Labour productivity has slowed down significantly in Bangladesh during the last decade (2001-2012) because of slower growth in domestic savings and persistent high-level of household consumption, a conference was told.
Moreover, the country’s GDP growth continues to grow at a slower rate than major trading partners.
The average growth rate of GDP per worker fell from 3.4% during 1990-2000 to 2.4% during 2000-2011 while the growth rate of GDP per hour worked fell more sharply from 3.3% to 1% during the same period.
The country registered an average GDP growth rate of 4.8% during the period of 1981-2012 as compared to 5.9% during 2001-2012.
Hamid Rashid, Senior Adviser for Macroeconomic Policy UN Department of Economic and Social Affairs, New York, came up with the observation while presenting his report titled ‘’Stimulating Productivity Growth for Achieving Sustainable Middle-income Status,” at a session of Bangladesh Economist’s Forum (BFF) conference at a city hotel yesterday.
Planning Minister AHM Mustafa Kamal, Bangladesh Bank Governor Atiur Rahman, however, intercepted the presentation of the session, disagreeing with the findings. In response, Hamid Rashid informed the meeting that the figures were compiled from the available published data.
He said productivity growth is a key determinant for achieving convergence with meddle and higher income countries. But productivity growth slowed in Bangladesh due to weak growth in domestic savings, persistent investment-savings gap, inadequate tracking and monitoring of productivity growth and absence of an over-arching industrial policy for productivity-led economic growth, he said.
“As the major consumption of people goes to the food due to high inflation, growing dominance of short-term finance in the economy and lack of appropriate savings instruments also among the factor of lower productivity,” he added.
According to his report, household consumption of Bangladesh was 77.8% against the country’s total investment of 25.1% in 2011.
The report also painted a grim picture of house hold consumption and then investment in the neighbouring Asian countries while India was 63.5% and 31.7%, Pakistan 81.2% and 14.1%, China 36.4% and 47.6%, Vietnam 68.5% and 29.7%, Cambodia 82.3% and 17.1% and Indonesia is 56.6% and 33%.