The estimates about the growth rate of the Bangladesh economy, price situation, household income and expenditure, level of poverty, income distribution et., that are provided by the official Bangladesh Bureau of Statistics (BBS), leave a lot of room for raising questions about their objectivity and relevance to the realities. The government-run BBS has lately projected that the country's gross domestic product (GDP) in the current fiscal year (FY), 2010-2011, would grow by 6.7 per cent. This estimate about the GDP growth rate has now been contested by the Centre for Policy Dialogue (CPD), a leading think-tank in the country. It has expressed its doubts over the objectivity of the BBS's GDP growth figure. In the estimation of the CPD, the BBS-calculated GDP growth rate at 6.7 per cent in fiscal 2011 could be upheld as objective only if the same had been backed up by proofs of an actual lift-up in the investment rate in different sectors. The fact that such investments have been markedly lower than the desired level, do largely tend to take credibility away from the latest figure of the BBS about the GDP growth rate. According to the CPD, the country's GDP would not grow at more than 6.2 or 6.3 per cent in the outgoing fiscal that was marked by a low level of overall new investments in the economy.
The CPD has also expressed its doubts about the estimates by the official circles about the GDP growth rate at 7.0 per cent in the next fiscal. The official circles have largely based this growth estimate for fiscal 2011-12 on strong and positive trends in exports and also considerable expansion of economic activities in farming and manufacturing sectors. However, reaching such a higher level of GDP growth rate, as the CPD has noted, will call for at least 2.0 to 4.0 additional investments. But such additional investments cannot be expected to take place from just wishing for the same. Investments are driven usually by policies perceived as truly business-friendly by the potential investors in different fields. Furthermore, government's fiscal and monetary policies need to be in tandem with what investors would like to feel as hospitable to their short- and long-term interests. If the GDP growth rate is to accelerate to 7.0 per cent in the next fiscal, then the upcoming budget should obviously be convincing about catering to such expectations. More significantly, in the context of Bangladesh, the investors must remain satisfied from actual achievements of the government that energy supplies for them would only go on sustainably improving not only in 2012 but well beyond that period.
Meanwhile, a great concern is now developing among the country's businesses about the political situation that is most likely to go on declining in the coming months, in view of the latest trends about the polity getting increasingly overheated for reasons of either default or design - or, a combination of both - on the part of its major actors. Understandably, investors everywhere take their decisions in a major way on being assured that their investments would not suffer political volatility and the physical consequences thereof and for lack of continuity of government's policies or related flip-flops.
Against this backdrop, it should be best on everybody's part not to create undue expectation. Recognizing the hard realities, the official endeavour ought to be on making policies which take squarely into consideration the factors which are holding up greater investment activities. From the current indicators about the political situation getting increasingly jittery to the state of affairs now prevailing in areas which require further boost to ensure the completion of power- and gas-related projects in time, the government should engage with great dedication over the gamut of issues related to improving the investment climate as a whole. This would be the practical and realistic thing to do than any attempt at kite-flying when the breeze is not blowing.
Meanwhile, it is extremely important to realize that data, correctly compiled and utilized, provide a real source of strength for policy-makers. It there are inadequacies in data collection that lead to wrong forecasts on the basis of the same, specially in the realm of the economy, every negative possibility will remain about such estimates being flawed, leading to some wrongly guided or misdirected actions. The same occurring then will not only embarrass the government but also cause the economy to suffer from policies sought to be implemented by putting emphasis on any such short-sighted data.
http://www.fe-bd.com/more.php?news_id=138191&date=2011-06-06
The CPD has also expressed its doubts about the estimates by the official circles about the GDP growth rate at 7.0 per cent in the next fiscal. The official circles have largely based this growth estimate for fiscal 2011-12 on strong and positive trends in exports and also considerable expansion of economic activities in farming and manufacturing sectors. However, reaching such a higher level of GDP growth rate, as the CPD has noted, will call for at least 2.0 to 4.0 additional investments. But such additional investments cannot be expected to take place from just wishing for the same. Investments are driven usually by policies perceived as truly business-friendly by the potential investors in different fields. Furthermore, government's fiscal and monetary policies need to be in tandem with what investors would like to feel as hospitable to their short- and long-term interests. If the GDP growth rate is to accelerate to 7.0 per cent in the next fiscal, then the upcoming budget should obviously be convincing about catering to such expectations. More significantly, in the context of Bangladesh, the investors must remain satisfied from actual achievements of the government that energy supplies for them would only go on sustainably improving not only in 2012 but well beyond that period.
Meanwhile, a great concern is now developing among the country's businesses about the political situation that is most likely to go on declining in the coming months, in view of the latest trends about the polity getting increasingly overheated for reasons of either default or design - or, a combination of both - on the part of its major actors. Understandably, investors everywhere take their decisions in a major way on being assured that their investments would not suffer political volatility and the physical consequences thereof and for lack of continuity of government's policies or related flip-flops.
Against this backdrop, it should be best on everybody's part not to create undue expectation. Recognizing the hard realities, the official endeavour ought to be on making policies which take squarely into consideration the factors which are holding up greater investment activities. From the current indicators about the political situation getting increasingly jittery to the state of affairs now prevailing in areas which require further boost to ensure the completion of power- and gas-related projects in time, the government should engage with great dedication over the gamut of issues related to improving the investment climate as a whole. This would be the practical and realistic thing to do than any attempt at kite-flying when the breeze is not blowing.
Meanwhile, it is extremely important to realize that data, correctly compiled and utilized, provide a real source of strength for policy-makers. It there are inadequacies in data collection that lead to wrong forecasts on the basis of the same, specially in the realm of the economy, every negative possibility will remain about such estimates being flawed, leading to some wrongly guided or misdirected actions. The same occurring then will not only embarrass the government but also cause the economy to suffer from policies sought to be implemented by putting emphasis on any such short-sighted data.
http://www.fe-bd.com/more.php?news_id=138191&date=2011-06-06
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