Dhaka, Nov 13 (bdnews24.com) – Bangladesh needs to attain 7.5 to 8.0 percent growth along with 8.0 percent remittance growth to reach middle income country status by 2021, says a World Bank report.
The report titled `Bangladesh: Towards Accelerated, Inclusive and Sustainable Growth-Opportunities and Challenges` revealed that both GDP growth and remittances would play an important role in attaining middle income status.
The report was launched in presence of Finance Minister AMA Muhith at Westin Hotel on Tuesday.
Bangladesh in the last decade attained an average growth of 6.0 percent while the remittance growth was about 10.5 percent in the last fiscal.
The country has a vision to reach the MIC status by 2021, 50 years from its independence.
The report emphasised on more investment in physical infrastructure and human resource development, and create enabling environment for flourishing labour intensive economic activities.
Implementation of policies and institutional reforms to enhance labour productivity and skills were critical, the report added.
The importance of remittance in economic development was more evident than ever before as it contributed about 10.5 per cent to the GDP, the report said.
About 14 per cent population are working abroad, which is twice the size of what is employed in the textile sector.
“Bangladesh needs to continue to tap the global migrant market and promote safe migration in order to accelerate growth and reduce poverty at home.”
Climate change and managing urbanistaion were major challenges that Bangladesh was facing and would continue to face in the future, said World Bank senior economist Zahid Hossain in his presentation.
Bangladesh needed to accelerate GDP growth and sustain remittance growth and achieve inclusive growth to reach the middle income country status, he added.
Finance Minister AMA Muhith said the biggest failure of the government was not to delegate power to the local administration.
“It is not possible to achieve 7 per cent to 10 per cent growth with centralised administration,” he said.
“We also miserably failed to promote investment,” the minister added.
He, however, said due to strategic reasons, the country could achieve high growth rate with low investment and was hopeful of reaching the target of middle income country by 2021.
The minister claimed that the government had substantially reduced infrastructure deficit and identified inequality as a major impediment to growth.
About export, he said it was not acceptable for a country like Bangladesh to have $27 billion earning from the sector.
“It (export earnings) should be $100 billion in the next five years.”
Distinguished fellow of Centre for Policy Dialogue Debapriya Bhattacharya said Bangladesh has a big domestic market and it should not only depend on export led growth.
“Our market of middle class is about $44 billion in 2012 and 120 countries in the world do not even have GDP of that amount,” he said.
Political sustainability and god governance were needed to attain the goal, he added.
Managing Dirctor of Apex Footwear Syed Nasim Manzur said focus should be on creating more employment opportunity now rather than addressing inequality.
He said that the major challenge was that out of 56 million work-force, only 2.2 million were graduates, and added that the problems in education sector needed to be addressed.
About attracting foreign investment, he said Myanmar offered an exclusive export processing zone for Japanese investors in October and received $18 billion FDI commitment.
Giving example, he said Indonesia exported $1.7 billion worth of footwear in 2009 but it shot up to $3.3 billion in 2012.
“Only 87 Taiwanese and South Korean companies helped the country to achieve it and we need to focus on certain countries rather than exploring the whole world,” he added.