The New Nation - Internet Edition

Staff Reporter

The country's economy may face downturn in the near future if the nature of private sector credit flow is not changed from the present trading bias to productive sector, according to business leaders and economists.

" Poverty reduction, employment opportunity and economic growth will be highly hampered if there is no investment in industrialisation," former FBCCI president aid Mir Nasir Hossen told The New Nation yesterday.

He said the government has to take steps to encourage people for investing in the productive sector to remove stagnation in this area.

During the first five months of the current fiscal year private sector credit growth rose by 50 per cent to Tk 11,551 crore driven by growing demand from import and agriculture business.

Bangladesh Bank Governor Dr Salehuddin Ahmed recently expressed disappointment as the private banks like to finance short term trading instead of long-term industrialisation.

Prof Abu Ahmed of University of Dhaka said People do not want to take risk in this political situation, he said.

He said most of the potential investors are now either staying abroad are inside prison. The remaining investors have no capacity for new investment, he added.

Asking to bringback confidence among people and businessmen Dr Abu Ahmed said the government should free the 'corrupt businessmen' through the truth commission and confiscating their ill gotten wealth.

Prof Dr Ali Taslim of University of Dhaka said lack of investment in the productive sector will put negative impact on country's economy as future prosperity and growth will be decreased.

"People are yet to get back business confidence and are not going for new investments," he said adding this will also trim down the pace of poverty reduction.

"New investment is a big decision. If people do not get positive reading on future environment they will not be encouraged to invest."

Dr Taslim emphasised on bringing back confidence among businessmen and asked the government to remove bureaucratic red tap, reduce bank interest rates and give a clear view of future business climate.

Praising the government for forming better business forum he said business climate should be improved for new investment.