6pc growth insufficient to attain mid-income status: MCCI

Bangladesh cannot become a middle-income country by 2021 with its current 6 percent economic growth rate, a leading chamber said yesterday.

The key challenge for the government will be to attain 8 to 10 percent economic growth in the next 6-7 years to achieve 'Vision 2021', the Metropolitan Chamber of Commerce and Industry said in a statement.

“Investment must increase by 35-40 percent of GDP over the years from its current level of 28.7 percent,” said MCCI, which identified nine core challenges for the government along with specific recommendations and action plans to be taken in the short to medium term.

The newly elected executive committee of MCCI, led by its President Syed Nasim Manzur, met AMA Muhith, finance minister, yesterday and submitted the proposals.

MCCI made the recommendations as part of its attempt to bring to the government's attention to a set of priority policies to further improve the business and investment climate for the private sector.

“Despite the resilience and growth performance of the economy in many indicators in the recent past, Bangladesh still faces many ongoing challenges arising out of domestic and international environments, which impede the potential for faster per capita income growth being experienced by India, Sri Lanka and many other South-East Asian countries,” the chamber said.

Citing a confrontational political culture and lack of tolerance as barriers to democratic practices, it said political parties by any means must come to a consensus and stop violence, blockades and hartals, which severely affect businesses and employment.

“It is high time for the government (any party in power) to seriously consider undertaking political activities which will not hamper business. The business community will actively support formulating strict policy and its enforcement ensuring peace and stability to conduct business and trade.”

On infrastructural bottlenecks, MCCI said the roads, highways, bridges, railways and ports under physical infrastructure are so backward that it creates hurdles in achieving potential growth in all sectors.

“Drastic policy interventions with appropriate legal and institutional support must be enforced to promote an inflow of foreign direct and local investment for rapid development of physical infrastructure by adopting a build operate and transfer policy.”

MCCI said domestic savings and investment remain stagnant. “To boost private savings, real income of the consumers must be protected against increasing cost of living of a majority of the population by way of restricting excessive inflation.”

It also suggested enhancing the tax base, control inflation, reduce individual and corporate income tax, increase the export basket, create strong manufacturing industry base, reduce non-development expenditure and bank borrowing, and accelerate regional connectivity for faster economic growth.

The MCCI executive committee also met with the commerce minister and placed the suggestions to accelerate economic development.