Asian Development Bank's outgoing country director, Hua Du said Tuesday the country's aspiration to become a middle income country by 2020 must be led by the private sector, reports bdnews24.com.

"Bangladesh's development challenges are critical and manifold," she said. To tackle these challenges, the country needs capable and mature political leadership, a pro-poor economic agenda, business friendly policies, efficient but smaller bureaucracy, decentralisation, strong local governments and opportunities for participation of the poorest.

"The country also needs to invest more for human resource and skill development so that it can rise to the challenges of a competitive and globalised world," Hua Du said, speaking on 'The Bangladesh Economy: Challenges and Opportunities' at a monthly luncheon meeting organised by the American Chamber of Commerce in Bangladesh at a city hotel.

"Indeed, I've personally witnessed a dynamic and growing Bangladesh over the past six years."

Gross domestic product growth steadily climbed to over 6 percent a year, over the preceding 5 years, up from 4.8 percent in the 1990s, and 3.5 percent in the 1980s, and poverty incidence continued to decline, noted the ADB country chief.

Before the phase-out of the Multi Fibre Agreement, some predicted that the country's garments industry would collapse, she said. "But that did not happen; the garments industry continues to show strong growth, outperforming many others."

The country had witnessed key economic and governance reforms by the caretaker government, to ensure timely and effective transition to an elected government, since the political deadlock in late 2006 and subsequent installation of the interim government in January 2007, Hua Du said.

"The current caretaker government has gone the extra mile to restore law and order, and to improve the overall governance setting, by implementing several key governance reforms."

However, the ADB chief felt, despite implementing many landmark governance reforms, one major reform remained untouched—"the sluggish and complex bureaucratic structure of the government."

"In my view, this is the mother of all other reforms," Hua Du said.

The pyramid bureaucratic structure and its archaic systems and procedures, inherited from the colonial days, are characterised by inefficiency, centralisation, too many tiers in the decision making process, lack of delegation and job description, she noted.

"Bangladesh, indeed, politically as well as on the economic front, is at a critical juncture and facing a difficult and challenging time ahead."

On the macroeconomic front, rapidly growing inflation was the biggest problem, Hua Du said, adding that the inflation rate had been pushed by higher import bills on food grains and fuels due to the unprecedented price hikes of these commodities in the international market.

"In the quest for quick economic growth and development, the country must seek inclusive economic growth and put in more resources for reduction of poverty of millions of people who live under desperate poverty," she stressed.

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