Corruption, malpractice and lack of rule of law are hindering good governance process and economic growth
Lenin Rahman: The issues of good governance would be the major challenge for the new government which is hampering to attain the expected level of economic growth of the country, said the economists and the civil society members. They have underscored the need for ensuring good governance for becoming mid-income status country during the tenure of the present government.
Talking to the Daily Industry, Shusashoner Jonno Nagorik (Shujan) Secretary Badiul Alam Majumdar yesterday told that governance, good governance and development are three interrelated issues for Bangladesh. Although, the country has attained a tremendous success in economic as well as social development but it is still lags behind good government issues, Majumder mentioned.
Corruption, malpractice and lack of rule of law are hindering good governance process as well as economy of the country, Badiul Alam claimed.
“Of course, the new government has to undertake holistic approach to increase private investment inflow in the country”, said Badiul Alam Majumder.
Apart from this, the government has to take rigid steps to prevent money laundering to make the economy vibrant. He suggested for reducing the default loan to attain sound financial sector which would help bringing higher economic growth. “No government have the right to misuse public money”, he said.
DR. AB Mirza Azizul Islam claimed lack of good governance is hindering economic growth of the country. “If we want to achieve mid-income status country, the government has to ensure good governance factors”, Islam said.
The current private investment and FDI inflow are not adequate said Islam adding infrastructure development and skilled manpower are must to get mid-level status country.
The government has to undertake ensure a healthy banking sector in this regard. Currently, the sector is facing a severe crisis for NPL which is foiling soundness of the financial sector.
The newly formed government has to take initiative to stop political consideration loans to reduce NPL from banking sector. According to sources, now, the amount of NPL is over 1.33 lac crore.
However, the proper implementation of Annual development programme (ADP) can ensure a mid-income status country during the regime of the present government, added Azizul Islam..
On the other hand, the government has to create more business-friendly environment across the country for generating employment and getting higher economic growth. Diversification of export basket, improvement in investment climate by developing power supply, port operations and regulations and access to long-term finance for achieving the growth are the major challenges for the new government, Azizul Islam pointed out.
However, according to Global Economist Forum (GEF), more industrial output is needed to become mid income status for Bangladesh. Bangladesh needs over than 8 percent growth until 2030 to become a mid-level status country with political stability and bumper food grain production, said the global forum. Market exploration, product diversification, diplomatic efficiency, skilled manpower, value added product making could help to achieve 8 percent GDP.
However, the experts opined that the present major economic indicators are not in a positive trend despite its growth to consider the latest data of the central bank. Country’s forex reserve is mainly depend on remittance but the growth did not come to the expected level due to declining trend in recent years inward remittance. Thousands of workers are forcing to back in the country from Middle-Eastern countries, Saudi-Arabia and Malaysia due to lack of professional efficiency, proper initiative by the government and effective role of diplomatic missions.
According to latest data released by the Bangladesh Bank, the expatriates remitted $15.54 billion in 2018, a jump of 14.79 percent over 2017. Bangladesh Bank’s foreign currency reserve was $30.99 billion as of Sunday. Country’s reserve is able to meet the import payments for 7 to 10 months which is not adequate to attain the real graduation of a mid income status. The reserve of China is $350 trillion which is $400 billion in the neighbouring India.
Meanwhile, around 1.0 million foreign workers in Bangladesh especially in the field of RMG and NGO are repatriating around $10 billion every year as salary.
On the other hand, huge trade gap is one of the major concerns for the economists. The current trade gap is over $15 billion. Bangladesh is a consumer country and depends on import for its industrialisation. Due to lack of strong backward linkage industries, stakeholders are forcing to import for their production.
Country’s almost 85 percent export earnings are coming from the RMG sector but the stakeholders are failing to export in the non-traditional items and new markets. Diplomatic failure is the main reason behind earning the export target as well as exploring new potential markets.
Dr. Salehuddin Ahmed,former Bangladesh Bank Governor said that Bangladesh needs huge FDI for becoming a middle-income country as well as attaining the target of Sustainable Development Goals (SDGs). Keeping inflation within expected level, more local and foreign investment could help achieving the GDP target, Ahmed pointed out.