Staff Reporter :The National Economy has suffered severe production losses to the tune of Tk 4,900 crore due to the political turmoil from January to mid-March this year, according to the Centre for Policy Dialogue (CPD). The loss is equivalent to 0.55 per cent of GDP.CPD came up with the estimation at a media briefing on its recommendations for the upcoming National Budget for the fiscal year 2015-16 held at BRAC Centre Inn in the city on Sunday.”As political unrest continues, major sectors have incurred a loss equivalent to Tk 4,900 crore or 0.55 per cent of GDP from January to mid-March this year,” said CPD Research Fellow Towfiqul Islam Khan while presenting a keynote.In his keynote, Khan presented an analysis of economic loss covering major sectors including agriculture, poultry, shrimp, apparels, plastic, transport, tourism, banking and insurance, wholesale, retail trading, real estate and education.At the media briefing, the CPD also presented an analysis of the current state of the national economy. CPD Executive Director Prof Mustafizur Rahman said, “Our analysis particularly focused on macro-economic updates in the run-up to the upcoming National Budget, economic losses arising from political violence in early 2015, implications of key global factors and IMF’s ECF and World Bank’s proposed development support credit.”He mentioned that despite deterioration of political situation, Bangladesh economy continues to enjoy relative macro-economic stability in the form of low inflation, manageable fiscal deficit, stable exchange rate and favourable balance of payments (BoP) position.Coupled with the domestic issues, a few negative developments in the global economy could have implications for Bangladesh economy. These include receding remittance flow, falling economic growth in the EU, sluggish demand for Bangladesh RMG products in the US market, significant decrease in export growth and higher appreciation of the BDT against the Euro vis-à-vis Bangladesh’s export competitiveness.Talking about the persistence slowdown of the National Economy, CPD distinguished fellow Dr Debapriya Bhattacharya said that among the shortcomings, private sector investment remained lacklustre for the political environment’s failure to facilitate investment and policy incentives. “The downward slide must be improved through inclusive politics,” he noted.He cautioned that without undertaking policy and infrastructural reforms at most government institutions, the economy may continue to stumble in achieving the anticipated growth, which now remains somewhat stalled around 6.0 per cent.However, the expected reform agenda supported by the IMF and World Bank development support credit, may curb the government’s autonomy over policy space, Dr Bhattacharya said. “Reforms must be domestically-owned and nationally-designed,” he added.Dr Bhattacharya shed light on how, without reform measures, effectiveness of public private partnership remains doubtful, ADP projects continues amidst mismanagement, banking sector suffers irregularities and district budgets lacks engagement with the local context. He also urged more clarity regarding the import data for suspected anomalies and reforms in the upcoming Seventh Five-year Plan.As the National Board of Revenue (NBR) is likely to miss its revenue target, the government must increase revenue generation, particularly in view of the forthcoming Pay Scale for government employees and assess its fiscal viability, said CPD analysis. Among other specific policy recommendations, the CPD urged the government to address the issue of economic losses through appropriate fiscal and budgetary support. CPD Director Anisatul Fatema Yousuf and its Additional Research Director Dr Khondaker Golam Moazzem, among others, were also present, at the briefing.
