ACCORDING to a report of an English daily the Finance Ministry in its internal report has assessed that the external sector of the economy performed badly in the first quarter of the current fiscal year, leaving a negative impact on the country’s already-struggling economy. The report of the Ministry was prepared ahead of a meeting of the coordination council on fiscal and monetary issues where a number of decisions on both domestic and external fronts of the economy were to be taken. Interestingly, the Finance Minister confirmed findings of the internal evaluation and registered his worriness in this regard. The newspaper report further added that Bangladesh Bank has been asked by the Finance Ministry to make an in-depth analysis of the domestic financial situation, including investment stagnation, for the July-September period of FY 14-15.
The external front of the economy largely commands in shaping the internal financial dynamics and the current situation raises worries about many other internal sectors, including the manufacturing and investment sectors, the report added. The report made suggestions to improve the situation, which included taking remedial measures after analysing the reasons behind the drastic fall of exports to North America, attaching emphasis on solving the wages and safety issues of the RMG sector to assuage concerns of the buyers and consumers abroad and taking initiatives to fully utilise the export potentials in large economies such as India and China.
The Ministry’s report also said export earnings during the period registered only 0.88 percent growth over the same period of last year, while imports in the first month of the current fiscal made a negative growth. However, it rebounded in August. The manpower sector also showed signs of decrease, whereas only leather sector showed potential. If the current situation prevails, the economic growth of the country will slow down due to the weak external sector and lead to massive economic and financial complications for the country. Experts opine that due to the sluggish performances of export, import, remittances, and foreign aids, the external sector’s contribution to overall growth will gradually keep falling. However, they think the main causative factor for such poor show is inherent in the credibility gap of the government over its legitimacy issue in the Western World – the ultimate destination or source of the country’s external trade and business.
The adversarial nature of the country’s politicians has again made an unfortunate impact leading to political instability, corruption on all sectors as well as production problems due to labour strikes. All these together have wreak havoc on the economy. To put the economy, particularly the external sector on right track, the government must should effectively support import and export with pro-active policy supports including cash incentives so that the economy can thrive and sustain without harming the external and internal sectors.
