The government in 2016 will have to focus on addressing unemployment crisis among educated youth as it has set a goal to reach the status of a middle income country in a few years, said economist Hossain Zillur Rahman.
He said if the problem of educated unemployment was not solved, new graduates would remain a burden for the economy.
Former caretaker government adviser was talking to the Dhaka Tribune in a recent interview as he evaluated Bangladesh economy and politics in the just-concluded year.
According to him, the government in 2015 was in comfort zone with no major natural calamity in the country and no external economic shock.
Besides, political calmness had been restored and investment environment got improved, though not sustainable, he added.
“Last year there was no major natural calamity in the country and no external shock. The import prices of fuel oil and foods remained low,” Hossain Zillur Rahman, who is also executive chairman of Power and Participation Research Center (PPRC).
“But the investment situation remained stagnant and the GDP growth couldn’t be increased to above 7%.”
Accusing government of inertia about reforms in administration, he said the government was not doing enough to ensure good governance which is important to attract investment.
“According to the government statistics, the private investment remains only 21% of GDP. The ration has been standstill for last eight years, although the public investment increased from 5% to 8% of GDP.”
“It is a new phenomenon of the government where it has wanted to show the more public investment.”
Hossain Zillur Rahman said: “The government claimed the total investment had been raised to 29% of GDP, but the average growth rate has not increased over the years.”
He accused the government of showing a Tk100 crore development project as Tk1,000 crore, which had stoked “inflation in project cost.”
He claimed due to this, the investment effectiveness was not working in the GDP.
Zillur Rahman said in Padma Bridge project, the Implementation and Evaluation Division now questioned the rise of expenses and in a country like Bangladesh, such rise of cost is indicative of corruption.
He stressed the need to “restore democratic rights and establish good governance” for a favourable environment for investment.
He said higher remittance earning and agricultural production eased the pressure on government.
Zillur Rahman, however, criticised the government’s food procurement policy terming it as “corrupt.” He said farmers were not getting the benefits of bumper production as the prices they farmers received were lower than production costs.
While talking about people’s living standard, Hossain Zillur Rahman said over the years the expectation of improved living standard increased among common people as a large section of population had come out from hand-to-mouth living condition.
“People now want to spend more money than ever on quality education for their children while the expenditures on healthcare and transports have also increased.”
But the healthcare expenditures were getting higher and higher while the situation of public transports, particularly in cities, had not improved, he said. “People are still struggling for a better living standard as gap between income and rising cost continues to widen.”
He said democracy, good governance and a transparent banking sector are important for graduating to a middle income nation.
Zillur Rahman cited the case of China which was able to achieve high economic growth through ensuring good governance even in the absence of democracy.
