Dr. Atiur Rahman
Governor, Bangladesh Bank :
Sustained steady spell of six-plus percent annual average real GDP growth for well over a decade amid global slowdown, job creation during 6th FYP outnumbering new job market entrants, and the attendant rapid poverty decline provides us strong confidence that we can attain the 7th FYP’s sustainable development objectives on all major fronts; with real GDP growth well above the trend of our peer group economies if not up to the ambitious plan target levels amid global growth slowdown.
Let me mention a couple of aspects that we shall need to focus particularly on in upholding and further strengthening our growth momentum over the 7th FYP period.
Firstly, after decades of globalization driven growth, global trade growth has now slowed, and is actually trailing global output growth. This indicates that the potential for export-led growth will be weaker and harder to realize for our export sector unless takes advantage of upcoming new opportunities in markets for goods and services that are produced using environmentally sustainable ‘green’ output processes and practices. Bangladesh Government and Bangladesh Bank have already gained global attention by being early movers in this direction; with enablement and facilitation steps for ‘green’ transition of output processes and practices in our businesses.
To name a few of the steps, relocation of our leather sector manufacturers to an area well serviced with ETP facilities is nearing completion, and BB is lining up a USD 200 million longer term financing line to support green transition of manufacturing practices in the export oriented textiles/apparels and leather sectors.
These are only small initial steps, with lots more to do in our intended countrywide transition to environmentally sustainable output practices and lifestyles; and I look forward to our development partners in supporting our efforts for ‘green’ growth in both export and domestic sectors.
Secondly, the more subdued prospects of export led growth means that we shall need to foster more in domestic demand led growth. Here again, Bangladesh clearly is an early mover, with our government’s attention towards broad based equitable socio economic development, and with BB’s sustained initiative of promoting socially responsible inclusive financing of environmentally sustainable output initiatives.
Some of our development partners are already engaged in supporting and co-financing of our enablement and facilitation initiatives, and we look forward to their broader, deeper engagement over the 7th FYP period.
Let me mention in this context that we are vigorously pursuing financial markets development to enhance our financial sector’s capacity in meeting the financing needs for realization of the 7th FYP growth goals.
To name just a few, to redress the scarcity of longer term savings to finance infrastructure and other long term projects, we are working with development partners to introduce pension savings schemes for the general citizenry including NRBs, besides reforms in public sector pension schemes. As interim measures, we have put in place a WB supported local longer term lending line in USD for manufacturing businesses, I have already mentioned the other one being lined up for green transition in the export oriented textiles and leather sectors.
To mitigate risks in agriculture sector financing, we are working with development partners towards introducing insurance products for crops, livestock and fisheries.
BB is steadily strengthening financial sector regulation and supervision towards full convergence with Basel based international best practice standards in capital, provisioning, liquidity, leverage, governance and risk management in the financial sector; and with use of online reporting and real time surveillance practices. I look forward to yet more deepening in engagements with our development partners during the 7th FYP period, towards getting our financial sector in readiness for fuller integration with the global financial markets.
