A LEADING daily reported on Thursday that a deepening economic strangulation resulting from political uncertainty, slow down in investment and poor human resource mobilization is bringing setback to Bangladesh economy. The macroeconomic variables; which work as the foundation of the economy are showing fatigue and downward trend. Industrial production is slowing, investment in manufacturing, interest rate, remittance inflow are facing perils. Exports are shrinking, imports are high mainly to conceal capital flight in absence of lack of investment opportunity locally and revenue collection is missing targets.
The report quoted economists and chamber leaders as blaming wrong policy of the government marred with unbridled corruption, poor governance and a hostile external environment towards the government for the slow onset of the downturn in the economy. They have also rightly pointed at political deadlock, alarming law and order situation and acute shortage of gas and electricity to have been contributing to develop the stagnation. Moreover, the high rates of lending for investment to new business are aggravating stagnation when banks are sitting on huge liquidity for funding investment. Bangladesh has very high potentials for growth and yet the economy is showing many roadblocks to development and if the situation can’t be reversed immediately, the good economy is going about to turn into a bad economy soon.
As the situation unveils, nobody would disagree with what the economists and business leaders say about the sinking nature of the economy mainly from lack of enough investment in the productive sector. Private sector is the engine of growth that creates jobs and income generating activities. But investors are unwilling to invest in risky political environment at high cost of capital. As per output figures of Bangladesh Bureau of Statistics (BBS), manufacturing in July this year turned into the worst. Production of readymade garments, leather goods, pharmaceutical products and such other major sectors plunged at the low. The decreasing trend also has been verified in terms of lower imports of real capital goods and industrial raw materials.
In July-September period import growth decreased to 8.53 percent when the decline in the import of heavy machinery was reported at 28 percent suggesting that a growing stagnancy is in the build up pulling back economic growth.
There is nothing new in the disclosure; what new people want to see is whether the government will change its course of hostile politics to restore stability for economic growth. Nobody will dare to put money in chaotic situation and the economy will only continue to sink without fresh investment.
