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Bangladesh on right track of economic success: Experts
Experts from Bangladesh and Singapore stressed on how consistent Bangladesh’s economic growth has been and advised more on what needs to be done for further development.
This was part of a joint panel discussion between Singapore’s Institute of South Asian Studies (ISAS) and Bangladesh’s Cosmos Foundation at the Ballroom of the city’s Orchard Hotel on March 5.
The panel discussed the key challenges which are relevant not only to Bangladesh, but also to the South Asian region and the rest of the world.
It also shared its perspectives on various economic opportunities offered by the country.
Enayetullah Khan, Chairman of Cosmos Foundation, cited from his interview with the Chinese Foreign Minister, who said that Bangladesh is the bridge between China and India – which correctly defines Bangladesh’s role in Asia.
“At a point in time, when Bangladesh is powering ahead across a broad spectrum in socioeconomic activities, a lot remains to be done,” he said.
He also added that the panel discussion is an icebreaker on the issue of Bangladesh as an investment destination. “The result of the discussion should be an excellent example what we can achieve together.”
In his opening remarks, ISAS Chairman, Ambassador Gopinath Pillai, recollected memories of being part of the Singapore State Trading Corporation group which had established a garment factory in the early 1980s in Bangladesh, being one of the first foreign organizations to do so.
Drawing the anecdote of Henry Kissinger terming Bangladesh as a “bottomless basket”, he said that although such declarations affected investors, Bangladesh stood up to the occasion.
“Last year, I had visited Bangladesh with a few of my colleagues and had noticed a stark difference from what I had witnessed back in the 80s,” he added.
In order for Bangladesh to step up and develop further, he advised that the country’s vast population must be empowered, fed and educated. “The infrastructure calls for further improvement, and the nation’s intellectual resources must be channeled in the right direction.”
Md Mustafizur Rahman, High Commissioner of Bangladesh to Singapore, marked how Bangladesh’s economy had made remarkable progress in the last decade.
“The growth has been accompanied by a significant decline in poverty rate, increase in employment and greater access to health and education, and improvement in basic infrastructure,” he commented.
The high commissioner attributed this success to the RMG industry and sustained inflow of remittances.
“Bangladesh today is the 33rd largest economy in the world, in terms of purchasing power parity,” Mustafizur added, “other social indicators such as gender equality, women empowerment, mortality rate and such, are remarkably better compared to its other neighbours.”
He furthered that some challenges still persist, such as the population size, resource constraints, vulnerability to climate change, the Rohingya refugee crisis and others.
Mustafizur concluded by stating Singapore is a potential source country to attract Foreign Direct Investment (FDI) and for doing business.
“The impending visit of Prime Minister Sheikh Hasina to Singapore will add a new impetus to our existing bilateral relations,” he said.
Dr Iftekhar Ahmed Chowdhury, a former caretaker government adviser and Principal Research Fellow at ISAS, said that Bangladesh had successfully been able to negotiate preferential market access based on norms of spatial and differential treatment at major trade organisations like the World Trade Organisation (WTO) for its manufacturers.
Dr Chowdhury, who presided over the programme, said that Bangladesh transformed its economy over time from an agricultural one to a mainly manufacturing one.
As a foremost exporter of garment and pharmaceutical products, Bangladesh’s ever-spreading diaspora supports it with high remittance figures as well.
The successes of microcredit, non-formal education etc. emanated from the Bangladeshi soil and spread its ideas across the globe, Dr Chowdhury observed.
In terms of challenges, he pointed out the high population numbers and need for skilled employment for the youth as major blockades to development.
“Bangladesh is a country anxious to move forward,” he commented.
Dr Mashiur Rahman, Economic Adviser to Prime Minister Sheikh Hasina, said that any observer of Bangladesh can easily notice Bangladesh’s sustained growth and its acceleration of growth from 6 percent to a little over 7 percent.
“In order to reach middle income status, we have to increase that number further to 8 percent, which can be possible with efficiency improvement,” he said.
“Tax revenue has steadily increased, but the tax-GDP ratio is still low,” Dr Mashiur added. “But if you take into account the size of the country’s economy, its informal economy and the generous tax credits issued to businesses in the country, it is significant.”
Md Aziz Khan, Chairman of Summit Group, finds Bangladesh to be a “golden star” in terms of economic sustainability, adding that there is much to learn from Bangladesh’s success stories.
“Bangladesh has provided the first foundation and is an example in the world about how sustained democracy and free market economy can benefit a country’s economic development,” he said.
He stressed on more frequent public-private partnerships (PPP) which will benefit the country in the long run.
Rubana Huq, Managing Director of Mohammadi Group, recalled how she and her husband, late Annisul Huq, had started off their entrepreneurial careers in the RMG sector, and were able to be part of the race to RMG export supremacy.
“Transformative projects must include the construction of social capital in Bangladesh,” she advised, “and the need for more female entrepreneurs, which is currently only a handful in number.”
Md Abdul Halim, director general of the Governance and Innovation Unit at the Prime Minister’s Office’s, said that the government is ensuring key elements such as accountability of its departments and offices, and initiating performance review systems and reforms in the financial management system for better investment opportunities.
He also mentioned the Right to Information (RTI) Act, which was inspired by the objective of empowering citizens with the right to know how the government exercises its authority under the laws of the land.
Samantha Farahnaz, consultant at the Bangladesh Investment Development Authority (BIDA), said that Bangladesh may have excelled in its socioeconomic indicators, but in order to become an upper-middle income country by 2021 - increased contribution from the manufacturing sector, higher investment ratio to GDP and other issues need to be focused on.
“There is no form of discrimination against local or foreign investors,” she said, “Bangladesh has signed bilateral investment treaties with several countries, including Singapore.”
The Bangladesh government offers various forms of fiscal incentives for investors, which Samantha observed to be key motivators.
The closing remarks were made by Professor Subrata K Mitra, Director and Visiting Research Professor at ISAS.