Kazi Zahidul Hasan :
Bangladesh faces immense challenge to take its economy to a higher growth trajectory mainly due to messy politics, said economists.
They said, the economy still remains underperformed due to lack of a congenial political environment despite having various comparative advantages.
Recurrent political upheavals have also created structural imbalances on the economy, they added.
“Disorganized politics is taking its toll on Bangladesh economy. It is undermining investor’s confidence and creating hurdles on long-term investment,” Dr Zahid Hussain, the Lead Economist of the World Bank’s Dhaka office, told The New Nation on Monday.
He added that Bangladesh economy was suffering from the impact of recurrent of political instability. It is delaying reform, depressing investment, lowering factory output and damaging job creation.
Referring to the recent growth pattern, Dr Zahid said, “Bangladesh economy has been growing at 6.0 per cent on an average for the last five years. But this growth is not optimum for an economy like Bangladesh. The yearly GDP growth should be accelerated to 7.5 per cent to 8.5 per cent to transform the country into a middle-income one by 2021”.
“The economic growth has been stalled due to lack of required investment. Bangladesh fails to lure required investment on account of absence of a long-term political stability,” he added.
Expressing concern over the ongoing political turmoil, Dr Zahid said that earlier Bangladesh was branded as ‘development miracle’ by development agencies, as it showed remarkable progress in various economic and social indicators. But the present trend of unhealthy politics has appalled that such a progress may not be sustained in the long-run.
“There are signs that the economy is going to decelerate taking a heat from the political violence. If it prolongs, it will undermine the long-term growth prospect of the country,” he warned.
He further said, political stability is one of the basic ingredients for economic development. The country may not go for a massive economic transformation unless a long-term political stability is restored.
“The sorry state of politics is blocking Bangladesh’s economic opportunity. Political unrest time and again is also eroding competitiveness in the local economy, depriving the government from expected revenue collection, creating hindrances to the implementation of development programmes and driving away the potential investors to other countries,” said Dr AB Mirza Azizul Islam, a leading economist of the country.
Such developments have created imbalances in various economic fronts posing challenges for Bangladesh’s long-term economic development, he added.
Dr AB Mirza Azizul Islam, former adviser of caretaker government, also said, the overall investment scenario does not improve since a strained political environment was prevailing in the country. Low capital investment due to years of political turmoil is precluding the pace of economic growth.
“The economy continues to face long-standing challenge due to troubled politics. It is taking a toll on trade, commerce, production, investment, financial market, and is distract away from implementing much-needed economic reforms,” said Dr Salehuddin Ahmed, former governor of Bangladesh Bank (BB).
He said, what is more worrying is that the political fallout from the January 5 general election is getting worse than before bringing damaging impact on the economy.
Voicing concerns over the increasingly divisive political culture of the country, he further said if Bangladesh fails to restore a long-term political stability, the economy may face further downside risks, adversely affecting the real GDP growth.
