Higher growth hinges on better infrastructure

Poor investment and infrastructure are the key barriers to turning Bangladesh into a middle-income nation by 2021, speakers said at a discussion yesterday.

The bottlenecks are setting back the most prospective sectors, including garment, leather, shipbuilding and IT, they added.

They spoke at a discussion on “Bangladesh 2030: next billion dollar opportunities”, organised by Dhaka Chamber of Commerce and Industry (DCCI) at Army Golf Club in Dhaka.

Commerce Minister Tofail Ahmed, however, said he is confident of achieving the growth targets set in the Vision 2021.

“We are confident that Bangladesh will achieve this growth due to its policy, dynamic private sector, strong economic foundation and fundamentals, strategic location and, moreover because of our resilient people,” he said.

Bangladesh's infrastructure is one of the most underdeveloped in the world, a factor which has stopped economic growth from accelerating further, Abul Kasem Khan, a former president of DCCI, said while presenting a paper on infrastructure.

The country's ranking in the World Economic Forum's Global Competitiveness Report slightly improved, but it is still the lowest compared to South Asian neighbours: India, Sri Lanka and Pakistan.

Taiwan, Hong Kong, China and Vietnam invested over 8 percent of their GDP for infrastructure development and have been able to build modern and essential infrastructure facilities, he said.

“We are confident that Bangladesh can achieve the high growth rate of 8 to 10 percent on average in the coming years, but the preconditions of such growth targets need be to addressed, which are mainly related to our infrastructure development.”

Shafiul Islam Mohiuddin, first vice-president of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), presented a paper on the prospects and challenges of the textile and clothing sector in Bangladesh.

He said it is possible to reach the target of exporting $52 billion by 2020, if Bangladesh can increase its share to 8 percent in the world export market of around $650 billion.

 “Embargo on new gas connection and transfer of address of existing gas connections are barriers to new investment and ongoing factory safety efforts,” said Mohiuddin, also the managing director of Onus Group.

The implementation of Dhaka-Chittagong four-lane highway, Dhaka-Mymensingh highway, Dhaka-Tangail highway and Dhaka-Chittagong dual gauge rail track, activating New Mooring Container Terminal, Mongla port and Pangaon port and improving the capacity of Chittagong port and its automation are the key issues to boost investment, he said.

In his welcome speech, DCCI President Hossain Khaled said the investment-to-GDP ratio needs to be 38 percent, instead of 28 percent now, to achieve the status of a middle-income country by 2021.

 “We are confident that Vision 2021 will set the foundation for Bangladesh to become a major economy in the globe.”

Bangladesh's economic performance is underestimated, and many feel that the economy may outperform expectations due to the sound economic foundation that has been achieved over the last 20 years, he said.

 “We believe that the high growth rate of 8 percent to 10 percent on average is achievable in the coming years,” Khaled said.

KM Mahmood ur Rahman, president of Bangladesh Ship Builders Association, presented a paper on “Bangladesh 2030: next million dollar opportunities sector: shipbuilding”.

He said the sector is facing some obstacles such as inadequate bank financing, high financial cost, inadequate power and energy, weak shipbuilding yard infrastructure and poor quality control, design and standardisation.

The global shipbuilding market is worth around $400 billion and with adequate investment Bangladesh can gain 10 percent share of it, he said.

Shamim Ahsan, president of Bangladesh Association of Software and Information Services, said his association targets earning $1 billion from IT export and creating one million IT professionals in the next five years.