Economy advancing, but challenges remain

Bangladesh’s economy has performed admirably over the last several years, and last year the growth registered 8.1 per cent which is the highest in the South Asian region. This was possible because the country witnessed a largely politically stable situation which permitted the government to pursue its economic policy in a congenial atmosphere. Fundamentally important during this time was that the government had a pragmatic vision of economic goals. As country’s infrastructure has improved particularly in terms of electricity and communication, dividends of this are coming firmly. But the economic policy makers in Bangladesh would do well if they pay heed to the critics of this development.

First of all, the banks of the country are mired in difficulties: the number of private loans has dropped, liquidity crisis has deepened, and a cap on the deposit and lending rates has not produced the desired results. Overcoming the problem in the banking sector was indeed a major challenge for the government in the past years as it is still now. Had the banks performed more robustly Bangladesh’s economy could have done even better.

Next, there is criticism that all people in Bangladesh are not enjoying the benefits of economic development. This means that economy is not growing in a balanced way. Indeed according to a report published by the World Bank several months back, still one is every four in Bangladesh live below the poverty line. Bangladesh in the decades after liberation in 1971 has made tremendous success in terms of poverty alleviation, but a lot still needs to be done to help a great number of people come out of their poverty. Therefore, it is necessary to frame economic policy that can trigger balanced economic development. If more people fail to come out of their poverty cycle, societal peace would be disturbed.

There is also a line of criticism that the story of Bangladesh’s economic growth was akin to a kite not attached to its string and spool and the data on GDP growth show no connection with reality. While this criticism is certainly exaggerated, to keep up the present growth sustainable remains a major challenge for the government.

 

Economy advancing, but challenges remain

Bangladeshs economy has performed admirably over the last several years, and last year the growth registered 8.1 per cent which is the highest in the South Asian region. This was possible because the country witnessed a largely politically stable situation which permitted the government to pursue its economic policy in a congenial atmosphere. Fundamentally important during this time was that the government had a pragmatic vision of economic goals. As countrys infrastructure has improved particularly in terms of electricity and communication, dividends of this are coming firmly. But the economic policy makers in Bangladesh would do well if they pay heed to the critics of this development. First of all, the banks of the country are mired in difficulties: the number of private loans has dropped, liquidity crisis has deepened, and a cap on the deposit and lending rates has not produced the desired results. Overcoming the problem in the banking sector was indeed a major challenge for the government in the past years as it is still now. Had the banks performed more robustly Bangladeshs economy could have done even better. Next, there is criticism that all people in Bangladesh are not enjoying the benefits of economic development. This means that economy is not growing in a balanced way. Indeed according to a report published by the World Bank several months back, still one is every four in Bangladesh live below the poverty line. Bangladesh in the decades after liberation in 1971 has made tremendous success in terms of poverty alleviation, but a lot still needs to be done to help a great number of people come out of their poverty. Therefore, it is necessary to frame economic policy that can trigger balanced economic development. If more people fail to come out of their poverty cycle, societal peace would be disturbed. There is also a line of criticism that the story of Bangladeshs economic growth was akin to a kite not attached to its string and spool and the data on GDP growth show no connection with reality. While this criticism is certainly exaggerated, to keep up the present growth sustainable remains a major challenge for the government.