Editorial
Good economic growth, but can be better
Domestic investment constraints must be mitigated
Traffic congestion and the poor condition of roads are taking a toll not only on the people but also on the economy. According to a recently released World Bank report, although Bangladesh's economic growth is healthy in the context of unfavourable global conditions at a projected 6 percent -- the government forecast is a more ambitious 7.2 percent -- the country is performing below its potential.
The key reasons behind this have been identified as weak external demand and, more within the country's control, domestic investment constraints. Hindrances to investment include the deteriorating condition of roads and ports which cause major delays in export-import business and shortage of gas in manufacturing industries. While power generation has increased in the last two years, the demand-supply gap remains high and, according to the WB, while rental power plants have a short-term positive impact on growth, they are expensive and longer-term solutions are required. In addition, the poor situation of governance at state-owned commercial banks and underutilisation of development projects have also been identified as factors hindering investment and, in turn, growth.
Despite Bangladesh's political instability over the years, not to mention the global recession which has hit hard economies around the world, the country has demonstrated a steady growth rate thanks to remittance, declining inflation and international commodity prices and a tight monetary policy. And, as statistics have shown, it can do even better, with major infrastructural and some policy reforms going a long way.
We would encourage the government to consider these latest reports on the country's economic growth and take appropriate measures. While all the solutions are long-term and will be costly, the benefits reaped, too, will be for the long run, and contribute to the strengthening of Bangladesh as a competitor in the global market and to its growth as a bigger, better economy.
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