DOT Desk: The return of the Awami League-led grand alliance to power through a landslide election victory is likely to continue and step up the country’s development and growth further, analysts said, reports The Daily Sun.
They further said it will help policy continuation which will eventually be conducive for
development and contribute to growth acceleration.
“The country’s growth rate increased from once 4-5 percent and 6 to 7 percent plus now.
The growth will get momentum in future with the continuation of power,” economic analyst Dr Zaid Bakht said.
“Policy continuation is very important for development as it will be helpful for growth and development,” he added.
With the AL victory in the 11th national election, the country’s development efforts are likely to get a boost as mega projects will have some positive impacts with faster implementation, the former BIDS researcher explained.
Awami League is going to take office for the third consecutive term with a vision to lead the country to a prosperous nation along with human dignity by 2041.
In its last 10 years’ rule, the nation witnessed a “transformative” socioeconomic progress, driven by favourable policies and pragmatic steps.
In the period, the country also saw 6.6 percent average growth against 5.1 percent global average that helped raise its status from a low-income LDC to a lower middle-income country ready to take off as a non-LDC country by 2024.
The growth rate climbed to over 7 percent rate in the last three consecutive years, while it hit 7.86 percent in the last fiscal year with per capita income rising to $1,751 from $759 10 years ago.
The government’s long-term Perspective Plan 2010-2021 and the sixth and seventh five-year plans were the driving force behind the success, according to analysts.
Economists think the increased public investment actually played the catalytic role in achieving the higher growth in the context of an apparently stagnant private investment. Public investment now reached 7.8 percent of GDP.
The size of total budget increased more than five times from Tk 890 billion to Tk 4,645 billion in the last 10 years while foreign exchange reserve increased more than four times from $7.5 billion to $32.2 billion.
A major development indicator was lowering poverty. The poverty rate has now come down to 21.8 per cent in 2018 which was 31.5 per cent in 2009 with extreme poverty rate slipping from a whopping 17.6 per cent to 11.3 per cent.
In the process of economic transformation, agriculture sector’s contribution to GDP, which has traditionally been large contributor, has weakened while the contribution of industry and service sectors is on the rise.
In the wake of achieving remarkable economic progress, time has now come to sustain the growth, Dr Zaid Bakht said.
He thinks that the key challenge for the new government is going to raise the quality of public investment alongside increasing private investment.
Improving physical infrastructure, energy sector and skill level of workforce, and human resource development, lowering poverty further and narrowing inequality will be the major challenged in the coming days, he listed.
Another eminent economic analyst Dr Zahid Hussain, lead economic at World Bank’s Dhaka office, said bringing back discipline to financial sector, rationalizing public investment plan, more revenue earning and reforms to public administration will be the major challenged for the new government.
The new government’s first priority should be streamlining the banking sector marred by rising non-performing loan, he observed. “The baking sector now needs a surgery as medicine did not work.”
Both borrowers and lenders should play a responsible role in lowering the bad loans. Besides, penalty should be more stringent to make them more accountable, according to him.
He suggested ensuring autonomy for the banking regulator alongside consolidating ailing fourth generation banks in such a way that monopoly is not created.
The government has to ensure that mega projects like Padma Bridge, metro-rail and construction of LNG terminals are complete during this tenure so that the people as well as economy get benefits of those, he noted.
The projects hurriedly approved on political consideration prior to the polls should be revisited, project management should be fixed and project priority should be set according to SDGs, he also suggested.
He said both tax policy and administration require reform to make them taxpayers’ friendly so that domestic revenue mobilisation increases, which is also pre-requisite to achieving SDGs.
Efficiency and accountability of the public administration should be enhanced through some reforms including introduction of performance based promotion and salary increase system, he suggested.
“In a government coming to power with a landslide victory can not bring reforms to the administration, then who’ll do this?” he said in a reply to a question whether it will be possible for the new government.