Economists, politicians and businesses at a virtual discussion, held recently under the auspices of a private think tank, asked the government to find the answer to a question that has been more of an enigma than anything else.
The question relates to stagnant private investment and unimpressive generation of employment opportunities amidst very impressive growth performance of the economy. The issue has been agitating the minds of many for quite some time, but the right reply has always eluded them.
The main reason for being concerned about this paradoxical development is that higher private investment in productive or real sectors is imperative for generation of employment opportunities. Job growth remains a key objective in an economy like Bangladesh where new labourers in huge numbers enter the job market every year.
The investment to GDP (gross domestic product) ratio has remained stagnated at around 28 per cent in recent years. Economists say the ratio needs to be raised at least to 34 to 35 per cent steadily to create enough jobs.
The public sector investment has witnessed substantial growth in recent years because of the expansion of development activities, including the execution of several mega infrastructure projects. But these cost-intensive projects do not create enough and lasting jobs.
Since the private sector remains the main engine of growth, its expansion is essential for creating new jobs that the economy needs badly. The private sector can grow at a decent rate only by investing in the real sectors. But, unfortunately, that is not happening. Why? The answers to this question coming from the government and the private sector have been conflicting in nature.
The government claims that it has provided all the policy supports and offered fiscal incentives to the private sector and the overall environment is very conducive to new investment. Businesses do not agree with the government's claim. They say all the good things do exist only on paper and there are still lots of hurdles, bureaucratic or otherwise.
Both, it seems, have valid points to put forward. But the reality is that the certain weaknesses are there and those prove to be a major barrier to the growth of investment and employment.
There is no denying that the cost of doing business in Bangladesh is still high. Despite the government's efforts to ease the situation, businesses do very often encounter difficulties of various types.
The private sector, however, will have to share a part of the blame for the business environment remaining not fully conducive. The lack of corporate culture and the delinquency in the matters of bank loan repayment have dented the image of businesses in the public eye.
Both parties are responsible for the ongoing situation relating to investment growth and employment generation. The greater part of the blame, however, goes to the government since it does have the authority to set things right.
It is worthwhile to mention here that there exists scepticism among a section of people and multilateral entities about the GDP growth estimated by the national statistical organisation, the Bangladesh Bureau of Statistics (BBS). There could be certain errors or omissions in its calculation, deliberate or otherwise.
Even the sceptics find it difficult to ignore what they see around themselves. They cannot overlook the development that has taken place in recent years. The change is visible in most places. There has been a notable transformation in many sectors. Government policies and individual efforts both surely have played their part in it. Some might have played with numbers to show success on a bigger scale, but it is hard to ignore the fact that there have been many positive developments in the economy in recent times.
