Bangladesh needs to increase infrastructure investment to deal with the factors that hold back economic growth, analysts and businesspeople said yesterday.
“If businesses get proper roads, railways and ports, Bangladesh can raise GDP growth by 1 to 2 percentage points,” said Abul Kasem Khan, president of the Dhaka Chamber of Commerce and Industry (DCCI).
He spoke at a roundtable on “Road to 2030: Strategic priorities” organised jointly by the DCCI and the Economic Reporters' Forum (ERF) at the chamber's auditorium in the capital.
Speakers said the way the government is spending money would not work unless there is a focus on the efficient use of resources. Growth is also held back by insufficient investment in quality education and skills development, they said.
Bangladesh has increased infrastructure investment over the years. The amount reached $6 billion in 2016-17 from $2 billion in 2011-12. Yet, the amount of spending is very inadequate compared to the investment made by peer countries.
According to the DCCI, Bangladesh's infrastructure spending stands at only 2.85 percent of GDP, which is 10 percent in Vietnam, 9 percent in China and 5 percent in India, the Philippines and Sri Lanka.
Khan said if Bangladesh wants to attract foreign direct investment and remain competitive, it will have to raise investment in infrastructure.
“We are very competitive inside factories but when it comes to roads and ports, our advantage gets lost,” Khan said. “We must have an efficient transport sector.”
Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue, was critical of cost escalation in infrastructure projects.
“The gap in managerial quality relating to the execution of infrastructure projects is also a major problem,” he said.
The economist said Bangladesh is getting $4.5 billion in line of credit from India and there were business deals worth $9 billion between the two countries.
“Do we have the managerial quality to implement these projects?” he said, adding that governance is also vital for proper implementation of the infrastructure projects.
MA Mannan, state minister for finance and planning, said cost escalation in infrastructure projects often leads to waste of resources.
He said it seems to him that the waste of money is higher than the amount pocketed through corruption.
Moazzem Hossain, editor of the Financial Express, said Bangladesh has always been an underperformer compared to its potential. “It is time not to identify the problems only, but to tackle them as well.”
Asif Ibrahim, a former president of the DCCI, called for creating an investment-friendly environment in the country. “Often, the government happily accepts our recommendations, but there remains a serious gap when it comes to implementation.”
Paban Chowdhury, executive chairman of Bangladesh Economic Zone Authority, gave updates on the development of special economic zones.
He said works are going on in full swing for setting up 23 special economic zones. The Mongla economic zone is ready for setting up industrial units. Saif Islam Dilal and Ziaur Rahman, president and general secretary of the ERF respectively, also spoke.