Mr. Samsul Alam, Member, Planning Commission in a recent interview has given an assessment of the previous year in a positive way. If we sum up his evaluation we find that the year 2019 was a good year considering the Gross National Product (GDP). Last year the growth rate was 8.15, which is highest in the recent time. The supply side of our economy was very speedy. Productivity of agricultural sector was satisfactory. There was no natural calamity. Service sector was also very encouraging.
Though there was a shadow of recession over the world economy but Bangladesh was free from its bad effect. The index of public consumption has been increased. The income from Remittance has bounce back. From this sector the income may reach one thousand five hundred and fifty crore dollars. We are hoping that the growth rate may reach 26 percent in this sector.
At the same time there are challenges for us also. First of all, revenue earnings have not increased. The cause behind the failure is that required reform has not been done. Laws have been passed to collect vat but National Revenue Board (NRB) has failed to send necessary tools to the businessmen. The second challenge will be inflation which is increasing. Now six percent inflation is going on. The trend is rising which is a grave concern. The third challenge is export is not increasing as desired. Currently world economic growth rate is decreasing which is affecting Bangladesh. Business does not proceed on a straight line. So business will increase always is not true. There are ups and downs in business. The Indian and Chinese economy is also falling low. Their growth rate is also reducing.
Salim Rayhan, a professor of Economics Department and executive director SANEM opined in an interview that the main success of 2019 GDP growth rate for the first time crossed 8 percent. At the same time we are observing some internal and external pressure has been upon us. More over there is no harmony between GDP and other indexes. We are also observing that export is decreasing, borrowing in the private sector is also decreasing but only remittance flow is increasing. A kind of stagnancy is prevailing in investment. As a result unemployment problem is deepening.
Those who are telling that there is stability in economics Mr. Salim does not agree with them. His view is that economy has lost its previous flow. We should not judge every thing by the same yardstick of growth rate. In comparison with the similar economy our economy is back sliding.
On the other side due to global reality we are going to face different challenges. It is true that the growth of global economy is sluggish for trade war between China and U.S.A. Recently a new wave is creating in favor of nationalism and protectionalism. For this reason our exports are decreasing. We have failed to put to good use the plus points of trade war. But Vietnam is exploiting the benefits. We are lag behind in such competition. Even we are incapable to monitor our market. Otherwise there was no need of suffering for abnormally high price of onions due to non-supply of onions.
In the year 2020 we have to face some new challenges. Our sense of ideology, principals and values has been paralyzed. The influential persons who matter in running the state machinery have lost their interest in reform. So, regain our potential inertia may be one of the main challenge. It will be a big challenge for us to increase the ratio of revenue in terms of GDP. It is also essential for implementation of big projects and SDG. Our position in GDP and revenue ratio is dismal in the global context. Further more good governance in the economic sector should be established immediately. Banking sector is sinking, the loan defaulters are facing severe crisis. Decrease of interest ratio may not solve the problem. New complications will arise. Already banks are not entertaining new loan proposals. Conservative or cautious banking will not help diversity of economic activities.
Lastly though GDP has increased but the budget allocation in health sector, education sector or social security sector have not increased. So it will be difficult to achieve the target of sustainable development.
On the light of this analysis we hope that policy makers should expedite reform in economic sector. There should be a high powered banking commission to be set up for saving our banks. Changes in revenue sector are also urgent. Political commitment is a priority for going forward. Modern economy is not isolated from politics. So we are bound to look at our economy with political foresight.
This is the rule of economics that if one sector fails another sector rises. Recently our telecommunication sector is growing rapidly. Already this sector’s contribution in GDP is 8 percent. It is a new sector and giving leadership in digital revolution. In the meantime, a lot of youth having innovative capability are showing courage to set up new start-up companies. Digital economic activities are expanding all over the country depending on strong telecommunication network. The periphery of mobile business is expanding. Still we are lacking behind in the field of IOT, artificial intelligence, data analysis and block chain technology. Mr. Shamim Ahasan ex-president Bangladesh Association of Software and Information Service has explained the problem of this sector giving a good example that we may be small fish but fighting with sea sharks. We need a master plan. Foreign companies are capturing this market. Should we remain indifferent?
Readymade garment sector was enjoying the leading position in our industrial sector. But recently our export of RMG has fallen. Because value of our currency is not stable against dollar. Selling Prices of RMG products have increased but purchase orders have decreased. In an interview, Rubana Hoq claimed that in October 21%, in November 12% and up to middle of December 27% export of RMG have decreased.
Bangladesh now faces with the problem of confidence. Share market is sinking because the investors have lost their trust on Regulatory Authority. No legal actions have been taken against the manipulators. Most amazing thing is that they are the policy makers. Every one should bear in mind that disaster does not care blindness. The share market related organisations are facing severe crisis. Broker houses many close down if the crisis prolonged. Merchant Banks are also in a critical condition. How long Stock Exchanges would be able to continue their business is a big question.
The beginning of the 2019 was excellent. But we cannot say that the year ended with new hope. No institutional reform has been done. The trend in private investments is disappointing. Not only that the supply line of capital has been blocked. Banks and share markets, both the sources are suffering from bad governance. Now banks, capital market or investments are not only facing various problems but decrease of revenue collection and export is disturbing. It is a difficult task to increase revenue collection and if it remains negative then the government will be compelled to borrow more and more money from the banks and then the economic problems will be more complicated. Value of BDT may decrease, inflation may increase, export may fall and in short economic crisis may intensify.
Gloomy signs are already seen in the socio-economic horizon. But we are not pessimistic. As we are living in a changing world and therefore, we are not supposed to say for sure this will happen or that will not happen. The Middle East situation is turning bad to worse. Oil price has already on the rise. Certainly this will affect our economy. In the midst of global tension and crisis, we are to say, — Welcome 2020. Let the peace and happiness have a chance this year.
