There is reason to be optimistic about Bangladesh
Other countries take a particular interest when a country moves up the economic ladder.
They monitor the different facets of such development and try to understand where and how they can have an interactive engagement in that functional matrix. They do so to identify areas where they can invest or be a partner, so that bilateral interests can be looked after.
Think tanks from other countries also contribute to this process of determining fiscal health. The effort then tries to identify areas where there are positives and where there is potential for transformation. Such monitoring is presently taking place with regard to Bangladesh.
Recently, the Washington-based think-tank Heritage Foundation in their 2019 Index of Economic Freedom has ranked Bangladesh as 27th among 43 countries within the Asia-Pacific region. It has also observed that Bangladesh can do better if in regional terms, coordinated action is undertaken by the relevant authorities to tackle the problem of relatively poor connectivity within Bangladesh’s infrastructure, endemic corruption, fragile rule of law, insufficient power supply within the energy sector, and relatively poorer labour productivity growth.
One should look at these observations from the positive point of view where the glass is being termed as being half-full. It would also be worthwhile in this regard to mention that according to some of the monitoring agencies, these drawbacks are affecting investment potential and implementation in the different Export Processing Zones being created by the government in different parts of the country. Comparative lack of guaranteed institutional support as available in Vietnam, Thailand, Malaysia, or Singapore is casting its own shadow.
Within Bangladesh, RMG manufacturers have also been analyzing the difficulties that are gradually coming to the surface because of Brexit. Facts revealed recently have noted that Bangladesh’s export growth to the UK in the first half of the current fiscal year has posted only a 3.16% increase, compared to 14.42% overall export growth for the country.
There is fear that the growth prospect in the third largest market for Bangladesh’s goods could weaken further because of the uncertainty created by the No-Deal prospect within the Brexit horizon. The BGMEA thinks that there is a creeping slowdown within the UK economy because of the Brexit deal and the importers are slowing down their import of goods in general to prepare themselves for possible changes in UK’s future trade policy after the EU divorce.
Another aspect has also drawn the attention of economic analysts who have correctly pointed out that the performance of our capital market in 2018 could not match the level of expectations of potential investors and stakeholders -- both domestic and also foreign, particularly among our expatriate Bangladeshi population (with a desire to invest in our stock market).
According to some NGOs, the government has been able to make some progress in implementing surveillance in the market -- through their “pro-active interference and separate governance guidelines, but the capital market was still short of any notable performance.”
This was evident from the fact that most of the IPOs offered in 2018 were not from well-recognized organizations, but were from the lower end of the capital market. This affected public interest within the market.
Such a situation was also not helped by the fact that the exchange rate as well as the interest rate volatility of the taka created uncertainties among potential investors. This in all probability induced an outflow of money from the country. This in turn generated more pressure on the deposit base of different banks.
We need to understand that we have to overcome this absence of corporate foreign interest in order to move forward, and eventually graduate from being a billion dollar economy to a trillion dollar economy.
Hopefully, our newly elected government will be able to enforce as promised, an improved fiscal governance format within our financial sector, particularly within our banking sector. As underlined by the prime minister, there has to be zero tolerance with regard to corruption. Archaic laws and regulations will also need to be addressed and updated, as we have entered the age of e-commerce. Measures will also have to be taken to speed our efforts towards a more digitalized economy and within the capital issuance configuration.
One has to admit that our new government is trying to address many unresolved issues that have affected our branding as a country. This has been reflected in several significant steps in different sectors. In the education sector, we have noted the serious efforts that have already been made to tackle the matter of question leaks ahead of the SSC examination that started from February 2. This has been tainting our record in the eyes of educational institutions abroad. We need to re-gain faith in our system.
We have also seen how the Bangladesh Inland Water Transport Authority (BIWTA) has, with the help of law enforcement authorities, been able to demolish hundreds of illegal structures during their eviction drive to free river banks from encroachment. Some accused have also been jailed for illegally filling up river banks and then establishing illegal structures and sawmills. Their positive efforts have freed local residents from being forced into gradual desperation.
Similarly, the Anti-Corruption Commission (ACC), after careful investigation and inquiry in the health sector, have identified 11 areas of corruption and prepared a set of 25 constructive recommendations to stop them. These have been handed over to the health and family welfare minister. These include following e-government procurement tender process regarding purchase and conducting inquiry before giving approval for setting up diagnostic centres and private hospitals.
These need to be done in an open and transparent manner to ensure accountability and remove the corruption potential.
We have created over the past decade greater expectations, and are now looking forward to enhanced achievements. Poverty has been decreasing steadily and our nutritional status improving. The inflation rate has slowed down, and our balance of payments has also improved. Unemployment has remained low, and the RMG sector has performed strongly.
These factors now generate optimism and create confidence, and we should not forget the potential connotations and denotations of such a paradigm. We can see the sun, and shall watch it shine.
Muhammad Zamir, a former ambassador, is an analyst specialized in foreign affairs, right to information, and good governance. He can be reached at [email protected]