Bangladesh’s capacity to implement large volumes of infrastructure projects will be the main stumbling block to realising the country’s growth ambitions, said a top official of the Asian Development Bank.
“Your capacity to implement mega projects or many projects is growing but that will be the main bottleneck. Money will never be a bottleneck,” said Hun Kim, ADB’s director general for South Asia operations, in a press briefing on the sidelines of the 52nd annual meeting of the ADB board of governors, which kicked off today.
The country’s implementation capacity is growing, he said, citing the Manila-based multilateral lender’s lending to Bangladesh last year as to further his point.
In 2018, the ADB lent $2.2 billion to Bangladesh, which was above its normal allocation of $1.5 billion.
“Bangladesh’s performance is really good. Not only is the economy growing fast, the implementation of the projects is also showing steady improvement,” he said, adding that given the multilateral lender’s solid financial base now it would be able to meet the country’s funding requirement.
What is holding the country back is its ability to spend the money faster, effectively and with a tangible end product.
“If an economy is growing at 7-8 percent the whole world will come and invest. So money will not be an issue. But then again, development is all about your capacity to handle this process,” Kim said.
But Lei Lei Song, regional economic advisor of ADB’s south Asia department, also called for banking sector reforms to make it more efficient and better capable of mobilising resources for economic development.
The country needs to grow at 8 percent for the next 20 years to meet its growth ambitions, according to Kim.
“Bangladesh is really becoming a success story of the region -- pulling itself ahead of the game. We have big expectations -- we are betting big on the future of Bangladesh.”
The country’s ability to expand its energy generation is also critical.
“In Bangladesh’s context, increasing the energy has become a real challenge.”
And that is where the ADB’s pet project for the region, the South Asia Subregional Economic Cooperation (SASEC), would be instrumental, Kim added.
The programme brings together Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal, and Sri Lanka in a project-based partnership that aims to promote regional prosperity, improve economic opportunities and build a better quality of life for the people of the sub-region.
SASEC seeks to assist member countries in improving energy security by developing infrastructure and promoting intraregional power trade to reduce costs and import dependence.
The Bangladesh-India electricity interconnection was one of the first projects of SASEC to this end, according to Ronald Antonio Q Butiong, ADB’s director of regional cooperation and operations coordination division of the South Asia department.
The ultimate goal is to come up with a regional power market in which countries with surplus energy can contribute.
“This has already started,” he said, adding that there will be a meeting in October in India to take matter forward.
SASEC also seeks to strengthen multimodal cross-border transport networks that boost intraregional trade and open up trade opportunities with East and Southeast Asia.
The programme will help build modern and effective customs administration that speeds up the time and reduces the costs of moving goods, vehicles and people across borders.
Better connectivity will help unleash the tremendous potential for mutually beneficial trade between the seven SASEC countries, which remain some of the least economically integrated in the world.
“I think South Asia is all about logistics. You need to move people and goods fast and at low-cost,” Kim added.
Meanwhile, finance ministers, central bank governors, government officials, private sector representatives, development partners, youth, as well as members of the academy, civil society, and media from Asia and the Pacific, as well as around the world, are convening in Nadi, Fiji for the event.
The theme for this year’s event, which is being held from May 1 to 5, is “Prosperity Through Unity”, and this is the first time that a Pacific developing member country is hosting the ADB’s largest annual gathering.
Among the issues that will be discussed at the annual meeting are sustainable tourism and its potential to boost national and regional development efforts, the role of private sector financing for disaster risk management and climate resilience, and the importance of actions to improve ocean health.
There will also be discussions on ways to respond to heightening global economic uncertainty, the role of digital technologies for financial inclusion and new tools for sustainable infrastructure development, among others.
Established in 1966, the ADB is owned by 68 members, 49 of which are from the region.