Strong, sustained economic growth not guaranteed

Bangladesh has been spectacularly successful during its first 50 years of its independence.

But economic problems are emerging and strong, sustained future economic growth is not guaranteed for the country, said Hans Timmer, the World Bank's chief economist for South Asia.

Lack of inclusion in the productive economy is a key structural impediment that makes current problems difficult to solve and makes future growth through diversification uncertain, he said.

Timmer made the comments at a seminar on "Bangladesh development story: Role of service and manufacturing sectors in driving diversification and inclusive growth", organised by the Bangladesh Institute of Development Studies (BIDS) at its conference room in Dhaka's Agargaon yesterday.

However, he added that crises create opportunities as they trigger the development of new technologies, allow creative destruction, and lead to new divisions of labour and economic paradigms.

Lack of inclusion in the productive economy is a key structural impediment that makes current problems difficult to solve and makes future growth through diversification uncertain

In short, crises can break through economic structures that are no longer evolving. Timmer then stressed the need for bold action in new directions to unlock underutilised potential.

He went on to say that persistent informality is a major development issue in Bangladesh as it can lead to several economic and social challenges. For example, one of the most significant challenges of persistent informality is the lack of government revenue.

When workers operate in the informal sector, they are not subject to income tax or other forms of revenue collection, meaning that the government misses out on potential revenue streams.

Timmer further said there is still a gender gap, preferential treatment of privileged groups and inequality of opportunity in the economic activities of Bangladesh. However, he said these problems also prevail in the entire South Asia region.

Professor MA Sattar Mandal, former member of the Planning Commission, said the agriculture sector is still informal even though it plays a huge role in the country's economic growth.

Around 7.5 million houses are directly involved with agriculture, which makes a significant contribution to the rural economy.

Mandal then said women in Bangladesh are engaged in various sectors other than domestic work, including agriculture, garments, healthcare and education.

Women make up a significant portion of the workforce in the agricultural sector, he added.

BIDS Director General Binayak Sen, who chaired the event, stressed the need for quality education, particularly at the tertiary level as it plays a crucial role in ensuring self-sufficiency and overall development of the economy. SM Zulfiqar Ali, senior research fellow of BIDS, also spoke.