Infrastructure investment suggested
Economists and lawmakers yesterday stressed the need to increase investment for infrastructure development to drive economic growth.
Addressing a workshop at the Westin Dhaka, they suggested private-sector investment in developing infrastructure and full implementation of the annual development programme (ADP).
Recognising the importance of public private partnership (PPP), the government allocated Tk 2,500 crore in the 2009-10 budget but failed to spend the amount due to absence of an institutional arrangement and a legal framework, they said.
“We have a huge infrastructure gap. We have to close the gap if we want to increase productivity and growth," said Ahsan H Mansur, executive director of Policy Research Institute (PRI) of Bangladesh.
He presented a keynote paper on a strategy for infrastructure investment.
"For this, we must increase investment in infrastructure," he said.
PRI and USAID Progati co-organised the workshop on a budget analysis for members of parliament.
“The growth potential is seriously constrained by low capacity in infrastructure, including in power, transport, port, water and sewerage,” said Mansur, referring to growing investments in China, India and Vietnam.
To attain 8-10 percent GDP growth to take Bangladesh to a middle-income nation requires higher investment in infrastructure, he said.
“Unfortunately, investment has stagnated in Bangladesh."
Mansur suggested that the government announce a detailed plan in the next budget to make the PPP formula a success. He also suggested the setting-up of a PPP cell.
Mansur said the private sector would not invest in infrastructure unless there was a partnership. He suggested an additional 7 percent increase in the ADP allocation with the current 4 percent to develop infrastructure.
Lawmaker Prof Ali Ashraf, who moderated the function, said inadequate infrastructure has slowed economic development. “Both the economic growth rate and investment have stalled,” he said.
Ashraf said there is no fund crunch in the country but good governance, rule of law, transparency and accountability.
“There is also a risk factor that discourages people from investment,” Ashraf.
Referring to a culture of changing policies with the change of government, Ashraf said economic policies should be carried forward into the future uninterrupted.
Hafiz Majumder MP emphasised mobilising funds into the PPP system.
Former finance secretary Siddiqur Rahman Choudhury said Bangladesh does not even have a world-standard highway. He, however, said the government alone cannot develop infrastructure.
Dhaka University Prof Bazlul Haque Khandker said the reasons behind the country's 5.5 percent GDP were the global economic crisis and poor infrastructure.
He suggested that the government spend a part of remittance and reserves on infrastructure development.