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Overcoming challenges

  • Published at 12:00 am January 27th, 2019
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The only way to go? BIGSTOCK

How our country can reach new heights

The Centre for Economics and Business Research (CEBR) in London ranked Bangladesh as 41st among the largest economies in the world -- up two places from the previous year. To contextualize: India is ranked 5th, Pakistan 44th, and Sri Lanka 66th.

CEBR also observed that Bangladesh is set to witness a significant economic growth in the next 15 years.

They are expecting Bangladesh’s “annual rates of GDP growth to average 7.0% between 2018 and 2033.” Our GDP was at $280 billion in 2018, and should increase to $396bn in 2023.

Bangladesh has benefitted from garments exports, a strong increase in remittances, domestic consumption expenditure, and government spending.

However, they noted that our country “runs the risk of negating gains from its successful export sector through its growing appetite for imports.”

In this context, one needs to refer to the fact that Bangladesh’s overall balance of payment recorded $837m in deficit during the July-November period of this fiscal year compared to the corresponding period of the previous one.

The overall deficit in BOP was $479m during the same period of FY 2017-18. Bangladesh Bank has noted that the sharp fall in the country’s financial account and capital account surplus were primarily responsible for the widening of the BOP.

It is clear that, over the last five years, Bangladesh’s economy has moved forward, but continues to face several challenges. The new Finance Minister AHM Mustafa Kamal has a tough task ahead, but appears to have taken his task of overcoming the challenges with commitment.

He has expressed optimism that GDP growth rate in the current fiscal year would reach 8.5% and has urged concerned authorities to adopt necessary measures for reforms pertaining to non-performing loans. He has also drawn attention to a few other pertinent issues: That only about 1.5 million people in Bangladesh pay income tax, although nearly 25% of the population has entered the middle-income category.

In keeping with AL’s 13-point election manifesto for reforming our ailing banking sector, the Finance Ministry has already sought the active intervention of Bangladesh Bank to tackle illegal capital flight to foreign destinations and money laundering.

The Finance Ministry and Planning Ministry will have to have greater interactive engagement. This is required to re-build trust not only within the business and manufacturing sectors, but also among the foreign entities who might be interested in investment and doing business within different facets of our economy.

Success in this sphere will strengthen efforts to be carried out in the future by our diplomatic missions abroad. New Foreign Minister AK Abdul Momen has underlined the particular importance of such activities: Our diplomatic missions should also help our ministry of commerce to boost our export potential by identifying new markets for our evolving diversified manufactured products.

If these contentious areas can be addressed successfully, we will be able to eliminate the negative connotations that have surfaced with the latest Forbes report that came out at the end of 2018. 

Any observations made by Forbes is taken seriously all over the world. Consequently, though they may be only partially correct, BEPZA should be more pro-active in its efforts to remove existing challenges and improving further investment opportunities. There should also be active planning with regards to skill development to enhance opportunities for not only job opportunities abroad, but also in attracting investment into Bangladesh.

According to the latest report of the Economist Intelligence Unit, Bangladesh has gained four places in the latest Democracy Index. That is recognition of participatory engagement. As a citizen, I am confident that further pro-active efforts by the new government will enable our country to reach new heights. 

Muhammad Zamir, a former ambassador, is an analyst specializing in foreign affairs, right to information, and good governance. He can be reached at [email protected]