CPD Distinguished Fellow Dr Debapriya Bhattacharya attended, as a Presenter, the launch of the Economic and Social Survey of Asia and the Pacific 2016 organised by UN Economic and Social Commission for Asia and the Pacific (ESCAP) at the capital’s IDB Bhaban on 28 April 2016.
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Published in The Financial Express on Friday, 29 April 2016
UNESCAP projects GDP growth at 6.8pc
‘Economy facing uncertainties’
FE Report
The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) projected Bangladesh’s economic growth at 6.8 per cent in 2016. The government set the growth target at 7.0 per cent for current fiscal (2015-16). The country’s gross domestic product (GDP) growth is also expected to pick up to 7.0 per cent next year (2017), said the ESCAP Economic and Social Survey of Asia and the Pacific 2016, released in Dhaka on Thursday. “It is more likely that growth may be about 6.8 per cent in line with the country’s growth performance in recent years and inflation is expected to remain low,” said Dr. Shuvojit Banarjee, Economic Affairs Officer, UN ESCAP, Bangkok, while presenting the survey report at a launching meeting jointly organised by the United Nations Information Centre and the UN Resident Coordinator’s Office in the city. The report, however, identified several mid-term challenges, including some external economic factors as well as political uncertainties. The ESCAP economist also said that growth might be pushed up further if these challenges are addressed accordingly. The report strongly suggested the need for reducing infrastructure and energy shortage, broadening the export base beyond garments and ensuring decent work conditions and labour rights. “The economic outlook for developing Asia-Pacific economies is broadly stable but clouded by uncertainties,” said the report adding that the impact of low economic growth in developed economies continue to linger in the Asia Pacific region. To overcome the difficulties, the report suggested the countries to strengthen efforts to stimulate domestic and regional demand, diversify the export base and strengthen agriculture giving emphasis on rural industrialisation. According to the survey, progress in reducing poverty is slowing down and inequalities are rising in much of the region. At the same time, an expanding middle class and rapid urbanisation are posing complex economic, social, and environmental and governance challenges. The region, the report said, also faces increased financial volatility and capital outflows which have limited the space for monetary policy maneuvering despite overall low inflation.
Centre for Policy Dialogue (CPD) Distinguished Fellow Dr Debapriya Bhattacharya also expressed his concern over the economic meltdown in developed countries that might affect the country’s export as well as remittance inflows. The rising interest rate in the US, Mr Debapriya said, might encourage outflow of capital from the countries of the region.
According to the ESCAP, a large share of population in Asia Pacific region is experiencing a decelerating trend in the rate of poverty reduction and similarly income inequalities have worsened in recent days. Faster growth in previous decades has resulted in a noticeable increase in the size of the middle class in many countries in the region. Rapid urbanisation also significantly raised the region’s exposure to natural hazards by exacerbating existing risks and creating new ones. Dealing with these challenges, the ESCAP said, requires government policies that, among others, would lead to development of necessary infrastructure and improve social support structures. Mr Debapriya also stressed the need for quick implementation of mega projects to attract private as well as foreign investments and called for taking immediate steps for improving labour productivity. “Labour quality, which includes knowledge and skills as well as health of the workforce must be ensured to have higher productivity,” said the economist adding that huge number of youths and women having higher secondary education remains unemployed as their education is not matching with today’s demand. He emphasised ensuring quality and relevance of education and reducing qualitative gap between education in urban and rural areas. He also called for adequate allocation for health and education in the next budget. UN Resident Coordinator in Bangladesh Robert D. Watkins presided over the launching programme which was attended by economists, government officials, NGO representatives, academicians and members from the civil society. UNIC Officer-in-Charge M. Moniruzzaman in his welcome speech pointed out various aspects of the survey that discussed the impact of recent economic slowdown in Asia Pacific region in terms of its effects on poverty, inequality and employment prospects along with challenges posed by expanding middle class and rapid urbanisation.
Published in The Daily Star on Friday, 29 April 2016
ESCAP forecasts steady growth for Bangladesh
6.8pc this year, 7pc next year
Staff Correspondent
The UN has predicted a steady economic growth for Bangladesh this year and the next year, but voiced concern over rising inequality and slow rate of poverty reduction.
The UN Economic and Social Commission for Asia and the Pacific (ESCAP) projected the country’s GDP growth at 6.8 percent in 2016 and 7 percent in 2017.
The prediction is based mainly on steady growth in employment, domestic consumption supported by lower inflation, higher remittances from workers and rising public sector wages, said Dr Shuvojit Banerjee, economic affairs officer of the ESCAP.
However, concern remains over rising inequality and slow rate of poverty reduction, he said at the launch of the Economic and Social Survey of Asia and the Pacific 2016 at the capital’s IDB Bhaban yesterday.
