The New Nation - Internet Edition

IT is for a simple universal realisation that has dawned that the smaller the role of the government in the economy, the better the prospect for efficient use of scarce resources which ought to be every economist's goal. Following this principle, Bangladesh has been striving to achieve private sector-led economic growth for over three decades. This has led to the transformation of its economy remarkably. The state sector has considerably shrunk and the economy has added substantial sinews to it and diversified under the private sector. Nonetheless, it is acutely felt by private sector entrepreneurs in different fields that they could achieve a great deal more if only they were better supported in their endeavours by official policies and facilities in place.

The Asian Development Bank (ADB) issued a statement some time ago about properly aiding the private sector. The ADB identified poor power supply as the single-most important infrastructure constraint to private sector development. Power is the basic requirement for industries. But the gap between the demand for power and its availability has been widening alarmingly in the country with negative consequences for the latter. Many industrial investments are on stream but these could hit snags after going into operation if new generation capacities are not added. The rate of new industrial investments would be also surely adversely affected by the dwindling power supply. All government plans to increase power generation must be speedily completed. The private sector has been allowed to generate power on a limited basis. But generation of power in the private sector remains on hold for government not extending assurances about the sale of this power. This uncertainty must be overcome at the soonest to increase private sector involvement in power generation. The availability of the other main source of energy, natural gas, must also increase. There are also other infrastructural bottlenecks of significance such as inadequacy of roads and telecommunications. The establishment of these in greater number can be supportive to private investment. Expansion of ports, their modernisation and improvement of their handling capacities are badly needed.

Private initiative is encouraged when government policies are seen as favourable over the long term. Withdrawal of tax breaks, high rate of interests on borrowings, skewed tariffs that favour imported products over their local substitutes, high rate of corporate taxes and other fiscal and monetary policies that do not assure potential investors about long-term dependability on them for the viability of the enterprises they wish to build, come as disincentives to entrepreneurship. Thus, it needs to be a singular aim of the government to create and sustain a policy environment that can truly keep the private sector interested and going on the path of entrepreneurship.