The Asian Development Bank is delegating more power to its Dhaka office to speed up implementation of development projects, as Bangladesh has the potential to grow at a faster rate, the president of the lender said yesterday.
“Encouraging things are happening in this country. Still, some people outside know Bangladesh as a very poor country prone to cyclones and floods,” Takehiko Nakao told a media briefing at ADB's Dhaka office yesterday.
Nakao came to Dhaka yesterday on a two-day visit and met Prime Minister Sheikh Hasina and Finance Minister AMA Muhith at their offices.
“It's (Bangladesh) really changing and the investment climate is improving. The economy is getting stronger with consistent and modest growth rates for years,” he said. Bangladesh's economy grew by 6.24 percent on average a year in the last decade.
He, however, stressed the need for more efforts to boost infrastructure, skills, and the business climate as the country targets a middle-income status.
Enhancing the quality of education, especially in secondary and vocational levels, and investment in infrastructure are two major areas where Bangladesh needs to work more, he said. Bangladesh spends only 3 percent of its gross domestic product on infrastructure development, significantly lower than China's 15 percent, he added.
Raising the tax-GDP ratio is another challenging task for Bangladesh, which he said is needed to mobilise more resources internally to address infrastructure constraints. The use of public-private partnerships is also an urgent need for Bangladesh, the ADB president said.
On delegating more authority to ADB's Dhaka office, Nakao said it has been decided for the sake of faster procedural works, procurement and implementation of projects.
The ADB president said Bangladesh has to act reciprocally by strengthening its project readiness, approval, procurement and implementation. “To us, those are not as speedy as it should be.”
He appreciated Bangladesh's strong private sector and stable security for years (in terms of terrorist attacks).
On why Bangladesh does not get much-needed foreign direct investment, the ADB president said the government can change the situation faster by deregulating many of its works.
“If the government is serious about improving the investment climate, that includes infrastructure, education and governance, Bangladesh will get easier access to FDI.”
Since 1973, the Manila-based lender has provided Bangladesh with $15 billion in loans, technical assistance and grants to develop the country's infrastructure, gas, power, education and urban services. Presently, the ADB lends Bangladesh $1 billion, in mostly concessional loans, a year.
Nakao said the ADB will continue to assist Bangladesh's efforts to address its infrastructure needs.
Nakao will visit Sirajganj today to see progress of some ADB-financed projects.