Referring to the survey findings, Debapriya Bhattacharya, distinguished fellow of the Centre for Policy Dialogue, said the country’s GDP growth is fine, but it may not benefit the poor.
One-third of the country’s population is poor, given the daily per capita income of $1.25. But the proportion of the poor might go up to 40 percent if the new measure of daily per capita income of $1.9 is considered, he said.
ESCAP’s annual report analysed the region’s economic and social status and its link to the changes in the global scenario characterised by low oil prices and economic slowdown in Euro zone, China and Japan.
In a separate chapter on Bangladesh, it said garment export, which accounts for more than 80 percent of the country’s total exports, was sluggish on subdued orders from Europe and lower cotton prices.
“Despite favourable workers’ remittances, strong import demand and tepid export of goods pushed the current account balance into a deficit of 0.8 percent of GDP in 2015, the first shortfall in three years,” the report said.
On the downside, it said, high non-performing loans could constrain the growth of bank loans, while there are challenges of low productivity and low investment.
Debapriya said Bangladesh’s export market faces challenges due to continued economic slowdown in developed countries and the refugee crisis that might lead to diversion of foreign aid.
If the downturn lingers, it would affect Bangladesh that heavily relies on exports to developed countries. Besides, countries such as Laos and Cambodia may become more competitive than Bangladesh.
“Capital outflow would be towards the US if it raises interest rates. In that case, the capital that could be invested here would be flowing to the US,” he said.
Debapriya said the authorities should put emphasis on quality education that matches the labour market demand. There is a need for increasing investments to create more jobs and raising budgetary allocations for health and education sectors.
Shuvojit observed that income inequality in Bangladesh is going up.
In Bangladesh, the poor earn less than $2 a day while the high income group earns more than $20, according to the report.
The emerging middle class is “very vulnerable to falling back into poverty due to shocks such as a persistent decline in economic growth and employment prospects, disease in the family or loss of the main breadwinner and natural calamities”, it said.
Shuvojit suggested several measures such as increasing government revenue by direct tax, higher and targeted fiscal spending, creating an environment conducive to investment and focusing on enhancing agricultural productivity.
UN Resident Coordinator Robert Watkins said the government should diversify the economy to create more jobs and take advantage of a huge number of working-age people in Bangladesh.
Published in New Age on Friday, 29 April 2016
ESCAP reports rising inequality amid steady economic growth
Projects 6.8pc GDP growth this FY
Staff Correspondent
Bangladesh has achieved a steady economic growth of more than 6 per cent in the recent years, but the distribution of its benefits has remained unequal with the well-off enjoying the most, economists said on Thursday.
The progress in poverty reduction is slowing down and inequalities are rising, while demographic pressures, an expanding middle class, and rapid urbanisation are posing complex economic, social, environmental and governance challenges in the country, they said in the report launching ceremony of the ‘Economic and Social Survey of Asia and the Pacific 2016’ at IDB Bhaban in the city.
In the study report, the United Nations Economic and Social Commission for Asia and the Pacific said the economic outlook for the developing Asia-Pacific economies is broadly stable but is clouded by uncertainty.
The survey was conducted simultaneously in 24 countries across the Asia-Pacific region. The year-end update on the survey will be released in November 2016.
‘The economic growth of Bangladesh is fine, but the poor may not benefit,’ Debapriya Bhattacharya, distinguished fellow at the Centre for Policy Dialogue, said in the event.
One-third population of Bangladesh is still poor, he said, adding in a country with one-third poor people, what type of economic policy should we think about?
The ESCAP report said the number of poor in the region has not declined in recent years as fast as previously and the benefits of economic growth have increasingly been enjoyed more by the well-off members of the society than the poor.
Debapriya said an expanding middle class has emerged in the country due to rapid urbanisation, which has created a section of higher low-income people in the society.
‘Higher low-income people are the most vulnerable as they have no social protection. They demand a bit higher quality of public services and higher quality of domestic purchasable goods, whereas Bangladesh economy is not responding to them,’ he said.
Market has failed to respond to their demands as investment has not been taking place for certain reasons, Debapriya said.
He said the number of educated unemployed has increased in the country, which is paradoxical, as it is supposed to be the opposite.
‘The education we are getting does not match the demands,’ Debapriya surmised.
According to the ESCAP survey report, the relatively strong economic growth witnessed in the Asia-Pacific region over the last few decades was driven primarily by factor accumulation, that is, by increases in the labour force and the capital stock through investment, including from abroad.
