Political stability must to keep Bangladesh’s economic growth unhurt

ADB President Mr Takehiko Nakao addressing the opening session of the Board of Governors at the 51st ADB Annual Meeting on May 5 in Manila, Philippines. (ADB file photo)

Bangladesh’s growth can be very good example for Asian countries: ADB President

In countries like Bangladesh, Cambodia, the Lao People’s Democratic Republic, Myanmar, the Philippines, and Viet Nam, the economic growth continues at 7% or even more. At this pace, according to the Asian Development Bank (ADB), gross domestic product (GDP) will double in about 10 years.

The ADB, an international development finance institution, remains very optimistic about Bangladesh’s continuous growth but says how the country will maintain the current political stability remains a big challenge. In Bangladesh, the economic growth in these past 10 years averaged about 6.3 percent and reached 7.3 percent in 2017.

Bangladesh is now heading towards its next national election which is scheduled to take place in December this year. Prime Minister Sheikh Hasina has made it clear that the next general election would be held in line with constitutional provisions, meaning she would be holding office as the head of the government during the polls. She expressed her high optimism that all the parties registered with the Election Commission would join the race and uphold the country’s democratic process.

Prime Minister Sheikh Hasina has also said her party wants to see the next general election to be held in a free and fair manner to give democracy an institutional shape. The international community also wants to see free and fair elections everywhere including in Bangladesh. We expect a peaceful election though we have a history of political conflict during, after and ahead of election.

 “It’s a big challenge for Bangladesh how it will maintain political stability. Political stability is very important,” ADB’s Director General of South Asia Regional Department Hun Kim told UNB at the ADB headquarters in Manila.

With political stability, he said, bureaucrats become more accountable, motivating and empowered ones enabling the development trend to continue.

“From our experience, as we work on the ground, we can say if there’s a good man - project director - committed to a particular project, that project succeeds. But that person has to be empowered,” said the ADB senior official.

Talking to this correspondent on a sideline event of the 51st annual meeting of ADB, Kim said Bangladesh just needs to continue the growth trend. “I’m very optimistic about Bangladesh.”

Responding to a question, Kim who oversees ADB operations and support for regional cooperation in Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka, said, “We’ve a strong confidence in Bangladesh bureaucracy.”

“Bangladesh is doing very well. It can take fast decisions. With the increased capacity of bureaucracy, Bangladesh is willing to take bigger investments,” Kim said.

Bangladesh’s economy registered a record high growth rate of 7.3 percent in 2017 as higher farm and wage incomes lifted private consumption, according to the ADB Annual Report 2017.

The report says public investment has improved, although remittance inflows declined and exports have stagnated.

Bangladesh growth, according to the ADB, was mainly driven by service industries, although agriculture, small-scale manufacturing and construction also made contributions.

Responding to another question, the ADB official said South Asia politics is always a problem but good politics can make a difference.

Bangladesh lauded highly

ADB President Takehiko Nakao has highly appreciated Bangladesh’s impressive economic growth saying that the success stories of the country can be a very good example for other Asian countries.

“I hope this kind of example can be a very good example for other Asian countries as well,” he told UNB while responding to a question at a crowded press conference at the ADB headquarters.

Nakao said industries like readymade garment industry, commitment to better education and stable economy played the key role in having an impressive growth in Bangladesh in the past years.

“We’re supporting Bangladesh in many areas, including infrastructure, water and Dhaka city projects,” he said adding that there is a very good example of progress in infrastructure projects.

The ADB President said they are providing support for education sector to bring in more scientific and ICT-related education. “We’re also providing support [to ensure] better workplace through our technical assistance,” Nakao said.

He said their lending to Bangladesh is “very strong” and will continue that support.

The ADB President mentioned that many countries, including Bangladesh, were poor when the ADB was established.

This high economic growth has enabled Bangladesh to attain the middle-income status in July 2015 and helped cut poverty from about 49 percent in 2000 to 24 percent in 2016.

BD girls impress ADB chief

ADB President Takehiko Nakao has renewed his appreciation of Bangladesh’s socioeconomic progress and its growing interest in ICT sector saying that he is impressed by the enthusiasm of girls and boys to study ICT.

 “When I was in Bangladesh this February, I visited an ADB-supported ICT laboratory at a rural school. I was impressed by the enthusiasm of girls and boys to study ICT,” he said while delivering his speech at the opening session of the Board of Governors at the 51st ADB Annual Meeting.

One girl, Nakao said, stood up and said she wanted to be a satellite engineer for the National Aeronautics and Space Administration (NASA) in the United States.

