DHAKA: Nine major challenges, including political instability and infrastructure bottlenecks, have caused to the slow economy, the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) identified it and urged the government to resolve those immediately here the other day.
The chamber also put forward a number of specific recommendations, with a fervent appeal for reaching a political consensus and putting an end to violence, blockade and hartal, to put the economy on a higher growth trajectory.
The chamber leaders conveyed the challenges to Finance Minister AMA Muhith when they met him at his Secretariat office on Thursday.
They urged him to adopt and implement right policies and strategies to achieve speedy economic development.
Newly-elected MCCI president Nasim Manzur led the 13-member delegation of his executive committee to the meeting.
The MCCI leaders said political stability should be maintained at any cost to achieve the government’s growth target. They urged the Finance Minister to take measures to bring the opposition to dialogue.
The Finance Minister, however, tactfully avoided the plea, saying that when dynamics of the economy becomes active, hartal does not matter.
“Political parties by all means must come to a consensus and stop violence, blockade and hartals which severely affect business and employment,” said Mr Nasim in a written memorandum to the Finance Minister.
Besides political stability, they identified inadequate infrastructure, stagnant investment and low savings, slow progress in economic governance, fiscal deficit, narrow export basket and high bank interest as some of the major obstacles that hinder the country’s economic activities.
Despite resilience and growth performance of the economy as was shown in many indicators in recent past, Bangladesh still faces many ongoing challenges arising out of domestic and international environment, which impede faster growth of the economy, said Mr Nasim Manzur in his introductory speech.
To achieve the status of a middle income country by the year 2021, Bangladesh has to meet a number of challenging tasks to structurally transform the economy for higher growth, he pointed out.
The country needs to achieve 8-10 per cent GDP growth rate within the next 6-7 years to achieve the Vision 2021. “But the country will not be able to achieve the status at the current GDP growth rate of 6 per cent,” said Mr Nasim Manzur.
To achieve the goal, investment must be increased by about 35-40 per cent of GDP from its current level of 28.7 per cent, he said.
Since investment largely depends on savings, hence, domestic savings now hovering at around 23.4 per cent GDP should be increased. He urged the government to augment public savings through improving government revenue collection and reducing non-development expenditures.
The chamber leaders also expressed their dissatisfaction over high cost of bank borrowing and the role of the central bank.
They urged the government to reduce bank interest rate as well as find out a way-out as to how to reduce interest rates of savings instruments without hurting the pension holders.
They also criticised the central bank for interfering in the micro-management issues which they said are hampering the main activities of the bank which they termed as ‘the bank of the government’.
The chamber leaders said shortage of energy, both power and gas, are taking its toll on production in the country’s industrial sector.
Many industrial units are running well below their production capacity because of power and energy short supplies they said urging the government to solve the problem by setting up additional pipes and import of LNG (liquefied natural gas).
The minister, however, assured them that the problems would be solved after setting up of a LNG terminal at Moheshkhali Island in the Bay of Bengal as part of a plan to import liquefied natural gas from the Gulf state of Qatar.
But he expressed his dissatisfaction over the slow process of tender. The government has recently invited the second tender for setting up the terminal as the first one received very poor response. This irked the minister.
To overcome the scarcity of land, the MCCI leaders urged the government to use the unused lands of jute and textile mills, both in public and private sectors, which will solve the problem substantially as, according to them, there remain huge idle lands.