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19 July, 2018 12:21:22 PM / LAST MODIFIED: 19 July, 2018 12:32:34 PM

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More efforts required to accelerate development

Bangladesh has transformed its economy from an agricultural one to a manufacture-based one
Prof Sarwar Md Saifullah Khaled
More efforts required to accelerate development

Although Bangladesh's economic growth at recent time is consistent it needs to do more for its further and accelerated development. There are key challenges which are relevant to and are faced not only by Bangladesh, but also the South Asian region and other countries of the world.

However, the perspectives on various economic opportunities offered by the country are to be noted. An important point to be mentioned is that Bangladesh is the bridge between China and India. This aspect of the country correctly defines Bangladesh's role in Asia. When Bangladesh is moving and powering ahead across a broad spectrum of socioeconomic activities, at a point in time, a lot more remains to be done. The effort is now needed to be directed toward breaking ice on the issue of Bangladesh as an investment destination. So it needs to be seen what the countries of the region can achieve together.

Drawing the anecdote of Henry Kissinger terming Bangladesh as a "bottomless basket", it may be said although such declarations affected investors at the early stage, Bangladesh by now has stood up to the occasion. Many who visit the country in recent time say that they had noticed a stark difference from what they had witnessed back in the 80s. However, in order for Bangladesh to step up and develop further the country's vast population must be empowered, fed and educated. The infrastructure calls for further improvement, and do more for boosting the nation's intellectual resources and these must be channelled in the right direction.

The Bangladesh's economy had made remarkable progress in the last few decades. The country’s growth has been accompanied by a significant decline in poverty rate, increase in employment and greater access to health and education, and improvement in basic infrastructure. This success is to be attributed to the Ready Made Garment (RMG) industry and sustained inflow of remittances. Today Bangladesh is the 33rd largest economy in the world in terms of purchasing power parity. Other social indicators such as gender equality, women empowerment, mortality rate and such are remarkably better compared to its other neighbouring countries. But some challenges such as the population size, resource constraints, vulnerability to climate change and the Rohingya crisis still persist.

Bangladesh has successfully been able to negotiate preferential market access based on norms of spatial and differential treatment at major trade organisations like the World Trade Organisation (WTO) for its manufacturers. Bangladesh transformed its economy over time from an agricultural one to a mainly manufacturing one. As a foremost exporter of garment and pharmaceutical products, Bangladesh's ever-spreading diaspora supports it with high remittance figures as well. The successes of microcredit, non-formal education etc. emanated from the Bangladeshi soil and spread its ideas across the globe. In terms of challenges, the main to be pointed out are the high population size and skilled employment for the youth as major blockades to the country’s development. But Bangladesh is a country anxious to move forward. Any observer of Bangladesh can easily notice its sustained growth and its acceleration of growth from 6 percent to a little over 7 percent. In order to reach the middle income status, the country has to increase that number further to 8 percent, which can be possible with efficiency improvement.

However, though tax revenue has steadily increased, but the tax-GDP ratio is still low. But if the size of the country's economy is taken into account, its informal economy and the generous tax credits issued to businesses in the country is significant. Some say today that there is much to learn from Bangladesh's success stories. Bangladesh has provided the first foundation and is an example in the world about how a third world type democracy and free market economy can benefit a country's economic development. Stress on more frequent public-private partnership (PPP) will benefit the country in the long run. It is to be noted that transformative projects must include the construction of social capital in Bangladesh, and the need for more female entrepreneurs, which is currently only a handful in number.

The government is ensuring key elements such as accountability of its departments and offices, and initiating performance review systems and reforms in the financial management system for better investment opportunities; however, more is needed to reach milestones. The Right to Information (RTI) Act, which was inspired by the objective of empowering citizens with the right to know how the government exercises its authority under the laws of the land, needs to be implemented in full. Bangladesh may have excelled in its socioeconomic indicators, but in order to become an upper-middle income country by 2021 – increased contribution from the manufacturing sector, higher investment ratio to GDP and other issues need to be focused on. There is no form of discrimination against local or foreign investors; Bangladesh has signed bilateral investment treaties with several foreign countries.  The campaign against corruption and undesirable work practices will not ease off nor halt, promising not only to hunt down "tigers", high-ranking corrupt officials, but also swat "flies", the low-ranking ones, and to step up actions against corruption occurring on the people's doorsteps. Over and above a whole hearted called for the efforts to speed up industrial restructuring, achieve high-quality development, improve people's livelihood, and protect the environment is a burning necessity of the hour.

The writer is a retired Professor of Economics, BCS General

Education Cadre

IK

 

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Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
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Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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