We saw that due to reasons of lawlessness and chaos that followed the business environment has deteriorated since 2013. After five years, the confidence of businesses remains shaky and new investment is slow in coming.
In the meantime, the banking system became an easy game for looters. FDI and remittance inflows also faced a setback, political polarisation sharpened, income gap widened, and the trade gap broadened. We doubt whether the government is really in a position to know how to ensure a business-friendly environment.
Bangladesh achieved 7.28 percent economic growth and the size of its GDP touched $250 billion in 2016-17. Even then the country’s rank in the World Bank’s Doing Business 2018 Index has gone one notch down to 177 in 2017. The country needs at least $15 billion of annual investment in infrastructure development to attract foreign and local investment. Bangladesh will require $320 billion by 2030 to develop a reliable, sustainable and affordable infrastructure. The Dhaka Chamber of Commerce and Industry (DCCI) said that private investment needs to be scaled up to 29 percent of the gross domestic product from the current 23.1 percent. The export target is $37 billion for the current fiscal year, which will reach $41 billion if the services sector is included, and it will hit $60 billion by 2021.
Bangladesh will lose the Generalized System of Preferences from the European Union — which contributes 54.2 percent of the country’s total export earnings — as soon as it graduates from being a least developed country. So, Bangladesh needs to take preparation to qualify for the EU’s GSP plus facility by complying with core international standards in the areas of human and labour rights, environment and good governance. Because of slow progress, the costs for implementation of mega projects are exponentially increasing. The DCCI proposed forming a high performing authority to accelerate the implementation of mega projects but it may not work.
The country’s economy is to be judged by job creation through new investments from outside. Unless the local investors feel confident in the political atmosphere, solid investments will not take place. The government seems to be too busy with chaotic politics. It will not talk to others and it does not believe in political compromises. In short, we have a government that defines its own success.
