Economic priorities for the next government

I was discussing the priority election pledges of the present government with the envoy of a North American country in Bangladesh and made the suggestion that the government could still focus its attention on a few important ones of those, including Dhaka-Chittagong four-lane, liquefied natural gas (LNG) terminal, power purchase from India and the Padma Bridge projects. The diplomat appeared to be quite blunt when he said nothing would happen without a new government at the helm of the statecraft.

I am one of those who see Bangladesh as a nation having tremendous economic potentials and believe that only political challenges are holding it back. I am also one of those who have a feeling that there will be a peaceful election no matter how strong the political challenges are in this connection. All major parties will join in and there will be a new government by early 2014. By that time most of the political tensions should be over, allowing the government to focus more on issues relevant to driving the economy forward.

There is no doubt, the economic issues- private sector led growth, more foreign investment, building long term and sustainable power solutions, improving the energy and ports condition, putting up an efficient agriculture pattern, improving the regional connectivity, facilitation of international trade, putting up a befitting management and technology education and dependable health infrastructure will remain ‘centre of the plate’ issues for the new government.

Notwithstanding the controversy over rental power, the present government has been able to increase the power generation almost by 100 per cent. But putting ‘hand on heart’, we can’t claim we have got a sustainable solution to the problem of power, more importantly, we don’t have clear visibility to meet an increasing demand for power in the coming years to facilitate private sector led industrial growth. We need more large and independent power plants and, maybe, full-scale participation in the ‘regional power exchange’.

Gas or energy problems seem to be more serious than those of power. Proven, possible and potential gas reserves are not showing any encouraging signal. We must go for alternate sourcing and put up LNG terminal and grid as soon as possible. Instead of being a public-private partnership project (PPP), this could be a joint venture between foreign and local entrepreneurs. And the government should come up with a dynamic pricing mechanism to buy the processed gas from them with a procurement guarantee for considerable number of years. Building or expanding the gas supply grid up to the procurement point should be left with the government. We should immediately stop supplying CNG (compressed natural gas) to motor vehicles. Households may be served by increasing the number of LPG (liquefied petroleum gas) providers. However the industries should not be deprived of regular gas supply.

Though in recent years the efficiency level of the Chittagong port has improved, we could not make the New Mooring Container Terminal (NMCT) operational. Optimum modernisation of the Chittagong port has been put in the ‘backseat’. Analysts show that the way our external trade is increasing, our capacity will again be under pressure by 2018. In the absence of clear regional connectivity and agreements to join the hub in place, the ‘deep sea port’ may not be a comfortable solution too. Return on investment (ROI) from a multi-billion dollar ‘deep sea port’ is not expected to be too encouraging, unless we could increase its usage manifold. We need to make Mongla Port operational and may consider building a third sea port at Ramnabad channel near Kuakata. Once the Padma Bridge is a reality within next five years or so, this can give real impetus to the southern ports provided we focus on constant dredging of the channels (including Chittagong) for reasonable sized ships to come in. We are already paying too much on account of lighterage. Present Mongla Port draft is quite shallow.

If we want to make the best use of the river transportation with a view to helping the growth of ‘industrial clusters’, continuous investment on dredging remains to be the only solution. In the same way we should find out respectable solutions for Dhaka-Chittagong, Dhaka-Mongla and, may be, Dhaka-Kuakata cargo traffic as well as improve the road condition for a respectable regional and intra-country traffic solution. Allowing a private port under national and international joint venture should also not be dropped from the agenda. Clearing the barriers towards long pending Korean Export Processing Zone (KEPZ) to operate soon may create new synergy in the entire Chittagong zone.

No matter how we look at increasing number of private universities or new licenses are being granted, studies show none of the graduates from these universities remain unemployed. With growing private sector, we need more management graduates to be engaged in the work of shaping out their future. With pharmaceuticals, chemical plants and global outsourcing gradually taking the ‘front seats’, we can’t shift our eyes from further investment in science and technology education too. May be, sooner than later we need to invite foreign institutions to fill up this ‘opportunity space’ or at least invite foreign faculties to join our institutions, especially our public universities, where we are seeing increasing number of seniors not being able to concentrate on their ‘core job’.

At the same time building up of ‘health infrastructure’ should bother the `new government’ more than the past ones. Private investment is fine. But we must see the presence of a far-sighted regulatory body in this space, who can really ‘call the shot’ in case of every need. Rural health services would remain to be an issue for the local government and the public representatives in the new government.

In order to support a private sector led growth strategy, we need regulatory reforms. Our law ministry should be able to spend considerable time for enacting ‘growth supporting’ new laws. The foreign exchange regulation act of 1947 is redundant for a nation that achieved independence 42 years ago; it needs to be updated to beef up the capacity of the regulator concerned. We may also start allowing a few of our leading entrepreneurs or business houses to invest abroad under an acceptable mechanism.

Our agriculture has already shown tremendous success. We are almost self sufficient in rice production. Unless there is a natural disaster, our rice import is limited to a few ‘refined varieties’ for the richer section of people only. However in order to make our agriculture sustainable we should think of a better ‘rice’ variety which does not consume too much of ground water. Putting up an appropriate pricing model for our agriculture commodities can’t be ignored at all. New government should start thinking about export of rice during the lean season and import during peak season, in view of the limited storage facility and more importantly to influence a competitive ‘pricing model’ for the real growers.

The new government must think of coming up with a befitting mechanism to handle the ‘loss making state-owned enterprises’. They must think loud whether we need so many state-owned banks or a not-so-effective Trading Corporation of Bangladesh (TCB) like quasi-government bodies. They should also embark on an ‘efficiency audit’ for Bangladesh Petroleum Corporation (BPC) or Power Development Board (PDB) to start with. Coming up with an innovative way to mainstream the ‘shadow economy’ could bring in lot of laurels for the new government. Government revenue earnings would also go up as a resultant effect.

While talking about realizing the economic potentials, we must not forget that we need a forward looking political party in power, a responsible and engaging opposition to guide them with constructive criticism. We want a working judiciary with ‘zero’ tolerance for ‘corruption’ and always championing ‘good governance’. We need more engagement from development partners with more global corporations getting engaged in the work for achieving ‘public good’ and large projects, be it-ports, bridges, toll ways, power plants, LNG plant, refinery, airport or most modern universities and hospitals. And above all- we need right persons for the right jobs. I also want to caution the would-be new government that ‘old wine in a new bottle’ may not work for them this time.

Source: Thefinancialexpress