“Prime Minister Sheikh Hasina of Bangladesh was proud when I shared this story with her,” said the ADB President sharing his good memories in Bangladesh.

Finance Minister AMA Muhith and Bangladesh Ambassador in the Philippines Asad Alam Siam were present at the crowded venue at that time when the ADB President cited Bangladesh example in a very positive way.

Bangladesh was the only country that came as example in ADB President’s speech. With the theme of “Linking People and Economies for Inclusive Growth,” this year’s Annual Meeting was attended by over 4,000 delegates from member governments, academics, business leaders, and civil society representatives.

Rohingya issue raised in ADB

Finance Minister AMA Muhith, who led Bangladesh delegation at the ADB annual meeting, came down heavily on Myanmar for pushing a million of Rohingyas into Bangladesh within less than a year putting stress on economy and sought punitive measures against Myanmar.

“This (pushing Rohingyas into Bangladesh) is something unaccountable,” he said urging the international community to help repatriate Rohingyas to their homeland from Bangladesh.

The Finance Minister said Bangladesh maintained above 7 percent growth over the last three years but he does not know what would happen next year as Bangladesh needs to provide a great deal of funds to Rohingyas. “And that is not productive investment at all.”

Minister Muhith said Myanmar did it before and in 1992 they pushed some 400000 into Bangladesh and Bangladesh has maintained these people all these years.

Bangladesh has sought financial support from the Asian Development Bank (ADB) in the form of grants, not as loans, to help address the Rohingya crisis which has huge burden on Bangladesh.

The World Bank is giving supports as grants abd the Finance Minister conveyed it to ADB President that ADB should provide the supports in the form of grants.

Minister Muhith said Bangladesh approached every donor during recent conference in Washington including the World Bank. The World Bank originally offered support both in the form of loans and grants but Prime Minister Sheikh Hasina was not happy about loans.

Terming global refugee crisis as a “very serious” one, Muhith said the international development bank should come forward to play some roles in this regard.

Bangladesh currently has a Rohingya population, which is far more than Bhutan’s entire population. Bhutan has around 800,000 people whereas Bangladesh had to give shelter to some 1.2 million Rohingyas.

Bangladesh and Myanmar signed the repatriation agreement on November 23, 2017. On January 16, Bangladesh and Myanmar signed a document on ‘Physical Arrangement’ which will facilitate the return of Rohingyas to their homeland from Bangladesh.

The ‘Physical Arrangement’ stipulates that the repatriation will be completed preferably within two years from the start of repatriation. The repatriation on the ground is yet to start.

On May 3, the ADB President said they are aware of very serious impact on Bangladesh economy due to Rohingya influx and also the humanitarian aspect of the refugee crisis. “We’re prepared to support them. We’re waiting for their (Bangladesh -Myanmar) requests.”

Commitment Charge Removal

Bangladesh has asked the ADB to remove “commitment charge” on loans, mainly on undisbursed amount. The Finance Minister said this demand is not only from him, this is also a demand made by others.

According to the operational manual of the ADB, commitment charge of 15 basis points per year is levied on undisbursed balances of all projects and policy-based loans, beginning 60 days after the applicable loan agreement is signed and accruing when the loan becomes effective. For project loans, borrowers may capitalise the commitment charge, it revealed.

In the governors meeting, the Finance Minister said Bangladesh wants to eliminate poverty not by 2030 but by 2024.

He laid emphasis on diversification of economy, upgrading infrastructure, accelerating industrial skills, improving productivity and strengthening institutions.

“These are all big challenges. To meet these challenges, we need support from all development partners. We need sustained growth. This momentum must be sustained,” Muhith said.

ADB’s Country Partnership Strategy for Bangladesh proposes total assistance of $8 billion, including for non-sovereign operations, during the period of 2016-2020, 60 percent up from $5 billion in 2011-2015.

In 2016-2017, the ADB approved $2.5 billion in sovereign and $600 million in non-sovereign assistance.

To support government efforts, the ADB will provide additional resources depending upon need, performance of ongoing projects, and readiness of new projects.

Bangladesh joined the ADB in 1973, and in 1982 became its first member to host a field office. To date, more than $20 billion in ADB loans, grants, and technical assistance has been approved for Bangladesh.

Although challenges remain, Asia and the Pacific is well positioned to sustain its growth momentum, supported by robust private consumption and investment, and anchored by sound macroeconomic policies and structural reforms. Active trade and foreign direct investment, the ADB President said, are the foundation of Asia’s economic success and are essential for continuing solid growth.

Despite the current disputes among some countries, the ADB firmly believe that countries should make utmost efforts to maintain and foster an open multilateral trade system.

  • DhakaCourier
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