‘ Nevertheless, significant increases in productivity, particularly in labour productivity, also took place throughout the region, such that the gap in the level of labour productivity with developed economies has roughly been halved: labour productivity in the developed economies was about 12 times higher than that in the Asia-Pacific region in 2013 compared with 24 times higher in 1990,’ it said.
To boost productivity, the report recommended a cross-sectoral and integrated approach.
It noted that several countries in the region are deindustrializing too early in their development, by shifting from agriculture-based economies to ones in which services play a dominant role.
According to the report, strengthening the role of agriculture along with rural industrialization is vital not only because agriculture accounts for one in four workers and because 55 per cent of people in the region live in rural areas, but also because greater labour productivity in agriculture would enable higher incomes in the rural sector.
The report said a modest increase in agricultural productivity could lift an additional 110 million people out of poverty by 2030, but that improvements in knowledge and skills will be critical to enable absorption of the large pools of surplus labour that are being released from the rural sector.
The ESCAP projected a 6.8 per cent economic growth in 2016 and a 7 per cent growth in 2017 for Bangladesh.
‘Our projection of economic growth for Bangladesh is near to the government estimation and we think the growth will come from the domestic side,’ said Shuvojit Banerjee, economic affairs officer at UN ESCAP.
He said if any external problems do not take place, the growth would increase a bit.
In a video message, ESCAP executive secretary Shamshad Akhtar “emphasized steady growth in real wages, which is critical for tackling poverty and inequality, as well as supporting domestic demand which also ultimately depends on productivity growth.
She said concerted efforts are needed to revive the region’s economic dynamism and to pursue the 2030 Agenda more effectively.
Such interventions, particularly through fiscal measures, could support not only domestic demand but also strengthen the foundations for productivity-led growth, while fostering real demand through social safety nets and wage increases, Shamshad said.
Published in প্রথম আলো on Friday, 29 April 2016
এবার প্রবৃদ্ধি হবে ৬.৮ শতাংশ: এসক্যাপ
নিজস্ব প্রতিবেদক
চলতি অর্থবছরে বাংলাদেশের মোট দেশজ উৎপাদনের (জিডিপি) প্রবৃদ্ধি ৬ দশমিক ৮ শতাংশ হবে বলে পূর্বাভাস দিয়েছে জাতিসংঘের এশিয়া ও প্রশান্ত মহাসাগরীয় অঞ্চলের অর্থনৈতিক ও সামাজিক কমিশন (এসক্যাপ)। সংস্থাটি তাদের অর্থনৈতিক ও সামাজিক সমীক্ষায় এ প্রাক্কলন করেছে। যদিও বাংলাদেশ সরকার বলছে, এ বছর প্রবৃদ্ধির হার হবে ৭ দশমিক শূন্য ৫ শতাংশ।
