Bangladesh needs to boost its private sector investment for raising present GDP growth rate and make it more inclusive for attaining the Sustainable Development Goals (SDGs) by 2030, economists said on Wednesday.
They also said at present the government's investment model is not a sustainable one. The projects are not delivered timely, project costs increase multifold, and lack of accountability discourages private sector investment.
The observations were made at a press briefing of South Asian Network on Economic Modeling (SANEM) on '2nd SANEM Annual Economists Conference 2017' in the capital. Executive director of the organization Selim Raihan presented the conference outline at the briefing.
SANEM will organize the two-day conference on 18-19 February at Brac Centre Inn. The theme of this year's conference is 'Managing Growth for Social Inclusion'.
There will be 13 sessions, where 18 papers will be presented on six themes.
There will be a special session on 'Managing Growth for Social Inclusion in South Asia', where Professor Rehman Sobhan will be present as the guest of honour and Professor Wahid Uddin Mahmud will be the chair. There will be two SANEM-BIGD-IGC sessions, one SANEM-MCCI session, and one SANEM-DECCMA session.
About 150-200 local and 12 foreign participants from India, Nepal, Pakistan, Sri Lanka and UK are expected to take part in the programme.
Mr Raihan said per capita income does not project the real development of a country, rather quality of growth is more important. There are about 32 indicators, fulfillment of which indicates the real progress.
Citing examples of India and Bangladesh, he said Bangladesh has less per capita income, but it is well ahead of India in various social indicators. Bangladesh has more female participation in the labour market than India.
On the other hand, Nepal is well ahead in many indicators than Bangladesh with a comparatively lower per capita.
Although Bangladesh has done well in reducing poverty, there are two major challenges. Still a large number of people are in a vulnerable state, as a minimum increase in the poverty headcount ratio will push many below the poverty line, Mr Raihan said.
Besides, economic and social discrimination in the country is increasing day by day, and there is no indication or evidence of its decrease.
"If this fragility is not addressed, the benefit of growth cannot be enjoyed. Breakthrough is needed in fiscal and monetary policies to get rid of the present status-quo situation." Referring to the country's lowest tax-GDP ratio among the South Asian nations, Mr Raihan suggested that it is a political decision to increase the ratio.
Still Bangladesh could not develop any other export sector except the readymade garments (RMG), which could have employed more female labourers, he added.
The present growth is taking place due to more investment by the government in infrastructures. But a stalemate has been prevailing in private sector, which is 85-90 per cent of the total investment of the country.
Mr Raihan suggested three way-outs for overcoming the deadlock in private sector investment - infrastructural development, recovering from institutional weaknesses or lengthy process, and dispelling lack of confidence of private sector investors regarding political unrest.
He said Bangladesh will face major challenges in the next 15 years, as it will have to mobilize own resources to meet the SDGs by increasing tax-GDP ratio. Besides, there will be challenges in the trade regime during the neo-protectionism and post-Brexit era, as Bangladesh may lose many markets.
SANEM research director Sayema Haque Bidisha said Bangladesh has long been trapped into 6.0 per cent GDP growth. But it has to address other relevant issues to increase its GDP growth and attain higher economic targets.