Kazi Zahidul Hasan :
With private sector investment failing to pick up due to high cost of doing business, energy crisis and scarcity of industrial plots, the proposed budget for the fiscal 2016-17 lacks measures to address these critical issues, creating further uncertainty over the country’s investment climate.
Economists and entrepreneurs on Monday come up with the observation while giving their budget reactions to The New Nation.
“The proposed budget lacks measures to promote and facility ate private investment. It does not also address the concern of the investors which is vital to improve sluggish investment climate,” Dr AB Mirza Azizul Islam, a noted economist of the country told The New Nation yesterday. According to him, the proposed budget mainly focused on revenue collection by increasing tax burden on the taxpayers, ignoring the issue of investment promotion, a pre-condition to achieving inclusive economic growth.
Mirza Aziz said Bangladesh needs huge investment to accelerate GDP growth in line with the Seventh Fifth Year Plan. To attain such a growth we must give a ‘big push’ on private investment eliminating all constraints behind it.
“The government should adopt policies to remove the existing constraints behind the investment and such policies should be reflected on the proposed budget,” he said, adding, “Measures should be there to promote and facilitate investment, ease of doing business and reforms in tax and energy pricing.”
“Only such measures help accelerate investment and encourage the investors,” added the economist.
“The Finance Minister, in his budget proposals, gives more push to public investment through increased allocations in various sectors, including infrastructure and communications. But he did not outline the plan how to accelerate private investment which is vital to economic growth and job creation,’ Mahmudur Rahman Sumon, one of the leading textile entrepreneurs of the country, told The New Nation yesterday. He said private investment remains stagnant (22 per cent of GDP) for the last couple of years which is a matter of concern. Poor private investment has badly affected economic activities, industrialization and job creation.
The reasons behind the sluggish investment are high cost of doing business, gas and electricity crisis, inadequate infrastructure, political instability, inefficiency of the government agencies and non-availability of industrial plots, he mentioned.
Mahmudur Rahman Sumon, also the Secretary General of Bangladesh-Grecce Chamber of Commerce and Industry, said the Finance Minister may think that allocating more funds to the infrastructure sectors may give a fresh boost to private investment. But this may not happen unless the above mentioned issues are settled.
“Private investment is playing a major role in economic growth as well as job creation. So, the government must take proactive measures to encourage the entrepreneurs as well as boost domestic investment,” he added. “Bangladesh economy remained strong and resilient despite external and internal challenges. It achieved 6 plus per cent growth in the last few years braving all odds. But the growth is not satisfactory if we consider the potential of the economy,” Dr Salehuddin Ahmed, former governor of Bangladesh Bank (BB) told The New nation on Monday.
The growth would be exceeded over 7 per cent if the economy could exploit its full potential. We have failed to achieve the desire economic growth mainly due to lack of necessary investment, particularly in the private sector, he added.
Dr Salehuddin Ahmed opined that stagnating private investment remains a concern and it may hinder sustainable and inclusive growth. He also said that the proposed budget lacks structural reforms and policy directives to boost private investment.
“We need a big push to accelerate private investment. And if we fail to do this, achieving an inclusive and sustainable economic growth would remain a mirage”, he commented.
Dr Salehuddin Ahmed also expressed skepticism of achieving 7.2 per cent GDP growth next fiscal taking up the issues of prevailing investment climate and energy crisis.