বাংলাদেশসহ ২৪টি দেশে গতকাল বৃহস্পতিবার এসক্যাপের প্রতিবেদনটি প্রকাশ করা হয়। এতে বলা হয়, স্থিতিশীল হারে কর্মসংস্থান বাড়ার কারণে মানুষের খরচের প্রবণতা বাড়ছে, যা অভ্যন্তরীণ চাহিদা বাড়াতে সহায়তা করছে। এ ছাড়া নীতি সুদের হার ৫০ শতাংশীয় পয়েন্ট কমানোর ফলে ঋণপ্রবাহ বাড়বে। অবশ্য মন্দ ঋণ ব্যাংকের ঋণপ্রবাহ বৃদ্ধিতে বাধা তৈরি করতে পারে বলে সতর্ক করে দিয়েছে সংস্থাটি।
এসক্যাপের সমীক্ষায় ৫২টি দেশের জিডিপির প্রবৃদ্ধির প্রাক্কলন তুলে ধরা হয়েছে। এদের মধ্যে পাঁচটি দেশ প্রবৃদ্ধির হারের দিক দিয়ে বাংলাদেশের চেয়ে এগিয়ে থাকছে। দেশগুলো হলো মিয়ানমার ৮ দশমিক ৫ শতাংশ, উজবেকিস্তান ৭ দশমিক ৮ শতাংশ, ভারত ৭ দশমিক ৬ শতাংশ, কম্বোডিয়া ৭ শতাংশ ও লাও পিপলস ডেমোক্রেটিক রিপাবলিক ৭ শতাংশ। অন্যদিকে প্রতিবেশীদের মধ্যে পাকিস্তানের ৪ দশমিক ৫ শতাংশ ও শ্রীলঙ্কার ৫ দশমিক ৪ শতাংশ প্রবৃদ্ধি হবে।
এসক্যাপের প্রতিবেদনটি প্রকাশ উপলক্ষে ঢাকার আইডিবি ভবনে এক অনুষ্ঠানের আয়োজন করে জাতিসংঘ তথ্য কেন্দ্র (ইউএনআইসি)। এতে জাতিসংঘের আবাসিক সমন্বয়কারী রবার্ট ডি ওয়াটকিনস উপস্থিত ছিলেন। অনুষ্ঠানে মূল প্রতিবেদন উপস্থাপন করেন ইউএন এসক্যাপের অর্থনীতি-বিষয়ক কর্মকর্তা সুভজিৎ ব্যানার্জি। সেন্টার ফর পলিসি ডায়ালগের (সিপিডি) বিশেষ ফেলো দেবপ্রিয় ভট্টাচার্য অনুষ্ঠানে বক্তব্য দেন। এ সময় জাতিসংঘের আন্ডার সেক্রেটারি শামসাদ আক্তারের একটি ভিডিও বার্তা পেশ করা হয়।
সুভজিৎ ব্যানার্জি বলেন, চলতি অর্থবছরে যে হারে জিডিপি প্রবৃদ্ধি হয়েছে, সেভাবে বৈদেশিক বিনিয়োগ আকৃষ্ট করা সম্ভব হয়নি। মূলত অবকাঠামো উন্নয়নের অভাবে দেশে বিনিয়োগ আকর্ষণ করা সম্ভব হচ্ছে না।
এসক্যাপের প্রতিবেদনেও বিষয়টি উল্লেখ করা হয়েছে। এতে বলা হয়, বিগত বছরগুলোতে ভালো করলেও বাংলাদেশের সামনে মধ্যমেয়াদি কয়েকটি চ্যালেঞ্জ রয়েছে। এগুলো হলো অবকাঠামো ও জ্বালানি সংকট, রপ্তানি আয়ে এক পণ্যের ওপর নির্ভরশীলতা ও ভালো কর্মপরিবেশ এবং শ্রমিকের অধিকার নিশ্চিত করা।
প্রতিবছর এসক্যাপ একেকটি বিষয়কে প্রতিপাদ্য ধরে অর্থনৈতিক ও সামাজিক সমীক্ষা প্রতিবেদন তৈরি করে। এবারের প্রতিপাদ্য উৎপাদনশীলতা বৃদ্ধি। এসক্যাপ মনে করে, ২০৩০ সালের মধ্যে টেকসই উন্নয়ন লক্ষ্যমাত্রা (এসডিজি) অর্জনের জন্য উৎপাদনশীলতা বৃদ্ধি জরুরি। এর পাশাপাশি সামগ্রিকভাবে দেশগুলোকে লক্ষ্যভিত্তিক ব্যয়, দক্ষতা বৃদ্ধি, অবকাঠামো উন্নয়ন ও কৃষির উৎপাদনশীলতা বাড়ানোর তাগিদ দেওয়া হয়েছে অর্থনৈতিক ও সামাজিক সমীক্ষায়।
রবার্ট ওয়াটকিনস বলেন, ‘আমরা এত দিন ধরে যা বলে আসছি, তা করার জন্য এসডিজি সুযোগ করে দিয়েছে।’
দেবপ্রিয় ভট্টাচার্য বলেন, বাংলাদেশের শ্রমের উৎপাদনশীলতা দক্ষিণ এশিয়ার তুলনায় ভালো হলেও স্বল্পোন্নত অনেক দেশের তুলনায় কম। এর অন্যতম কারণ শিক্ষা, শ্রমিকের স্বাস্থ্যের নিম্নমান। এর সঙ্গে অবকাঠামো সংকট তো রয়েই গেছে।
এসক্যাপের প্রতিবেদনে বলা হয়েছে, দেশগুলোর গড় প্রবৃদ্ধি হবে ৩ দশমিক ৫ শতাংশ। স্বল্পোন্নত দেশগুলোর প্রবৃদ্ধি হবে ৬ দশমিক ৪ এবং দক্ষিণ ও দক্ষিণ-পশ্চিম এশিয়ার দেশগুলোর গড় প্রবৃদ্ধি হবে ৫ দশমিক ৯ শতাংশ। প্রতিবেদনে আগামী বছর বাংলাদেশের ৭ শতাংশ প্রবৃদ্ধির প্রক্ষেপণ করা হয়েছে।
দেবপ্রিয় বলেন, ‘বাংলাদেশে একটি বিকাশমান মধ্যবিত্ত শ্রেণি গড়ে উঠছে। তারা সুশাসন দাবি করছে, গুণগত মানসম্পন্ন পণ্য দাবি করছে। এ পণ্য উৎপাদন সম্ভব। এ সুযোগ কাজে লাগাতে পারলে অর্থনীতিতে বৈচিত্র্য আসত। কিন্তু আমরা সেটা পারছি না।’