Kazi Zahidul Hasan :
The economy remained stagnant throughout the year 2014 as a potential investment crunch gripped the country during the period taking the heat from infrastructure bottleneck and energy crisis, economists say.
They said that 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.
“The overall economic performance was mixed as there were both positive and negative factors prevailed on macroeconomic front,” Dr AB Mirza Azizul Islam, a noted economist of the country, told The New Nation on Thursday.
According to him, the negative indicators were unsatisfactory revenue collection, lower private sector credit growth, falling export and weak infrastructure.
The financial sector was in a mess as big loan scandals took place in both public and private banks
during the year. Even, the non-performing loans, particularly in the public banks, increased significantly, harming stability of the banking sector, he mentioned.
On top of this, implementation of Annual Development Projects (ADPs) during the first quarter of the current fiscal remained unsatisfactory and big projects could not witness much progress during the year affecting the overall economic development. Dr Mirza Aziz further said, the foreign currency reserve reached record high in the year 2014 buoyed by an increased remittance inflow. Low inflation and rising trend of import of capital machinery were some positive macroeconomic indicators. “Economy has been growing consistently over a rate 6.0 percent for the last few years and the growth may not accelerate in line with the budgetary expectation unless prevailing constrains could not overcome rapidly,” he noted.
In my mind, he said, Bangladesh economy will achieve a 6.0 percent plus or minus growth in the current fiscal year.
Dr AB 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 government next year.
“To accelerate investment, most urgent need is to bring about a political clam. But this may not happen if we take the Bakshibazar incident into consideration. We are apprehending series of street violence in the days to come, and if such a situation prevails, the national economy will once again suffer serious setback,” he warned.
Dr Salehuddin Ahmed, former Bangladesh Bank (BB) governor said, although most macroeconomic indicators remained positive throughout the year, the performance of the national economy was largely tepid due to lack of adequate investment.
“An investment inertia prevailed in the country as the government could not ensure conducive infrastructure for the investors as well as local enterprises. At the same time, it also failed to ensure good governance in both regulatory bodies and banks, therefore, affecting job creation and economic growth,” he added. He further said the economy continued to record sluggish growth, based on modest exports and remittance inflow, declining private-sector investment, and lower household spending. “Such a scenario is undermining our aspiration of achieving an inclusive economic growth to become a middle-income country. To achieve the goal, we will require substantial efforts on maintaining macroeconomic stability, strengthening revenue mobilization, tackling energy and infrastructure deficits, expanding financial sector and external trade reforms, improving labour skills and economic governance,” he noted.
Dr Ahmed, however, said that the performance of the agro-sector remained buoyant during the year 2014 and such a performance contributed to lowering commodity prices in the country and helped reduced inflationary pressure on the economy. “The national economy remained stable in 2014 with all the economic indicators remained positive,” claimed Prof Dr Shamsul Alam, a member (General Economic Division) of Planning Commission. But the overall investment scenario was not satisfactory that undermined the country’s economic growth. A low investment was the result of inadequate infrastructure, energy crisis and poor progress in implementation of economic zones, he added.
Although there were some challenges facing the economy, it performed well during the year with record food grain production and foreign currency reserve, low inflation marked by falling food and commodity prices and modest export growth.
Dr Alam further said the political situation was less disturbing during the year which also helped the economy to flourish further. When asked, he said, accelerating investment and timely implementation of mega project would be the main challenge for the government in the next year.
Bangladesh has maintained an impressive track record on growth and development. In the past decade, the economy has grown at nearly 6 percent per year, and human development went hand-in-hand with economic growth.
Poverty dropped by nearly a third, coupled with increased life expectancy, literacy, and per capita food intake. More than 15 million Bangladeshis have moved out of poverty since 1992.
