Challenges of GDP Growth in Bangladesh

Bangladesh has made some convincing progress with economic development during the years
since its independence. The responsibility of the Government will be to accelerate the pace of
past progress and put the economy in track for still faster economic growth. Once dubbed as a
bottomless basket, Bangladesh is now poised to become a middle income country by 2021. To
fulfil this income criterion, Bangladesh GDP will need to grow at an annual rate of at least 8
percent during the next 5 years. Achieving such a high growth rate and sustaining it at that level
in the face of the deep recession in the developed countries may not be an easy task, but building
on record of good economic performance in the past years as well as drawing on lessons from
weaknesses in certain areas of the economy the new Government should be able to adopt the
right policies and strategies that are needed to accelerate the pace of economic growth.

Investment climate in a country is the critical element for the future economic growth of a
country. Both fiscal and monetary policies along side transparency and governance determine the
future course which will guide the direct investments from both local and foreign investors. The
availability of proper infrastructure, utilities are as of similar importance as the availability of
efficient manpower (both in decision making process and in the labour). The growth in excess of
6% for consecutive last 10 years represent that Bangladesh is really poised to become a mid
income economy and among the top 20 countries in GDP per purchasing power parity soon.

Agriculture in broader perspective has been a great success story for Bangladesh. Be it in grains
production, fisheries, poultry products, dairy products et al. Despite reduction in arable land, the
success seen in agriculture is incredible. We have not only achieved self sufficiency in our main
staple rice but have become exporter of rice products. The key challenges surrounding
agriculture need urgent action towards meaningful and timely resolution include, among others,
the following : 1. The ease in availability of quality seeds; 2. The increase in renewable energy
for irrigation; 3. Land reform regulation; 4. The proper price allocation to farmers; 5. Further
smoothness and efficiency in channel of distribution with gradual removal of middle men etc.
The above will work as incentive in the agriculture sector for more productivity.

The active involvement and participation by women in productive work force is one of the major
pillars of success for the growth of GDP. Once put under the veils and meant for household
activities and bearing/rearing children our women have come a long way. The success of RMG
industry is primarily due to the women work force deployed in the RMG factories. The education
sector and health sector are sectors which cannot be thought without the active involvement of
women.

One of the major areas of impediment for bringing in proper investment climate is cost of doing
business. Though Board of Investment is working hard it is yet to achieve the desired results. In
competing countries like Vietnam, Sri Lanka, Laos etc, the one stop services provided by the
respective regulatory authorities have brought significant momentum to attract both domestic
and foreign direct investment. This needs to be reviewed in our case so that the associated costs
including delays are properly managed in order to remain competitive.
The higher rate of interest which the bank charges on their financing is certainly an area of
concern. Spreads is primarily derived through subtracting gross interest expenses from gross
interest income earned divided by Total Assets Portfolio of the bank. Under the present market
situation where there is excess liquidity, why then a number of banks fail to achieve this
guideline of keeping spreads lower than 5 per cent? The lesser demand for money has brought
down the interest rate of fixed deposit to almost a historical low position. Hence the Cost of
Deposit also mirrors the market expectations.

Health service is a basic right for any person. We have got a few five star hospitals in the capital
city where the equipments and doctors are of very high standard. However, the post operative
care comes nowhere near. But Dhaka is not only Bangladesh. The level of health care services in
the rest of the country barring a few places still is in a very rudimentary stage. The doctor to
patient ratio is another cause of alarm. Improving health services gets high priority for the
obvious reason of healthy nation.

Road congestion welcomes us every morning to our workplace adding stress to our already
stressful life. True that there are lots of developments in infrastructure or ongoing programs to
ease the traffic. Yet the traffic situation has remained in a stalemate. Dhaka, being the capital and
center of all activities, has to bear this overcrowded and overloaded situation. There is an
apparent fear any time Dhaka may implode due to this overburdened situation. The cost of fuel
burned due to this traffic adds to our economic woes on the one hand and eats our valuable man
hours on the other. The impact of this fuel emissions polluting our environment can't even be
calculated in monetary terms as the effect will be borne by generations to come. The mass public
transit system can relieve us from these complexities.

It is rightly said that in the coming days, the countries who will control source of sweet water
supply will be able to control the world. Being the largest delta, Bangladesh has her unique
advantage of so many rivers and water bodies. The challenges remain include the pollution of
water, navigability etc. Proper action plan encompassing dredging, stoppage of leakage of waste
products strategising to improve the quality of water in the drinking condition should get the
national priority.

The equality in the distribution of income is another key challenge. The problem lies when the
producer of goods/services do not get the proper share of the value addition. One of the key
national agenda is to ensure that the entrepreneurs must go for distribution of fair share to the
workers. This will enable the return in form of social justice, market stability and higher
productivity and efficiency.