The New Nation - Internet Edition

The World Bank report titled 'Bangladesh Second Investment Climate Assessment (ICA): Harnessing Competitiveness for Stronger Inclusive Growth'. The report identified the major problems of investment and economic growth of Bangladesh and suggested remedies. It evaluated the constraints faced by private sector and discussed how a more favourable business environment would promote stronger and faster economic development. The ICA found that continued economic growth has put pressure on certain important resources like electricity, finance, land and skilled labour. Poor resource allocation impedes growth of micro, small and medium enterprises in spite of their significant potentials for productivity gains, employment growth and poverty reduction. The same is the condition with most business organisations outside the Dhaka-Chittagong corridor. The WB report mentioned that large and old industrial units are able to procure basic facilities but smaller and younger ones are usually left behind. Even export processing zones in northwestern region could perform little due to inadequate availability of utilities including electricity. The report observed that the structure of the national economy had gradually been moving away from agriculture leading to a lopsided development of industrial sector that enjoyed a robust growth of 11.7 percent in the fiscal year 2007.

The report emphasised on infrastructure development including power generation on the basis of public-private partnership for faster economic growth. Mentioning weak financial markets as an obstacle to resource flow to smaller productive firms, the report recommended efficient resource allocation for those enterprises. The ICA emphasised on creating healthy investment climate for achieving seven to eight percent economic growths in place of the current average of six percent. The report suggested further improvement of infrastructure, governance, and the regulatory environment for attracting higher foreign capital flows. The report also underlined political stability and good governance as crucial factors for the healthy growth of private sector.

Ariful Huq

Dhaka