Finance Minister AMA Muhith Friday said at a function at Jahangirnagar University (JU) at Savar that the Bangladesh economy on the whole performed in its post-Independence period better than other comparable countries, despite many constraints and "odds" of its polity.

Some of improvements in its social development indicators particularly over the past two decades are noteworthy, he added.

He said that 4,000 megawatt of power would be added to the national grid in the next three years.

"We've added 2,000 MW of electricity to the national grid over the last two years and another 4,000 MW will be added in the next three years. There will hardly be any power crisis after that time," he said.

The finance minister made these observations as the Chief Guest at the inaugural session of a three-day seminar, organised by Faculty of Business Studies, JU.

Governor of Bangladesh Bank Dr Atiur Rahman and Editor of the Financial Express Moazzem Hossain were special guests.

Former Adviser Dr Akbar Ali Khan delivered the 'Martyr Memorial Lecture' at the Guest Speaker at the inaugural session.

Dean of the Faculty of Business Studies and Chief Coordinator of the three-day seminar, Professor Abdul Bayes, delivered the address of welcome. JU Vice-Chancellor Dr Sharif Enamul Karim chaired the inaugural session.

"Bangladesh at 40: Changes and Challenges" is the theme of the seminar, embracing eight working sessions in all to be continued until tomorrow (Sunday).

The Financial Express is the Media Partner of the seminar.

In his address as the Chief Guest, Finance Minister AMA Muhith said investment has remained largely stagnant over the past many years.

He said the government has set a target to attain investment rate at 32 per cent of gross domestic product (GDP) by the fiscal year, 2013-14, from the existing level between 26 and 27 per cent. He listed an almost stagnant level of investment, low public expenditure in a comparative regional perspective and low level of tax: GDP ratio as the major challenges for the economy at this stage.

Mr Muhith said the government would like to raise the tax: GDP ratio to 13 per cent, public expenditure to 20 per cent, of GDP, within the next two years' time.

He was, however, sceptical about achieving the target of private investment relative to GDP.

He expressed the hope that public-private partnership (PPP) would yield some positive dividends, facilitating growth of investment in both private and public sectors.

The finance minister said that the trends about growing income inequality has been arrested and noted the findings of the latest household expenditure survey had borne out that this inequality been on the decline during the last five years.

Mr Muhith said Bangladesh is on course for achieving seven per cent economic growth this year, notwithstanding some constraints and different predictions by some economists. The country has achieved remarkable success in some areas, he said.

About foreign investment, he stated that such flow witnessed a fall due to corruption during the previous government but the situation has now improved and foreign investors are showing interest to invest in Bangladesh, he added.

Mr Muhith said that the country's economic growth rate has been hovering around 6.0 per cent over the last 10 years. Every government had promised to increase the growth rate but could not help deliver the same to the expected level.

He mentioned that the coverage of social safety net programmes and subsidies in agriculture had been expanded to reach the poor who live below the extreme-poverty line.

The minister said government's continuous efforts for improving human resources has played an important role in raising incomes in rural and urban areas.

"We have now ensured effective participation of 50 per cent of our workforce, including women population, in the mainstream economic activities and this is one of our most notable successes in last 40 years," he said.

Endorsing the views of expressed of Dr Akbar Ali Khan in his presentation as the guest speaker on the occasion, Mr Muhith said Bangladesh is a really politically divided country.

"Politics should be based on compromises, but here it is an art of division," he lamented.

Addressing the seminar, Bangladesh Bank (BB) Governor Dr Atiur Rahman said Bangladesh has many success stories over the past four decades, including improvement in its poverty rate.

He said: "We've cut down poverty rate to 31 per cent from 80 per cent after independence of our country."

"This (low poverty rate) has been achieved mainly due to a sustainable economic environment," he noted.

Dr Atiur Rahman said that with sustained development dynamism powering the pace of growth, the country can reasonably aspire to join the group of upper middle income countries by 2030 and to enjoy the status a mature developed economy by 2050.

He said that the GDP growth trend in real terms has steadily gained pace, from an average 1.1 per cent and 3.2 per cent annually in the 1970s and 1980s, rising to 5.8 per cent in the first decade of this century.

