Project implementation
Bangladesh needs to address hurdles for higher growth
UNB
Bangladesh urgently needs to overcome the hurdles of project implementation delays, reducing average number of days required for contract enforcement and improved port facilities, among others, to step into a higher growth trajectory smoothly, reports UNB.
Inefficient management and congestions at Chittagong Port as well as at Dhaka International Airport, the two main gateways for international trade, are also among the main hurdles the country is facing now, says the International Chamber of Commerce, Bangladesh (ICCB) in its latest news bulletin editorial shared with the news agency yesterday.
As a result, according to the latest World Bank annual ratings, Bangladesh ranked 176 among 190 economies in the ease of doing business while the war-torn economies such as Iraq and Syria ranked 165 and 173 respectively.
Bangladesh GDP, after almost a decade of 6 per cent plus growth, has achieved 7.24 per cent in FY 17.
By 2050, Bangladesh, India and Vietnam will become the fastest-growing economies, with Bangladesh expected to see an impressive growth that will push it to 23rd place overall, said the ICCB quoting the report of PricewaterhouseCoopers (PwC).
The Business Insider UK in its latest report added Bangladesh as the fifth country in its list of Asian Tigers as the countrys economy has been one of the top performers in Asia over the past few decades, averaging an annual growth of more than 6 per cent.
According to analysts, Bangladesh, now a $220 billion economy, is moving forward with mega development projects, including $3.7 billion Padma Bridge, $2.7 billion metro rail, elevated expressway, flyovers, dozens of economic zones and Payra seaport.
Falling interest rates, increasing access to finance and improvement in working conditions at garment factories have made businesses confident of taking new challenges and boosting export earnings, said the editorial.
But despite all these good signs, Bangladesh economy embraces 2017 with some other challenges, including declining remittance and rising nonperforming loans from the domestic side, it observed.
The ICCB said volatile global and gulf region politics and troubled European economy pose as external threats.
Experts observed that Bangladesh may face formidable challenge in moving to a higher growth path of 8 per cent plus GDP and earn the status of a middle-income country.
The foremost challenge lies with the stagnant private investment followed by weak institutional capacity to implement development projects, said the ICCB.
According to the Asian Development Bank (ADB), the country will require a substantial increase in yearly investments from 29.0 per cent of GDP in FY2015 to 34.4 per cent by FY2020 to accelerate inclusive growth and reduce poverty and income inequality.
More than $11 billion in external resources will be needed during the plan period for public sector investment. Even though the public sector investment has increased to nearly 7 per cent of GDP from 5 per cent several years ago, the private investment remains static at 22-23 per cent for over five years.
Having its strategic location, Bangladesh has huge potential to attract more foreign direct investment (FDI) as the central point of eastern part of South Asia, being a connector between South and East Asia.
Increased private sector investment will allow the country to reap the benefit of annual world trade growth of $1 trillion under implantation of WTO Trade Facilitation Agreement.
