Published in New Age on Wednesday, 15 May 2014.
Muhith blames Khaleda for economic downtrend
Experts say political uncertainty prevented fresh investment
Staff Correspondent
Finance minister AMA Muhith on Sunday indirectly blamed Bangladesh Nationalist Party chairperson Khaleda Zia for the economic downtrend in the country during the first-half of the outgoing fiscal year.
Frequent general strikes and vandalism last year caused insecurity among the businessmen, he said while speaking at a workshop.
He blamed Khaleda Zia and her ‘foolish policy’ for the widespread violence that disrupted economic activities and new investment.
Experts, however, told New Age that uncertainty over the political situation because of the lop-sided general election on January 5 was still persisting and preventing businessmen from making fresh investment in the country.
Economic Reporters’ Forum and World Bank jointly organised the workshop on the Development Challenges of Bangladesh at a local hotel.
The World Bank, International Monetary Fund and Asian Development Bank projected that the growth rate of the country’s gross domestic product in the outgoing fiscal year would be below 6 per cent.
WB said the GDP growth would hit 11-year low to 5.4 per cent after 5.26 per cent in 2002-2003 because of fallout from the political unrest in the first half of the year. It said due to the political unrest in the run-up to the January 5 national elections, the country incurred a value added loss of US$ 1.4 billion.
The government policy makers including Muhith, however, ruled out such projections saying the GDP would grow by 6.3 per cent.
Muhith lamented that the businessmen remained shy of investment despite substantial rise in investment by the public sector.
Overall investment which is now at 22 per cent should be 36 per cent for higher growth, he said, adding that pushing up private investment would be the biggest challenge in the new fiscal year.
Former caretaker government adviser Mirza Azizul Islam said uncertainty for fresh investment still persisted although the political instability was over. This was happening because of uncertainty over the political situation after the lop-sided election on January 5, boycotted by major political parties.
Centre for Policy Dialogue executive director Mustafizur Rahman echoed Mirza Aziz, saying that a consensus was needed among the political parties to get rid of the uncertainty.
Otherwise, economic growth would be hampered, he said.
Muhith identified that infrastructure was still a big problem for the country. He said power generation capacity increased to 11,000 megawatt, but the production capacity stood below 7,000 mw.
He said fund was not problem for upgrading the Dhaka-Chittagong highway to a four-lane highway. He blamed weak monitoring for the delay in implementation of the project.
Muhith lauded the current status of social safety net programme, but raised question about the quality of education. He blamed the monthly payment order system for the falling quality of education in the country.