The Bangladesh Bank Governor said that the poverty rate has come down to about 30 per cent of the population now, from around 57 per cent in the 1990s. Bangladesh is ahead of most of the South Asian nations in progress in human development indicators, he observed.

In fiscal year (FY)11, Bangladesh economy grew 6.7 per cent in real terms, and the target for FY12 is 7.0 per cent, he said adding that trade openness has facilitated greater integration of the Bangladesh economy with the global one, with its trade-GDP ratio rising from around 20 per cent of the 1970s and 1980s to 40.7 per cent in FY 2011.

The BB governor noted that one looming near-term challenge is the apprehended impact of the ongoing debt crisis in the Euro Zone, hurting prospects of Bangladesh's export, wage earners' remittance and investment inflows from the Euro Zone; weakened growth prospects of other countries outside the Euro Zone due to the crisis will also hurt prospects of commodity and manpower exports to those countries.

"We'll be able to identify the problems through the seminar that has been hindering our growth pattern," the central bank chief added.

He said from a primary goods' producing small agrarian economy, Bangladesh has been able to transform itself into a globally integrated manufacturing economy.

The BB governor said Bangladesh is also an acknowledged global pioneer in microfinance for self-employment-based poverty reduction.

"Despite some weaknesses, democratic governance and rule of law safeguarded by independent judiciary is a major achievement in the governance area, attained through decades of struggle and efforts of our broad masses," he added.

In his observation, the Financial Express (FE) Moazzem Hossain lauded the efforts of the sponsors for organising such a seminar on the eve of the 40th anniversary of the Victory Day of Bangladesh -- a day that "stands out as the most glorious day of our history".

He noted it is a well-purported move for taking a stock of developments that have taken place in Bangladesh in its post-Independence period, particularly on its socio-economic fronts.

He shared the view of its sponsors that objective analyses and reviews of past 40 years' development of Bangladesh by many distinguished discussants in important working sessions of the seminar and their valuable suggestions for meeting the challenges that confront the economy today, would help work out a do-able action plan for the country to score better on the economic front in the coming years.

The FE Editor took a positive note of people's strong resilience and expanding private initiatives in various fields of the economy over the years. The country has achieved some notable progress in many areas, notwithstanding periodic vicissitudes of its polity and devastating natural calamities at times, he added.

The country's overall growth performance of Bangladesh has otherwise been impressive, belying the scepticism of those about its future at its birth and their forecast of 'doom and gloom' about Bangladesh became a fiction a long time back, the FE Editor said.

He, however, pointed out that Bangladesh's actual performance over the past four decades has still been below its potential, because of many constraints -- institutional, infrastructural and others that have been persisting for long, as being responsible for this, he added.

Presenting his key-note presentation as the gust speaker, Dr Akbar Ali Khan said economic growth in Bangladesh significantly picked up since 1973.

"There was significant growth in Bangladesh during the period 1973-1998," he added.

The rate of per capita income growth further accelerated in Bangladesh since 1998, he observed.

He mentioned two redeeming features of Bangladesh's growth -- relative stability and extraordinary resilience over the years.

He said that the country's dependency on foreign aid reduced very substantially as it stood at around 6.0 per cent in FY 2009, down from 71 per cent in FY 1972-73.

Dr Akbar Ali Khan, however, noted that income inequality "has increased in the country over the years."

He was also critical of lack of good governance in the country.

He said Bangladesh's economy is advancing amid a number of constraints while its politics has remained in a fully opposite state. It can be termed, "Bangladesh conundrum: A tape story of light and shadow," he observed.

The former adviser highlighted the positive sides of the Bangladesh economy, its twilight areas with light of hope and shade of doubt and also its areas of darkness, JU VC Dr. Shariff Enamul Kabir said everybody has to practise democracy in every sphere of life to lead the country forward.

He said despite a lot of constraints, Bangladesh has become a country of steady growth from what was termed by some at abroad as a bottomless basket.

Dr Abdul Bayes, Dean of Business Studies Faculty and chief coordinator of the seminar, said a wide range of subjects would be covered in the three-day the seminar. The deliberations of many distinguished participants in those sessions would later be published in the form of a book, highlighting the achievements, problems and possibilities of Bangladesh.

He extended warm felicitations to all those participating in the seminar.

Source: The Financial Express/ Bangladesh/ 10th Dec 2011