Doubt over 7pc GDP growth

GM Quader, second from left, commerce minister, and Syed Ershad Ahmed, second from right, president of Foreign Investors' Chamber of Commerce and Industry, attend the monthly luncheon meeting of the chamber at The Westin Dhaka yesterday. Photo: FICCI

The Foreign Investor's Chamber yesterday doubted the government's possibility of achieving the targeted 7 percent GDP growth in current fiscal year under the existing economic scenario.
The chamber mentioned a number of bottlenecks the economy is facing now, including double-digit inflation, falling foreign direct investment, delay in releasing soft loans by donors and the nagging power crisis in industries.
"There is no hope that the 7 percent GDP growth will be achieved," said Syed Ershad Ahmed, president of Foreign Investors' Chamber of Commerce and Industry (Ficci), at the body's monthly luncheon at The Westin Dhaka Hotel.
According to Bangladesh Bureau of Statistics, the country's non-food inflation rose by 1.19 percentage points to 11.38 percent in December, compared to the previous month.
While food inflation fell by 2.07 percentage points to 10.40 percent in December from November.
The country attracted $913.32 million in foreign direct investment (FDI) in 2010, up by 30 percent in 2009, according to a recent World Investment Report of the United Nations.
According to Bangladesh Bank, the country attracted $377 million net FDI during July-November period in this fiscal year, up by 32.28 percent compared to the same period of last fiscal year.
But the FDI inflow has been stagnant at below $1 billion for a long time due largely to inadequate supply of gas and power and scarcity of land.
"We are concerned over the FDI inflow as it is much below the expectation," said Ahmed. He said FDI inflows will not increase unless the energy situation does not improve.
He said the government should modernise the laws related to intellectual property rights (IPR) to attract more FDI to the country. "There is a direct relationship between the increase of FDI and IPR protection."
Ahmed said the government should take initiatives for better governance, avoiding confrontational politics, removing corruption and maintaining better law and order situation to more FDIs.
He said the country's export largely depends on readymade garment. "Such dependency is very much risky. We have to diversify the export baskets to boost exports."
The chamber leader said the government should formulate a comprehensive trade policy in consultation with business community to address this problem.
The whole world is suffering from a recession due to the recent European debt crisis and stagnations in US economy, said Commerce Minister GM Quader.
On Bangladesh economy, he said: "The situation is not as bad as statistics show. We are hopeful that we should overcome the crisis as our people know how to survive in crisis."