The World Bank (WB) on Monday said Bangladesh needs to boost private sector investment for achieving a sustainable and inclusive economic growth and poverty reduction.
It said the country’s economy remained underperformed over the years due to lack of necessary private investment which now stands at 21.8 per cent of the GDP.
“Bangladesh faces formidable challenge to stimulate private investment and a low level private investment hinders its economic prospect,” said a WB report titled ‘Bangladesh Development Update.’
WB’s Dhaka office released the report through a media briefing yesterday.
Qimiao Fan, the WB’s country director for Bangladesh and Dr Zahid Hussain, the lead economist and author of the Bangladesh Development Update, were present, among others, at the briefing.
“Private investment is not accelerating to support an inclusive economic growth due mainly to absence of a congenial investment climate,” said the WB report, adding, “Weak institutional capacity, insufficient infrastructure, lack of access to financial services and unsuitable laws and regulations are deterring investment.”
It said Bangladesh needs to improve in these areas immediately along with creation of stable political and transparent commercial legal environments to stimulate domestic investment for achieving rapid economic development.
‘Economic growth is the most important means of raising people’s incomes and reducing poverty. It creates jobs and opportunities for poor people to support their families and build more stable futures.
The Washington-based global lender also said that Bangladesh has done an impressive job in reducing poverty over the last decade and has the potential to end extreme poverty by 2030 if it takes firm steps to make growth more inclusive to benefit all Bangladeshis.
“Bangladesh is making sustained progress in poverty reduction and increasing opportunities.It can reduce extreme poverty to below 3.0 per cent by 2030 through grater economic inclusion,” said another WB report.
The report titled ‘Poverty and Shared Prosperity 2016: Taking on Inequality’, also published on the day.
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, according to the reports.
More than 16 million people in Bangladesh graduated from extreme poverty between 2000 and 2010, added the reports.
Achieving the goal of reducing extreme poverty to less than 3 per cent of Bangladeshis by 2030 will require economic growth becoming more inclusive with the poorest 40 per cent of society receiving greater benefits from development.
The reports also show that the country is currently the 64th poorest out of the 154 countries and much remains to be done. The development update stresses increasing resilience to security, financial, and trade shocks along with weaker than expected global trade and growth.
To move to the next level and realise its goals 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 jobs, focus on energy and transportation infrastructure, and make progress on improving the quality of health and education.
