Awami League Return: Intact policy to accelerate economic growth
They also believe that this will help policy continuation which will eventually be conducive for development and contribute to growth acceleration.
“The country’s growth rate increased from once 4-5 percent and 6 to 7 percent plus now. The growth will get momentum in future with the continuation of power,” eminent economic analyst Dr Zaid Bakht said. “Policy continuation is very important for development as it will be helpful for growth and development,” he added.
With the Awami League’s victory in the 11th national election, the country’s development efforts are likely to get a boost as mega projects will have some positive impacts with faster implementation.
Awami League has assumed office for the third consecutive term with a vision to lead the country to a prosperous nation. In its last 10 years’ rule, the nation witnessed a socio-economic progress, driven by favourable policies and pragmatic steps. In the period, the country also saw 6.6 percent average growth against 5.1 percent global average that helped raise its status from a low-income LDC to a lower middle-income country ready to take off as a non-LDC country by 2024.
The growth rate climbed to over 7 percent rate in the last three consecutive years, while it hit 7.86 percent in the last fiscal year with per capita income rising to $1,751 from $759 in 2019
The government’s long-term Perspective Plan 2010-2021 and the sixth and seventh five-year plans were the driving force behind the success, according to analysts.
Economists think the increased public investment actually played the catalytic role in achieving the higher growth in the context of an apparently stagnant private investment. Public investment now reached 7.8 percent of GDP. In the last 10 years foreign exchange reserve increased more than four times from $ 7.5 billion to $ 32.2 billion. The Bangladesh parliament has a record Tk 5.23 trillion (about 62 billion US dollars) national budget targeting an economic growth of 8.2 percent in 2019-20.
A major development indicator was lowering poverty. The poverty rate has come down to 21.8 per cent in 2018 which was 31.5 per cent in 2009 with extreme poverty rate slipping from a whopping 17.6 per cent to 11.3 per cent.
In the process of economic transformation, agriculture sector’s contribution to GDP, which has traditionally been large contributor, has weakened while the contribution of industry and service sectors is on the rise.
In the wake of achieving remarkable economic progress, time has now come to sustain the growth, Dr Zaid Bakht said. He thinks that the key challenge for the new government is going to raise the quality of public investment alongside increasing private investment.
Improving physical infrastructure, energy sector and skill level of workforce, and human resource development, lowering poverty further and narrowing inequality will be the major challenged in the coming days, he listed.
Another eminent economic analyst Dr Zahid Hussain, lead economic at World Bank’s Dhaka office, said bringing back discipline to financial sector, rationalizing public investment plan, more revenue earning and reforms to public administration will be the major challenges for the new government.
The government has to ensure that mega projects like Padma Bridge, metro-rail and construction of LNG terminals are completed during its present tenure so that the people as well as economy get benefits of those mega infrastructure projects, he noted.
The projects hurriedly approved on political consideration prior to the polls should be revisited, project management should be fixed and project priority should be set according to Sustainable Development Goals (SDGs), he also suggested.
He said both tax policy and administration require reform to make them taxpayers’ friendly so that domestic revenue mobilization increases, which is also pre-requisite to achieving SDGs.
Efficiency and accountability of the public administration should be enhanced through some reforms including introduction of performance based promotion and salary increase system, he suggested.
“If a government coming to power consecutively for three terms with a landslide victory can not bring reforms to the administration, then who’ll do this?” he said, in a reply to a question whether it will be possible for the new government.