GHULAM MURSHED

Then we can take comfort from the fact that the reserve has exceeded the six billion dollar mark because of increased remittances. The government feels there has to be more overseas employment or manpower exports but have the working conditions improved there? And there have been certain lacunae in policy and research on the promotional aspects of remittances. On one hand, have we been able to encourage NRBs to set up, say, import business for raw materials and capital equipment for rural and agro-based industries, and on the other, has there been the productive utilisation of the remittances remitted by the NRBS and other temporary workers? In sum, what is needed is a well-coordinated policy framework for enhancing remittance flows and their use in productive areas in the coming years.

The Finance Adviser, while proposing allocation of funds for the power sector in his last budget proposal for FY2007-08, talked about generation of 2,295 megawatts of electricity in the next three years. Our present requirement is 5,000mw, but we produce 3,000mw. So, our shortfall is 2,000 mw. But to meet the growing demand, we have to add to our national grid and additional 600mw, on average, every year over next three years. In other words, by 2010 we need 3,800 mw of electricity if the country is to be freed from the curse of loadshedding by that time. And right now, the new plants we are talking of are not adding a single mw to the national grid over the last one-year. Power projects are also in limbo for gas crisis and, thanks be to Allah! we did not give gas to Tata, etcetera. Myanmar has now rejected gas supply to Bangladesh but will do so to India and China. Bangladesh faces a daily shortage of at least 100 million cft of gas but the daily demand is 1,800 million cft of gas. The energy shortage will become acute if new gas finds are not made. Hence the budget proposal falls short of this requirement. We definitely need more funds and a more aggressive approach towards this sector. However, the coming budget for FY2008-09, albeit under strained economy, must fulfil economic promises and reflect the goals of the government. It must, come hell or high water, provide perspective visions, and immediate remedies addressing the core problems of the economy that might halt or hinder progress and effect our fight against poverty. Budgetary allocation should also be enhanced for development of projects in the northern region. Monga must end but that calls for the strong commitment of the government.

Amidst the deepening of the economic woes, attaining the status of a middle income country by 2020 seems to be a “mission impossible.” Growth is what matters. And now in a report the global financial giant Citi warned Bangladesh’s GDP will slow down to 5.6 per cent in 2008 and six per cent in the coming fiscal year [2009] on the back of lower agricultural growth, rising inflation which is already in double-digit and political uncertainty and decelerated investment activity. Terming the political scenario still in limbo, the report said if the US slowdown worsens, Bangladesh’s export growth [of garments] will take a further hit, given that the US comprises 33 per cent of Bangladesh’s RMG exports. The end of quota restrictions on China and higher raw material prices would also have an adverse impact. To this end, it is important for the country to improve intra-regional trade and better avail of benefits under the GSP, improve productivity in the sector as well as diversifying the export basket. Offering generous export subsidies is hardly the way to promote export diversification, though that is what the recipient of export subsidies would have us believe. For export diversification to succeed we need to create a replica of the free trade channel rightfully given to the RMG industries. Let us hope that someone is listening. But it is heartening to note that Bangladeshi exporters, with aggressive but innocuous efforts, have explored 21 new markets in Asia, Africa and in former Russian blocs. The South American markets, however, remain untapped.

To compound our woes further, rising unemployment and, declining share of the poorer populace in national income (rich-poor gap) are two major challenges for the country in achieving the UN’s MDGs. Appropriate interventions are required so that benefits of economic growth reach the poorest of the poor. In 2000, the share of the poor in the national income was 6.5 per cent but it dropped to 5.3 per cent in 2006. A steady annual growth of around five per cent on an average in the 1990s and six per cent in the 2000s helped the country to draw nearer to the MDGs, eight goals that the UN member states have pledged to accomplish by the year 2015.

0ne of the shortcomings in Bangladesh’s efforts to attain MDGs is failure to make growth pro-poor, the result being, that depleting share of the poorer segments of the society in national income and consumption shows that the poor are not benefiting from the growth with dividends. Youth unemployment has steadily shot up to 13 per cent in 2002. The challenge is clearly to generate job opportunities at a much faster pace. The government should provide policy support and fiscal incentive for the labour-intensive industries to overcome the growing unemployment. In fact, the country needs continued support and assistance from its development partners to beat off the hurdles getting in its way of meeting the MDGs.

It may not be able to generate required resources from domestic sources and so will need sustained support from the donors. Besides, the developed countries failed to contribute, as committed at various G-8 summits, 0.7 percent of gross national income [GNI] that they have pledged for the developing countries seeking to achieve the MDGs. Moreover, ODA to Bangladesh has been falling over the years. Given by the Organisation for Economic Cooperation and Development (OECD), the development aid to the country was $ 1,240 million in 1990, but it plummeted to $ 110 million in 2006. According to the Planning Commission, it is not all gloomy. ”The targets that we are struggling to reach would be given emphasis in the next PRSPs, now being drafted.” However, Bangladesh achieved gender parity in primary and secondary schooling in 2005. Besides, it is well on course to have the proportion of population below national poverty line and minimum level of energy consumption as well as gain universal access to primary education and reduce the child mortality and infant mortality rates.
The concluding remarks are that the ACC going in EPR mood and mode may have caused havoc. Random case filing, losing in litigation are feared to upset economy and now the Truth Commission, that is on the card, might let graft suspects off the hook. Arbitrary lodging of corruption cases might have demoralised the bureaucrats and have negated the positives of the economy, as commented by the Regulatory Reforms Commission (RRC) chairman. It is increasingly felt that the ACC would have been in a favourable position, if it had dealt its cases under the existing laws instead of the EPR.

However, the moment of truth looms in the economic battle and the policy planners, though not having a pocketful of miracles, may have tried to trigger a tectonic shift in Bangladesh economy. There are a few lessons still to be learnt and it is time we appeared serious about the learning process, and not trying to run without first knowing how to walk at all. It is time, in other words, to putting our finger on the pulse and identifying the real issues ailing our economy and our mode of addressing its related problems. Remember Confucius? He with the shrewd philosophical and economic brain once said, “When the finger points at the moon, the fool looks at the finger.” Enough time has been lost in this fiscal, it is now or never during these months for serious introspection and reappraisal of the economic outbursts on-again off-again for the inside is looking increasingly insidious and the outside grotesque. It is not a pretty sight at all, simply because, as things stand today, reviving Bangladesh’s moribund economy would require inflation-battered citizens to swallow the bitter pill of reduced state spending and still higher interest rates to attract foreign cash. Any stabilisation and recovery programme to do away with the present drags on the economy will inevitably involve both sacrifice and hardships with astute austerity measures besides halving the number of high-ups and cutting frequent foreign trips by them during a caretaker set up, to save money together with structurally adjusting the country’s civil service that is still highly politicised and decimated by the loss of both skill and experience. Frequent reshuffles are exercises in tokenism and do precious little to achieve the objectives as the same wine is served in different bottles.

(The writer is an alumnus of the London School of Economics, UK and Stanford University, USA)