Strengthen institutions for sustainable growth
Economic growth based only on mega projects will never be sustainable; rather, a conducive environment should be created for investment to flow in, economists said yesterday.
Moreover, the present growth momentum will not carry on if the institutions are not strengthened, they said.
If institutions remain weak despite continuous growth of the economy, then questions will be raised on whether the development will sustain or not, said eminent economist Wahiduddin Mahmud.
Institutional accountability is a must and they should also enjoy the right to take decisions independently for the sake of the economy’s sustainable growth.
The efficiency of the institutions will increase if accountability is ensured, he added.
Mahmud’s comments came at the launch of a book titled “Empowering economic growth for Bangladesh: Institutions, macro policies, and investment strategies”, authored by Biru Paksha Paul, former chief economist of the Bangladesh Bank.
University Press Limited organised the event at the office of Unnayan Shamannay in Dhaka.
At first, it would seem that the book is a criticism of the economy, but the author has mainly shed light on the optimistic side of Bangladesh, Mahmud said.
In his book, Paul showed how the market economy along with the spirit of liberalisation have energised Bangladesh.
The writer also showed how reforms and apt investment strategies can make the country’s development sustainable in the 21st century, he said.
Policies and institutions must be reformed to help the economy continue to growth, Paul said at the programme.
The central bank should be allowed to play its role properly and independently as well as introducing long-term and result-oriented policies.
Corrections should be brought on the fundamental areas to bring other institutions to the right path, he said.
Paul believes the Bangladesh Bureau of Statistics (BBS) is not allowed to work independently, because of which its data is not of international standard and does not match with the ones of different global organisations, like the World Bank and the International Monetary Fund.
Subsequently, he stressed the need for improving the quality of data of the state-owned statistics agency.
The finance ministry can at best give directions to the banking watchdog instead of monitoring its activities, as at the end of the day the central bank is an independent institution responsible for taking decisions on monetary issues, he said.
The single-digit bank interest rate that the government plans to introduce will not have any impact on the capital market as the stock investors are still suffering from confidence crisis, the author said.
However, Paul was optimistic about Bangladesh turning out to be a high-income country by 2041, if necessary reforms are brought to the institutions.
The government has started working on the areas where reforms are needed, said MA Mannan, planning minister. The minister also said the government has never intervened in the activities of BBS.
Sometimes low economic growth can also ensure sustainable growth if there is low inequality, said Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue. Overseas investment will not come if the institutions do not work properly, he said.
Shawkat Hossain Masum, special news editor of Prothom Alo, a Bangla daily, and Mahrukh Mohiuddin, managing director of UPL, also discussed different topics of the book.
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