Atiur blasts BBS estimate on agri growth

28 May 2010, 18:00 PM

Staff Correspondent

Bangladesh Bank Governor Atiur Rahman yesterday criticised an estimate of the Bangladesh Bureau of Statistics (BBS) that the growth in agriculture declined by almost half in the current fiscal year. "The BBS estimate has no practical basis," he said while delivering a lecture at the conference hall of the Faculty of Business Studies of the Dhaka University. The central bank chief said he is skeptical if the BBS has any methodological mistakes or received accurate information on agriculture productivity. BBS early this week finalised the provisional account of gross domestic product (GDP) where it said the growth rate in crop sector was 2.20 percent this fiscal year, down from 4.02 percent last year. BBS officials said the main contributor to the crop sector is rice. In the last fiscal year crop sector saw a bumper production of rice of around three crore tonnes. Although Aus crop was hampered this year, the harvest is expected to be around three crore metric tons. As the production remained the same, the crop sector did not rise, they said. However, Atiur Rahman said the government provided more subsidies to agriculture, while more credit facilities were provided to the farmers. "So, the growth must be higher than that of last year." There was some crop damages due to flash floods in the haor areas, but it is very minimal, he said. Under the Agrani Bank Lecture Series 2010 organised by the Dhaka University, Atiur Rahman delivered his lecture titled 'Financial Services at People's Doorstep'. Former governor of the central bank Dr Salehuddin Ahmed lectured on 'Inflation: A challenge to South Asia's Economic Progress', and Center for Policy Dialogue Executive Director Dr Mustafizur Rahman on 'Towards Strengthened Regional Economic Integration: A window of opportunity for Bangladesh.' Dr Atiur Rahman highlighted a series of initiatives the BB has taken to reach credit facilities to the poor. Stating that micro-credit financial organisations made significant contributions to reach credit to the poor, he said there are, however, questions about their high interest rates and not reaching the hardcore poor who have no ability to repay. The micro-credit organisations will face troubles unless they address these criticisms, Atiur Rahman said. Dr Mashiur Rahman, economic affairs adviser to the prime minister, said it is extremely important to make credit easily accessible to the people, but too easier conditions for credit may cause difficulties. He referred to sub-prime mortgage issue and recent collapse of banking sector in the developed economies. Dr Salehuddin said inflation mostly affects the poorer section, and to smartly regulate inflation, authorities should monitor its long-term trends and both internal and external factors that contribute to it. Mustafizur Rahman said China and India will be the major economies in the 21st century, and Bangladesh being their neighbours must take its advantage by integrating with these countries. Connectivity with the countries, therefore, is very important, he said. Dhaka University Vice Chancellor Professor AAMS Arefin Siddique, Pro-vice Chancellor Dr Harun-Or-Rashid, Business Studies Faculty Dean Dr Abbas Ali Khan, Treasurer Dr Mizanur Rahman and Agrani Bank Chairman Dr Khandaker Bazlul Haque also spoke.