meant greater emphasis on the private sector with appropriate role for the public sector and facilitating government intervention. The average GDP growth target of the plan period was 7.1 per cent but actually achieved 5.1 per cent.According to the economists, the average GDP growth target of latest sixth Five-Year Plan (2011-15) was 7.3 per cent but actually the country achieved 6.3 per cent. Internal and external uncertainties, high interest rate and high inflation made the planned projections a nightmare, they added. However, the sixth plan period was a major institutional shift in making the private sector the engine of growth raising productivity and employment. The institutional and policy focus was on augmenting factors of production to achieve the desired growth rate within the framework of Vision 2021. Improving governance was recognized as a pillar of success.
