Kazi Zahidul Hasan :
Although most macro indicators remained stable throughout the year of 2015, the economy was limping mainly due to lack of necessary investment, infrastructure bottleneck and corruption, economists said on Friday.
“No matter the macroeconomic indicators remained largely stable in the past year, the reality is that the growth and employment opportunities were slackening in the wake of sluggish investment coupled with structural problems,” Prof Abu Ahmed, a leading economist of the country, told The New Nation on Friday.
He said, Bangladesh economy seems to have lost the much needed vibrancy as a result of poor economic governance and institutional capacity, lack of necessary investment particularly private sectors’ one, rampant corruption and political uncertainty.
“Entrepreneurs are not taking risk of investing big projects as a discontent was prevailing in the country’s political arena. Even, many of them are looking for alternative investment destination aboard due to absence of congenial investment climate,” he observed.
Prof Ahmed further said private sector is playing a key role of the country’s economic development
and growth for years. But investment from the sector did not pick up for the last three years retarding the GDP growth.
The present level of national productivity is supporting a 6.0 to 6.5 per cent annual growth that the country achieved in the last six years. But this is not satisfactory because the economy has the potential to grow at a rate of 7.0 to 7.5 per cent, he said.
The economist mentioned although the economy is growing at an average 6.0 per cent annually, the benefits of growth was not distributed properly through the lower income group people creating a large scale income disparately between the rich and poor.
“Benefit of such an economic growth does not go to the people, because the income distribution is severely concentrated on 5 to 10 per cent people of the country creating an uncertainly over sustainable economic growth,” he noted.
Prof Ahmed also said that when the national economy is failing to take off in line with its potential, a group of people was engaged in rampant money laundering doing further harm to the economy. “The amount which they used to launder per year is equivalent to annual FDI inflow of the country,” he added.
Terming the money laundering a ‘key challenge’ for the country’s economic development, he suggested the government agencies to come out with a concerted effort to curb the menace.
He also said that poor access to bank credit and high interest rates are also holding back the economic growth. “Lending rates should come down to single digit to boost investment. Besides, an easy access of bank finance to small and medium enterprises and central bank’s policy rate cut could create the much needed vibrancy on the economy,” he added.
Prof Ahmed observed that stock market remained dull in the last six months of the last year which also affected the economic activities of the country.
When asked, Prof Ahmed said, Bangladesh economy was largely underperforming for years mainly due to a lower level public and private investment.
“The scenario may not change immediately unless the government undertakes massive regulatory and institutional reforms initiatives, timely implementation of mega projects and ensure good economic governance,” he said.
He also stressed the need for export diversification with a greater global trade integration to accelerate economic growth.
“Positive indicators do not always mean that economy is in right tract,” Dr AB Mirza Azizul Islam, a noted economist of the country, told The New Nation on Friday.
He added, no doubt most of the macro indicators remained positive last year, but the overall performance of the national economy was not up to the mark as many negative factors prevailed on macroeconomic front.
According to him, the negative indicators were unsatisfactory in respect of public expenditure and revenue collection, lower private sector credit growth, poor export growth and weak infrastructure.
“Poor road and rail communications, inadequate port facility and gas and energy shortage were hindering both local and foreign investment undermining growth prospect of the national economy,” he noted.
He further said that economy has been growing consistently over a rate 6.0 per cent for the last few years and it may not grow in line with the government’s projection unless prevailing constrains could not overcome rapidly.
Mirza Aziz, who was also the Finance Adviser of a caretaker government said, achieving the revenue collection target and boosting private investment will be key challenge for the economy this year.
“Although most macroeconomic indicators remained positive throughout 2015, the national economy showed a lukewarm performance without any good news in the fronts of investment employment generation,” Dr Salehuddin Ahmed, former Bangladesh Bank (BB) governor, told The New Nation yesterday.
He observed that an investment inertia prevailed during the period under review due to lack of a conducive investment climate and good governance in regulatory bodies, affecting job creation and economic growth.
In my mind, the economy many not come out from the low growth trap, unless a conducive political and business environment are created in the country.
“The national economy remained stable in 2015 with most economic indicators remained positive,” said Prof Dr Shamsul Alam, a member of Planning Commission.
He said, there were also some challenges facing the economy, including sluggish investment. Both public and private investment, was far beyond the target undermining the economic growth.
