Bangladesh ‘needs to address hurdles’ for higher growth
Dhaka: 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.
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 (ICC, B) in its latest news bulletin editorial shared with news agency UNB on Thursday.
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 percent 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 ICC,B 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 country's economy has been one of the top performers in Asia over the past few decades, averaging an annual growth of more than 6 percent.
According to analysts, Bangladesh, now a $220 billion economy, is moving forward with mega development projects, including US$ 3.7 billion Padma Bridge, US$ 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 ICC, B 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 percent 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 ICC, B.
According to the Asian Development Bank (ADB), the country will require a substantial increase in yearly investments from 29.0 percent of GDP in FY2015 to 34.4 percent 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 percent of GDP from 5 percent several years ago, the private investment remains static at 22-23 percent 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 US$1 trillion under implantation of WTO Trade Facilitation Agreement.