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Over the period of 2010-17, Bangladesh’s economic growth has been relatively less employment generating compared to the earlier decade. During this period, the contribution of demographic dividend in per capita growth got thinner. Benefits of growth is mostly reaped by the owners of capital; not the labour. It appears that Bangladesh has been passing through a period of ‘productivity revolution’ which calls for a quality check of growth data. Thus, policymakers should emphasise more on the nature of growth rather than its quantitative outcomes.
These findings were presented at a CPD media briefing titled “First 100 Days of the Current Government”. The event was held at CIRDAP Auditorium, Dhaka on 23 April 2019. The briefing was moderated by Dr Fahmida Khatun, Executive Director, CPD. Mr Towfiqul Islam Khan, CPD’s Senior Research Fellow made a presentation based on a report titled “The First 100 Days of the New Government: Tracking Electoral Pledges and Implications for the National Budget for FY2019-20”. Following the presentation, Dr Debapriya Bhattacharya, Distinguished Fellow, CPD; Professor Mustafizur Rahman, Distinguished Fellow, CPD and Dr Khondaker Golam Moazzem, Research Director, CPD, answered to various questions from the media.
CPD highlighted some other major challenges for the new government which need to be addressed in the upcoming budget. There is a need for balancing public expenditure among economic and social sectors. Health and education sectors receive much less than what is suggested in the 7FYP. The government also has to tackle challenges like reducing the reliance on national savings certificates. CPD report apprehended that there may be a shortfall of Tk 85,000 crores in revenue mobilisation during FY2019. CPD calls for urgent steps towards implementing the planned reforms related to revenue mobilisation. More specifically, CPD urged the government to clarify the proposed provisions under the new VAT and SD act well in advance.
One of the formidable economic challenges for the present government is to reform and rejuvenate the banking sector of Bangladesh. Recapitalisation of losing banks should be stopped. CPD re-emphasised its recommendation of forming a Banking Commission to identify the problems and make recommendations for the improvement of the sector.
CPD report also examined the situation of private investment and external sector. CPD urged for devising sectoral policies, targeted and predictable incentives, and initiating regulatory and institutional reforms. To boost the external sector, the government should implement promises made in their election manifesto like the export diversification, tapping of new markets, and provision of various government support, such as rebates in tariff, tax, VAT and cash incentives.
The briefing was attended by journalists from the print and electronic media.