Although most macro indicators remained stable throughout the year of 2015, the economy was limping mainly due to lack of necessary investment, infrastructure bottleneck and corruption, economists said on Friday.
“No matter the macroeconomic indicators remained largely stable in the past year, the reality is that the growth and employment opportunities were slackening in the wake of sluggish investment coupled with structural problems,” Prof Abu Ahmed, a leading economist of the country, told The New Nation on Friday.
He said, Bangladesh economy seems to have lost the much needed vibrancy as a result of poor economic governance and institutional capacity, lack of necessary investment particularly private sectors’ one, rampant corruption and political uncertainty.
“Entrepreneurs are not taking risk of investing big projects as a discontent was prevailing in the country’s political arena. Even, many of them are looking for alternative investment destination aboard due to absence of congenial investment climate,” he observed.
Prof Ahmed further said private sector is playing a key role of the country’s economic development
and growth for years. But investment from the sector did not pick up for the last three years retarding the GDP growth.
The present level of national productivity is supporting a 6.0 to 6.5 per cent annual growth that the country achieved in the last six years. But this is not satisfactory because the economy has the potential to grow at a rate of 7.0 to 7.5 per cent, he said.
The economist mentioned although the economy is growing at an average 6.0 per cent annually, the benefits of growth was not distributed properly through the lower income group people creating a large scale income disparately between the rich and poor.
“Benefit of such an economic growth does not go to the people, because the income distribution is severely concentrated on 5 to 10 per cent people of the country creating an uncertainly over sustainable economic growth,” he noted.
Prof Ahmed also said that when the national economy is failing to take off in line with its potential, a group of people was engaged in rampant money laundering doing further harm to the economy. “The amount which they used to launder per year is equivalent to annual FDI inflow of the country,” he added.
Terming the money laundering a ‘key challenge’ for the country’s economic development, he suggested the government agencies to come out with a concerted effort to curb the menace.
He also said that poor access to bank credit and high interest rates are also holding back the economic growth. “Lending rates should come down to single digit to boost investment. Besides, an easy access of bank finance to small and medium enterprises and central bank’s policy rate cut could create the much needed vibrancy on the economy,” he added.
Prof Ahmed observed that stock market remained dull in the last six months of the last year which also affected the economic activities of the country.
When asked, Prof Ahmed said, Bangladesh economy was largely underperforming for years mainly due to a lower level public and private investment.
“The scenario may not change immediately unless the government undertakes massive regulatory and institutional reforms initiatives, timely implementation of mega projects and ensure good economic governance,” he said.
He also stressed the need for export diversification with a greater global trade integration to accelerate economic growth.
“Positive indicators do not always mean that economy is in right tract,” Dr AB Mirza Azizul Islam, a noted economist of the country, told The New Nation on Friday.
He added, no doubt most of the macro indicators remained positive last year, but the overall performance of the national economy was not up to the mark as many negative factors prevailed on macroeconomic front.
According to him, the negative indicators were unsatisfactory in respect of public expenditure and revenue collection, lower private sector credit growth, poor export growth and weak infrastructure.
“Poor road and rail communications, inadequate port facility and gas and energy shortage were hindering both local and foreign investment undermining growth prospect of the national economy,” he noted.
He further said that economy has been growing consistently over a rate 6.0 per cent for the last few years and it may not grow in line with the government’s projection unless prevailing constrains could not overcome rapidly.
Mirza Aziz, who was also the Finance Adviser of a caretaker government said, achieving the revenue collection target and boosting private investment will be key challenge for the economy this year.
“Although most macroeconomic indicators remained positive throughout 2015, the national economy showed a lukewarm performance without any good news in the fronts of investment employment generation,” Dr Salehuddin Ahmed, former Bangladesh Bank (BB) governor, told The New Nation yesterday.
He observed that an investment inertia prevailed during the period under review due to lack of a conducive investment climate and good governance in regulatory bodies, affecting job creation and economic growth.
In my mind, the economy many not come out from the low growth trap, unless a conducive political and business environment are created in the country.
“The national economy remained stable in 2015 with most economic indicators remained positive,” said Prof Dr Shamsul Alam, a member of Planning Commission.
He said, there were also some challenges facing the economy, including sluggish investment. Both public and private investment, was far beyond the target undermining the economic growth.
