Essential components of sustained and inclusive economic growth as identified by the UN Sustainable Development Goal (number Eight) are: increasing labour productivity, reducing unemployment rate and improving access to financial services and benefits. The average annual growth rate of real GDP per capita worldwide was 1.6 per cent from 2010 to 2015, compared to 0.9 per cent in 2005-2009. In the least developed countries, per capita growth rate accelerated from 3.5 per cent in 2000-2004 to 4.6 per cent in 2005-2009, before slowing down to 2.5 per cent in 2010-2015. Overall average annual GDP growth in the least developed countries followed a similar trend, decelerating from 7.1 per cent in 2005-2009 to 4.9 per cent in 2010-2015, below the Sustainable Development Goals target of 7 per cent.
It is imperative that access to financial services enables individuals and firms to manage changes in income, deal with fluctuating cash flows, accumulate assets and make productive investments. Pursuant to the General Assembly resolution 70/1, the Secretary-General submitted the report on progress towards the Sustainable Development Goals. The report provides a global overview of the current situation of the Goals, on the basis of the latest available data. The UN Report E/2017/66 released in November, 1917 records the fact that access to financial services through automated teller machines increased by 55 per cent worldwide from 2010 to 2015. Commercial bank branches grew by 5 per cent during the same period, with lower growth explained by increased digital access to financial services. Globally, there were 60 automated teller machines and 17 commercial bank branches per 100,000 adults in 2015. From 2011 to 2014, 700 million adults became new account holders and the share of adults with an account at a financial institution increased from 51 per cent to 61 per cent.
In its flagship annual report on trade and investment in the Asia-Pacific region titled Channeling Trade and Investment into Sustainable Development, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) underscored the importance of integrated liberalisation policies to achieve the Sustainable Development Goals. "The impact analysis of different policy scenarios that featured in the report make it clear that SDGs cannot be achieved through protectionist policies," said ESCAP Executive Secretary launching the report in Bangkok. The Executive Secretary also noted that an integrated approach to trade and investment liberalisation is essential to achieving the SDGs in the region, adding that SDG-targeted trade and investment policies and complementary domestic policies need to mitigate social and environmental impacts of trade and investment. "What we need is targeted trade and investment liberalisation policies that are more inclusive and mindful of the social and environmental dimensions of sustainable development," the Executive Secretary stressed.
The first year of the 7th Five Year Plan of Bangladesh coincides with the launch of the UN post-2015 Sustainable Development Goals (SDGs). The 7th Five Year Plan of Bangladesh envisages that about Tk 3.2 million crores need to be explored. The main objective and targets of the 7th FYP includes:
- 8 per cent GDP acceleration
- Poverty alleviation
- Human resource development
- Ensuring power and energy sufficiency
- Ensuring food Security
- Making Bangladesh a middle income country
Basically, the 7th FYP Plan centres on three themes:
n GDP growth acceleration, employment generation and rapid poverty reduction;
n A broad-based strategy of inclusiveness with a view to empowering every citizen to participate and benefit from the development process.
n A sustainable development pathway that is resilient to disaster and climate change; sustainable use of natural resources and managing the urbanisation transition.
The economic growth strategy of 7th FYP includes four pivotal themes:
n Break free of the 6 per cent growth syndrome and raise the annual average growth rate to 7.4 per cent.
n Growth will be inclusive, pro-poor, adapt well to the urban transition and be environmentally sustainable.
n By the end of the 7th FYP, poverty and extreme poverty will be substantially lowered.
n All the additional labour force will be gainfully employed, including much of the under-employed.
Analysis of 7th FYP by broader head comes out with following observations:
GOVERNANCE: Effective implementation of the programmes and policies in the 7th Plan demands focused attention on good governance by raising public administration capacity and productivity, while ensuring effective monitoring and evaluation of public sector programmes. In essence, the government's scope to meet the desired milestones of Vision 2021 - articulated under the "Perspective Plan of Bangladesh 2010-2021"- critically depends on addressing key governance challenges, namely-- deficiencies in public administration capacity, shortcomings in economic management, and gnawing malfeasance affecting performance across all segments of public administration.
The 7th FYP Plan takes a relatively more focused approach to develop strong institutions in order to substantially improve performance in strategic areas that are central for achievement of overall development objectives. These critical areas for intervention include: (a) public administration capacity, (b) judiciary, (c) financial sector, and (d) local government.
Lastly, to complete the unfinished agenda in governance, the 7th Plan also prioritises the implementation of strategies and policies that were charted out in the 6th Plan and are still relevant. To expedite the process of good governance, it includes initiates to: make an arrangement for proper training to increase the capacity of the government officials; revise the civil service code of conduct giving priority to the areas of corruption, accountability and capacity building; reform the civil service performance evaluation system; institutionalise citizens charter with emphasis on accountability; reform Public Service Commission and keep the recruitment process transparent; strengthen the mechanism of project selection; arrange the ADP (Annual Development Plan) activity in a rational manner; publish citizens budget after budget declaration; make public all government audit reports in the websites; initiate joint venture activity between media and civil society to boost up awareness; increase the number of hearing on budget committee and public accounts committee etc. It's no doubt an appreciate step taken by the government but we are very much in doubt how much it would be implemented in the upcoming days.
FISCAL MANAGEMENT AND REVENUE GENERATION: In the area of fiscal policy, the performance is on track regarding fiscal prudence. The budget deficit has been constantly below 5 per cent of GDP and total debt-to-GDP ratio has been falling. This is a very strong fiscal performance from the point of macroeconomic stability. This has supported private investment by avoiding a crowding out effect of fiscal policy and has helped the implementation of monetary policy in fighting inflation. However, there are a number of concerns.
First, there is a major shortfall in tax performance. Compared with the Sixth Plan, tax-to-GDP ratio fell by 4.6 percentage points to 12.4 per cent of GDP by FY2015; the actual tax-to-GDP ratio increased to 9.3 per cent of GDP only, which is an increase of 1.5 percentage points. This is partly because of upward adjustment of GDP that has compressed all ratios, and also due to fact that the implementation of the Tax Modernisation Plan has been much slower than expected.
Second, fiscal discipline has often required either cutbacks or inability to meet the Sixth Plan commitments in certain high priority areas of spending (e.g., in education, health, social protection and environment).
Third, procurement problems have slowed down the implementation of major infrastructure projects.
Fourth, the important policy initiative of public-private partnership in infrastructure did not gain momentum. The Seventh Plan should pay particular attention to these areas to strengthen the implementation of fiscal policy. In addition, inflation rate has to be reduced to 5.5 per cent in 2020 and increase the ratio in terms of cash revenue generation from 10.8 to 16.1 per cent by the year 2020. In this regard the challenging tasks ahead are: stopping the sources of black money; expanding the tax net; employing revenue staff instead of VAT staff at the filed level government offices; initiating realistic Wealth Tax or Property Tax system; implementing automation system; introducing return VAT system instead of Excise VAT system etc.
Dr Muhammad Abdul Mazid is retired Secretary to the government and former Chairman, NBR.
