The two-day meeting of the Bangladesh Development Forum (BDF) in Dhaka last week brought to the fore some bitter truths about the economic scenario of the country. A picture of the harsh realities obtaining at the ground level needed to be unearthed at the Forum meeting so that the country's policymakers could devise effective ways and means to tackle those.
Let's have a look at what the country's leading chamber of industrialists, the Metropolitan Chamber of Commerce and Industry (MCCI), said on the occasion. Incentives for foreign investors are there only on paper, said Nihad Kabir, President of the Chamber. "Little of these policies get reflected in real life," she said at a session on creating an enabling environment for foreign direct investment and private sector engagement in the country.
The stringent foreign exchange rules of the country were cited to elaborate her point. "The foreign exchange rule is liberal, but when we go for taking up the opportunity, we face various problems", she said, adding "There is policy uncertainty, particularly with regard to tax, which discourages investors." She said investors remain worried every year about what is going to be the tax policy. The tax issue should not be changed year to year. The MCCI chief also criticised the government's plan to build 100 economic zones. "Instead of taking up 100 zones, the government should develop one or two properly. This will be helpful in attracting foreign investors," she added.
Executive chairman of Bangladesh Investment Development Authority Kazi M Aminul Islam, while recognising that foreign investment has been improving since 2010, admitted that the country has low FDI. The problems, he said, have been identified, adding that the government is working to ease the process of doing business and establish a one-stop service for investors.
The development partners, who had attended the BDF meet, are real friends of Bangladesh as they suggested do's and don'ts for taking the economy on the right track. Incidentally, they were the first to laud the country's attainment of the low middle income status.
Comments of Janina Jaruzelski, co-chair, Local Consultative Group and USAID Mission Director, testify to this. She told the BDF meet: "Bangladesh made outstanding progress on key Millennium Development Goals (MDGs) and we are confident that similar progress is possible under the Sustainable Development Goals (SDGs). Indeed, Bangladesh has already shown leadership on the SDGs and has been impressively proactive in incorporating those into its 7th Five Year Plan and other budget and strategic planning efforts."
Ms Janina Jaruzelski pointed out that many years of sustained 6 per cent annual growth has already pushed Bangladesh across the World Bank's Lower Middle Income threshold. "With the right choices, the Prime Minister's goal of attaining full Middle Income Status by 2021, the 50th anniversary of independence, is achievable", she said.
Sustaining high economic growth will require Bangladesh to do more to encourage investment, especially in infrastructure and renewable energy, and work on removing the many barriers to trade. "Perhaps even more important is preparing young people for a rapidly evolving world economy by equipping them with the sort of quality education and analytical reasoning skills that will enable them to adapt and excel," said the co-chair of the Local Consultative Group.