The government is set to miss key targets, including GDP growth, infrastructure and investment, in its six five-year plan (SFYP) to be concluded this year.
According to the latest progress report of the General Economic Davison (GED), investment climate in Bangladesh remains challenging and only modest progress has been made during the plan period.
As a result, slowdown at the rate of investment may lead to failure to achieve the average GDP growth rate above 7% over the remaining period of the Plan.
Public investment and overall total investment target was not at par with SFYP targets in FY 2011-13.
However, the solid growth performance in Bangladesh during the SFYP so far compares favourably not only by own historical standards but also looks very good in international and regional comparison.
The report said the domestic investment effort had been restrained and the flow of foreign direct investment (FDI) had been small, relative to competitors. Despite some recent improvements, Bangladesh’s average net FDI level of less than 1% of GDP is the lowest among the regional comparators.
Prudent macroeconomic management has been the hallmark of Bangladesh’s long-term development. This was underscored in the SFYP while the implementation record shows that it has not only been preserved, but also strengthened during the plan period.
Fiscal urgency has often required cutbacks in spending, in areas of high priority, and, as a result, inability to meet the plan commitments, particularly in education, health, social protection, and environment, has occurred.
The progress report found that procurement problems (particularly land acquisition) have slowed down the implementation of major infrastructure projects.
The important policy initiative of public-private partnership in infrastructure has not achieved the desired momentum, said the report.
Regarding external sector, the report stated that despite the strong performance in exports, the diversification of the export base did not happen. On the contrary, the share of RMG export was increased.
GED member of the Planning Commission (senior secretary) and architect of seventh five-year plan, Dr Shamsul Alam had earlier said the government would try its best to accelerate the growth rate in the upcoming plan period and attaining growth rate of more than 8% in the first two years of the new plan.
He said the major achievements were yet to be achieved, such as, investment, infrastructure development, and the GDP target.
Compared to the Sixth Plan targets, there is a shortfall in GDP due to sluggish global economic situation and private investment, he said.
However, some shortfall in domestic employment has been offset by better-than-expected performance in overseas employment, he opined.